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Facts
The assessee's assessment for A.Y. 2016-17 was initially completed under Section 143(3) r.w. Section 153A. Subsequently, the case was reopened under the 'old' Section 148, leading to an ex-parte reassessment order dated 31.03.2022. The Ld. CIT(A) set aside this order. Crucially, the AO later initiated fresh reassessment proceedings for the same year by treating the old Section 148 notice as a Section 148A(b) notice, following the Supreme Court's Ashish Agarwal judgment, and passed a second reassessment order on 16.03.2023.
Held
The Tribunal, relying on the Rajasthan High Court's precedent in Mittal Pigments Pvt. Ltd., ruled that the first reassessment order dated 31.03.2022, passed under the old Section 148 regime, became invalid, infructuous, and void ab initio once the Revenue adopted the Ashish Agarwal procedure and passed a subsequent fresh reassessment order for the same assessment year.
Key Issues
Whether an initial reassessment order passed under the old Section 148 regime remains valid when a subsequent reassessment for the same year is completed after following the Ashish Agarwal procedure, effectively superseding the first.
Sections Cited
147, 148, 143(1), 143(3), 153A, 144, 132, 148A, 148A(b), 148A(d), 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
(िनधा�रण वष�/Assessment Year: 2016-17) Shri Ronak Gupta Vs. Asstt. CIT Hyderabad Circle 3(1) PAN:AIAPG3319G Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Adv. Siddharth Toshnival राज� व �ारा/Revenue by:: Shri Ranjan Agarwala, Sr. DR सुनवाई की तारीख/Date of hearing: 17/11/2025 घोषणा की तारीख/Pronouncement: 21/11/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Shri Ronak Gupta (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”) dated 30.03.2025 for the A.Y 2016-17.
The assessee has raised the following grounds of appeal:
The brief facts of the case are that the assessee is an individual having income from business, capital gains and income
Page 2 of 7 from other sources. The assessee filed his return of income for the Assessment Year 2016–17 on 17.10.2016, declaring total income of Rs.39,89,130/-. The return of the assessee was processed under section 143(1) of the Income Tax Act, 1961 (“the Act”). Subsequently, a search action under section 132 of the Act was conducted in the case of the assessee on 02.05.2018, and therefore the case of the assessee was “centralized”. Assessment was thereafter framed by the Learned Assessing Officer (“Ld. AO”) on 24.04.2021 under section 143(3) read with section 153A of the Act determining total income of the assessee at Rs.39,89,130/-. Later, the case of the assessee was reopened and notice under section 148 of the Act (old regime) was issued to the assessee on 30.06.2021. In response to the said notice, the assessee did not file a return of income. Accordingly, reassessment was completed ex parte by the Ld. AO under section 144 read with section 147 of the Act vide order dated 31.03.2022, making an addition of Rs.29,90,130/- and determining total income of the assessee at Rs.69,79,260/- (hereinafter referred to as the impugned order).
Aggrieved with the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) set aside the matter to the file of the Ld. AO for fresh adjudication.
Aggrieved by the order of the Ld. CIT (A), the assessee is in further appeal before this Tribunal. At the outset, the Learned Authorized Representative (“Ld. AR”) has raised a solitary issue on pure legal ground challenging the validity of the impugned order. It was submitted that after passing of the impugned order, the Ld. AO once again initiated reassessment
Page 3 of 7 proceedings under section 147 of the Act, in accordance with the judgment of the Hon’ble Supreme Court in the case of UOI vs. Ashish Agarwal (444 ITR 1). The earlier notice under section 148 of the Act dated 30.06.2021 was treated as a notice under section 148A(b) of the Act and a fresh reassessment order under section 144 read with section 147 of the Act was passed on 16.03.2023 determining the total income of the assessee at Rs.81,94,924/- for the same assessment year. The Ld. AR argued that the Ld. AO cannot pass two independent reassessment orders for the same assessment year under section 147 of the Act. He further argued that once the Ld. AO adopted the Ashish Agarwal procedure and passed a second reassessment order on 16.03.2023, the earlier reassessment order dated 31.03.2022 becomes non est, invalid and void ab initio. In this regard, reliance was placed on the judgment of the Hon’ble Rajasthan High Court in the case of Mittal Pigments Pvt. Ltd. vs. CIT(A) & Ors. 468 ITR 342, wherein under identical circumstances, the Hon’ble High Court held that reassessment orders passed under the old regime (based on old 148 notices) prior to the Ashish Agarwal directions are invalid and infructuous. Accordingly, it was prayed that the impugned order dated 31.03.2022 be declared void and quashed.
Per contra, the Learned Departmental Representative (“Ld. DR”) supported the orders of the lower authorities.
We have carefully considered the rival submissions and perused the material available on record. The undisputed facts emerging from the record are that the notice under section 148 of the Act (old regime) was issued on 30.06.2021, an order
Page 4 of 7 under section 144 read with section 147 of the Act was passed on 31.03.2022 (“the impugned order”) and after the judgment of the Hon’ble Supreme Court in UOI vs. Ashish Agarwal (Supra), the Ld. AO treated the old 148 notice as a 148A notice, issued fresh 148 notice and again passed a fresh reassessment order on 16.03.2023 for the same assessment year 2016–17. The issue for our consideration is whether the first reassessment order dated 31.03.2022, passed on the basis of the old 148 notice, survives in law once a second reassessment order has been passed pursuant to the Ashish Agarwal procedure. In this regard, we have gone through para nos. 6 to 10 of the order of the Hon’ble Rajasthan High Court in the case of Mittal Pigments Pvt. Ltd. vs. CIT(A) & Ors. (Supra), which is to the following effect:
On a perusal of the above, we find that under an identical circumstances, the Hon’ble Rajasthan High Court has held that the earlier reassessment order passed under the old regime becomes invalid, infructuous and non est and once the Revenue adopts the new procedure and passes a fresh order, the Page 6 of 7 old reassessment order cannot survive. The relevant ratio decidendi squarely applies to the present appeal. In the present case also, the Ld. AO has passed two different reassessment orders under section 147 of the Act for the same assessment year, which is impermissible in law. The first order, passed on the basis of a notice issued under the old 148 regime, is rendered invalid and void ab initio in view of the subsequent adoption of the Ashish Agarwal procedure. Accordingly, we hold that the impugned order dated 31.03.2022 is invalid and liable to be quashed, following the binding precedent of the Hon’ble Rajasthan High Court.
In the result, the appeal of the assessee is allowed.