Breach of subsisting judicial stay in reassessment proceedings renders the assessment order unsustainable and liable to be quashed.

An assessment order under Section 147 read with Section 144 of the Income-tax Act was quashed because it was passed despite a subsisting judicial stay restraining further proceedings after the Section 148A(d) order. The revenue could not dispute that the restraint order remained in force when the assessment was made, so the impugned order could not be sustained. An assessment or reassessment made in breach of a continuing court stay is liable to be set aside.

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Issues: Whether the assessment order passed under Section 147 read with Section 144 of the Income-tax Act, 1961 for the relevant assessment year, despite an earlier stay order restraining further proceedings after the order under Section 148A(d), was liable to be quashed.

Analysis: The assessment order was challenged on the ground that it had been passed in violation of a specific order of stay granted by the Court. The revenue was unable to controvert that the impugned order had been made despite the subsisting restraint on further proceedings. In these circumstances, the passing of the assessment order could not be sustained.

Conclusion: The assessment order was quashed.

Ratio Decidendi: An assessment or reassessment order passed in breach of a subsisting judicial stay restraining further proceedings is liable to be quashed.

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