2025 (9) TMI 1590 - SCH - Income Tax

Reopening assessments under repealed rules invalid; TOLA cannot revive notices, section 148 notices after 31 March 2021 invalid as backdating

The SC disposed of the SLPs in terms of earlier orders, quashing and setting aside the impugned notices and orders. It held that reopening assessments on ... Reopening of assessment under old regime - scope of new regime - scope of TOLA - as argued notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute - Whether TOLA is applicable for AY 2015-2016 and whether any notice issued u/s 148 of the Act after 31st March 2021 will travel back to the original date? - HELD THAT:- Respective parties jointly submitted that this special leave petition may be disposed of in terms of NEHAL ASHIT SHAH [2025 (4) TMI 1095 - SC ORDER] the notices and orders impugned in these petitions are quashed and set aside. Validity of reopening of assessment under old regime - scope of new regime - scope of TOLA - as argued notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute - HELD THAT:- Special leave petition may be disposed of in terms of Order passed in Reliance Projects and Property Management Services Limited [2025 (4) TMI 1701 - SC ORDER] ISSUES PRESENTED AND CONSIDERED 1. Whether delay in filing Special Leave Petitions ought to be condoned where explanation is furnished and the Court exercises discretion to do so. 2. Whether a Special Leave Petition can be dismissed as not surviving for further consideration by following an earlier order in another Special Leave Petition that rested on a concession made by the State/Revenue. 3. Whether an earlier concession by the State/Revenue in a related matter (as recorded in a higher court order) is binding or permissible to be treated as determinative in subsequently filed Special Leave Petitions raising like issues. 4. Whether a Special Leave Petition may be dismissed on the dual grounds of inordinate/ unexplained delay and lack of merit, and the legal effect of such dismissal on pending applications. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Condonation of Delay: Legal framework Legal framework: The Court has discretionary jurisdiction to condone delay in filing Special Leave Petitions upon satisfaction with the explanation for delay and considerations of merit and prejudice. Precedent treatment: The Court in the present orders exercised discretion to condone delay in multiple diary entries; those exercises are in accordance with established practice of judicial discretion in condonation applications. Interpretation and reasoning: The Court recorded 'Delay condoned' where explanations were before it and where the Court chose to proceed by reference to precedent or dispose of the petition on merits; the condonation was procedural and permissive to enable adjudication or disposal by following earlier orders. Ratio vs. Obiter: Ratio - the condonation of delay is discretionary and may be granted to enable substantive disposal; Obiter - no general rule as to automatic condonation was laid down beyond exercise of discretion. Conclusion: Delay may be condoned where the Court, upon receiving explanation and considering the matter, chooses to do so to permit resolution on the basis of precedent or merits. Issue 2 - Disposal by Following Earlier Order Based on Concession Legal framework: A court may follow an earlier decision or order and dispose of a later petition consistently with that order where the earlier order's basis (including a recorded concession) applies to the later petition. Precedent treatment: The Court explicitly followed an earlier order that itself relied upon a recorded concession made by the law officers for the assessment year concerned. The present disposals track that prior order verbatim where appropriate. Interpretation and reasoning: The Court accepted joint submissions that the present petitions be disposed of in terms of the earlier order. The earlier order disposed of the petition because, in light of the Department's concession in a related matter, the Special Leave Petition 'would not survive for further consideration.' The Court replicated that reasoning and dismissed the petitions accordingly. Ratio vs. Obiter: Ratio - where an earlier order based on a governmental concession removes the foundation for challenge, a later substantially similar petition may be dismissed by following that order; Obiter - the Court did not articulate a standalone doctrine on the binding nature of concessions beyond applying them factually. Conclusion: The Court may dispose of later petitions by following an earlier order grounded in a government concession when the concession is materially applicable to the later petition's subject matter. Issue 3 - Effect and Treatment of State/Revenue Concessions in Subsequent Petitions Legal framework: Concessions by the State/Revenue or its law officers, when recorded in court proceedings, are relevant and can be decisive; the Court may treat such concessions as determinative for the assessment year or subject to which the concession was made. Precedent treatment: Reference was made to a prior decision where the Additional Solicitor General made a concession relating to a particular assessment year; the Court treated that concession as operative for disposing of later petitions on the same issue. Interpretation and reasoning: The Court relied on the concession as removing the justiciable controversy in the later petitions for the assessment year in question. The Court's acceptance of the concession as a basis for dismissal reflects the principle that the State's recorded concessions in higher court proceedings have decisive effect, subject to the Court's scrutiny. Ratio vs. Obiter: Ratio - a recorded concession by the State/Revenue in related litigation may render subsequent challenges non-justiciable and justify dismissal; Obiter - the Court did not rule on limits to the scope of such concessions beyond the factual confines recited. Conclusion: Concessions by the State/Revenue recorded in earlier proceedings can justify dismissal of subsequent petitions raising similar issues for the same assessment year or factual matrix. Issue 4 - Dismissal on Grounds of Delay and Merits; Disposal of Pending Applications Legal framework: A Special Leave Petition may be dismissed on procedural grounds (inordinate/unexplained delay) and/or on merits; dismissal generally disposes of connected or pending interim applications unless otherwise ordered. Precedent treatment: The Court reproduced an earlier order dismissing a petition both for delay (161 days not satisfactorily explained) and on merits; the present petitions were disposed of in consonance with that ruling. Interpretation and reasoning: Where delay is not satisfactorily explained and the petition lacks merit, the Court is entitled to dismiss the petition. The dismissals in the present orders were adopted where appropriate either by following orders grounded in concessions or where the Court independently found lack of merit and inordinate delay. Ratio vs. Obiter: Ratio - dismissal may validly rest on both delay and merits; Obiter - specific thresholds or formulae for what constitutes satisfactory explanation were not laid down here. Conclusion: The Court will dismiss Special Leave Petitions on combined grounds of unjustified delay and lack of merit, and such dismissal ordinarily renders pending applications disposed of. Cross-References and Interaction of Issues The Court's practice of condoning delay (Issue 1) is exercised subject to substantive consequences - where an earlier concession removes the controversy (Issue 2-3) the petition may be dismissed despite condonation; where delay is unexplained and merits are lacking (Issue 4), dismissal follows on independent grounds. The decisions followed and applied were treated as binding for the immediate factual matrix, and pending applications attendant to dismissed Special Leave Petitions were directed to stand disposed of.