Duplicate reassessment for same year after fresh s.148 notice under Ashish Agarwal procedure-earlier s.147 order quashed as void

Where the AO issued a notice under the pre-amendment s.148 regime, completed reassessment, and thereafter adopted the SC-mandated Ashish Agarwal procedure by issuing a fresh notice and passing a second reassessment order for the same assessment year, the first reassessment order cannot survive. Applying the ratio that once the Department shifts to the new regime the earlier reassessment becomes invalid, infructuous and non est, the Tribunal held that two reassessment orders under s.147 for the same year are impermissible and the earlier order is void ab initio. The reassessment order dated 31.03.2022 was quashed and the appeal was allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether a reassessment order passed under section 144 read with section 147 on the basis of a notice issued under the "old" section 148 regime can legally survive when the Assessing Officer subsequently applies the procedure flowing from the Supreme Court's directions (treating the old notice as section 148A(b), issuing a fresh section 148 notice under the substituted regime) and passes a second reassessment order for the same assessment year.

(ii) Whether passing two independent reassessment orders under section 147 for the same assessment year is permissible, and if not, whether the earlier reassessment order becomes non est/void ab initio and liable to be quashed.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i)-(ii): Survival/validity of earlier reassessment order after subsequent reassessment under the post-Ashish Agarwal procedure; permissibility of two reassessment orders for same year

Legal framework (as discussed/applied by the Tribunal): The Tribunal proceeded on the admitted position that (a) an initial reassessment was completed on the basis of a notice issued under the old section 148 regime, and (b) thereafter, following the Supreme Court's directions in Ashish Agarwal, the earlier notice was treated as a section 148A(b) notice, a fresh section 148 notice was issued under the substituted regime, and a fresh reassessment order was passed for the same assessment year. The Tribunal also applied the ratio of a High Court decision holding that once the post-Ashish Agarwal course is adopted and fresh proceedings/order are made under the amended framework, the earlier reassessment order under the old-notice route does not survive.

Interpretation and reasoning: The Tribunal identified the determinative question as whether the first reassessment order (dated 31.03.2022) "survives in law" after a second reassessment order (dated 16.03.2023) is passed for the same assessment year pursuant to the Ashish Agarwal procedure. On the undisputed facts, the Tribunal found that the Assessing Officer effectively ran two reassessment tracks culminating in two separate reassessment orders under section 147 for the same year. The Tribunal held this to be impermissible. It accepted and applied the reasoning (treated as binding) that once the Revenue treats the earlier old-regime notice as a section 148A(b) notice and proceeds to issue a fresh section 148 notice and pass a fresh reassessment order, the earlier reassessment order made on the basis of the old notice becomes invalid, infructuous and non est and cannot continue to operate.

Conclusions: The Tribunal conclusively held that passing two different reassessment orders under section 147 for the same assessment year is not permissible in law, and that the first reassessment order dated 31.03.2022, having been passed on the basis of the old section 148 notice and having been followed by a fresh reassessment order after adopting the Ashish Agarwal procedure, is rendered invalid and void ab initio. The Tribunal therefore quashed the reassessment order dated 31.03.2022 and allowed the appeal.

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