2026 (1) TMI 1128 - HC - Income Tax

Reopening of income tax assessment based on identical seized digital material barred, preventing duplicate reassessment and granting relief.

Reopening an income-tax assessment on the same material that is already the subject-matter of a contemporaneous proceeding derived from seized digital ... Reopening of assessment u/s 147 on the basis of same material as subject-matter of assessment u/s 153C - Unexplained cash deposits - additions were made by the AO u/s 153C relying on digital data seized by the search team (WhatsApp image) HELD THAT:- Reopening of assessment and the issuance of notice on the very same material which is the subject matter of consideration of the CIT (Appeals), it was not open for the Assessing Officer to reopen the assessment on the same material by alleging that the alleged cash deposit has been found from the search conducted under Section 132. Both the amounts and the alleged amount which has been referred in the notice for reopening u/s 148(1) of the Act emanate from the WhatsApp image of the person named Mr. Ashokbhai V. Patel. Thus, the petitioner cannot be allowed to suffer the rigors of reopening on the same material. WP allowed. Issues: Whether the Assessing Officer could reopen assessment under Section 148 of the Income-tax Act, 1961 on the basis of the same digital material which had earlier been the subject-matter of assessment under Section 153C and which had been considered and set aside by the Commissioner of Income Tax (Appeals).Analysis: The Court examined the sequence where additions were made by the AO under Section 153C relying on seized digital material (WhatsApp image) and those additions were set aside by the CIT(A) after noting defects in the material and the necessity of cross-examination and corroboration. The impugned show-cause and subsequent order under Section 148A(3) and notice under Section 148 relied on the very same seized digital material to allege further escapement. The Court treated the material relied upon by the AO and examined by the CIT(A) as the common factual basis. Given that the appellate authority had addressed those defects and deleted the addition, the Court considered whether reopening on identical material was permissible; the Court found that permitting reassessment on the same material that had been the subject of adjudication and appeal would improperly subject the assessee to repeated proceedings and would bypass the effect of the appellate conclusion.Conclusion: The writ petition is allowed. The impugned order dated 23.03.2023 and the notice dated 23.03.2025 under Section 148 are quashed and set aside, and the assessee is protected from reopening based on the same material which had been the subject-matter of the earlier assessment and appellate order.