2026 (3) TMI 1233 - AT - Income Tax

Parallel reassessment after section 153C proceedings is impermissible, and the section 69C addition challenge failed.

Where the Assessing Officer has already assumed jurisdiction under section 153C and proceeded for the relevant assessment years, later recourse to ... Assumption of jurisdiction u/s 153C baring reassessment u/s 147/148 - parallel assessment proceedings - reopening upheld if reasons to believe are founded solely on material seized in search when Section 153C jurisdiction was assumed Judicial effect of intervening higher court proceedings on reliance upon a High Court judgment - Validity of Revenue's challenge relying on the Delhi High Court judgment in Principal Commissioner of Income-tax v. Maharaji Education Trust [2024 (7) TMI 350 - DELHI HIGH COURT] - HELD THAT: - The Tribunal observed that the Revenue relied upon the High Court decision in Maharaji Education Trust but the Supreme Court [2025 (4) TMI 1139 - SUPREME COURT] had taken notice of that High Court order and directed the High Court to consider a review petition, leaving the finality of the High Court judgment unclear. In those circumstances the Revenue's ground premised on that High Court decision was held misconceived and dismissed. [Paras 8] The ground challenging the CIT(A)'s order based on the High Court judgment in Maharaji Education Trust was dismissed as misconceived. Assumption of jurisdiction u/s 153C baring reassessment u/s147/148 - Validity of reopening the assessment under Sections 147/148 where the Assessing Officer had assumed jurisdiction and proceeded under Section 153C - HELD THAT: - Applying the ratio in the referred Delhi High Court decision in Naveen Kumar Gupta [2024 (11) TMI 1071 - DELHI HIGH COURT], the Tribunal held that once the AO assumed and exercised jurisdiction u/s 153C based on material seized during search, the non obstante clause in Section 153C operates to preclude parallel reassessment under Section 147/148; recourse to Section 147/148 is impermissible in such circumstances. Consequently the AO's action in initiating reassessment under Section 147/148 was held to be bad in law and the CIT(A)'s finding to that effect was confirmed. As the reopening was held invalid, the Tribunal did not adjudicate the deletion on merits. [Paras 11] The assumption of jurisdiction under Sections 147/148 was held invalid where the AO had assumed jurisdiction under Section 153C; the CIT(A)'s order was confirmed and merits were left unadjudicated. Final Conclusion: The Revenue's appeal is dismissed. The Tribunal confirmed that initiation of reassessment under Sections 147/148 was impermissible after assumption of jurisdiction under Section 153C, upheld the CIT(A)'s finding of invalid reopening, and did not decide the addition on merits. Issues: (i) Whether the reassessment proceedings initiated under sections 147/148 of the Income-tax Act, 1961 are valid where the Assessing Officer had earlier assumed jurisdiction and proceeded under section 153C of the Income-tax Act, 1961; (ii) Whether the deletion of addition of Rs. 3.5 crore (made u/s 69C) by the Commissioner of Income Tax (Appeals) is unsustainable on the ground that the deletion contradicted the judgment of the jurisdictional High Court (Maharaji Education Trust) and related authorities.Issue (i): Whether the reassessment proceedings initiated under sections 147/148 of the Income-tax Act, 1961 are valid where the Assessing Officer had earlier assumed jurisdiction and proceeded under section 153C of the Income-tax Act, 1961.Analysis: The Tribunal examined the statutory scheme, the non obstante clause in section 153C and the ratio of the Delhi High Court in Navin Kumar Gupta. The Tribunal noted that once the Assessing Officer assumes jurisdiction under section 153C and proceeds to make assessment/reassessment for the relevant years, the Act does not contemplate parallel proceedings and recourse to section 147/148 thereafter is impermissible. The Tribunal applied paras 58-59 of the cited High Court decision and found that the Assessing Officer had exercised jurisdiction under section 153C earlier; consequently initiating proceedings under section 147/148 amounted to parallel proceedings.Conclusion: The initiation of reassessment under sections 147/148 after having assumed jurisdiction under section 153C is invalid and therefore the reassessment proceedings under sections 147/148 are held bad in law (in favour of assessee).Issue (ii): Whether the deletion of addition of Rs. 3.5 crore (u/s 69C) by the Commissioner of Income Tax (Appeals) is unsustainable because it allegedly ignored the jurisdictional High Court judgment (Maharaji Education Trust).Analysis: The Tribunal considered the departmental contention based on the High Court judgment and noted that the High Court order relied upon had been the subject-matter of proceedings before the Supreme Court where review/related proceedings were pending, so it was not clear whether the High Court judgment had attained finality. On that basis the Tribunal found the Revenue's reliance on that High Court judgment to be misconceived. Further, since the assumption of jurisdiction under sections 147/148 was held impermissible, the question of the merits of deletion of the addition became academic and was not adjudicated.Conclusion: The challenge to the deletion of the addition based on the cited High Court judgment is dismissed (in favour of assessee); the Tribunal confirmed the deletion on the ground that the Revenue's reliance was misconceived and the reassessment was invalid.Final Conclusion: The appeal filed by the Revenue is dismissed and the order of the Commissioner of Income Tax (Appeals) deleting the addition of Rs. 3.5 crore is upheld; the reassessment proceedings initiated under sections 147/148 are invalid in the facts of this case.Ratio Decidendi: Where the Assessing Officer has assumed jurisdiction under section 153C of the Income-tax Act, 1961 and proceeded to make assessment/reassessment for the relevant years, recourse to sections 147/148 thereafter is impermissible because the Act does not permit parallel assessment proceedings.