Reassessment order collapses if foundational Section 148A(d) order is quashed; SC dismisses Revenue's SLP

Reassessment order collapses if foundational Section 148A(d) order is quashed; SC dismisses Revenue’s SLP

Issue

Whether a final reassessment order passed by the Assessing Officer can survive legally when the foundational order under Section 148A(d) and the notice under Section 148 (which initiated the proceedings) have been quashed by the High Court.

Facts

Initiation: For Assessment Year 2016-17, the Assessing Officer (AO) passed an order under Section 148A(d) and issued a notice under Section 148 to reopen the assessment.
Writ Challenge: The assessee filed a writ petition before the High Court challenging the 148A(d) order and the 148 notice as being without jurisdiction.
Subsequent Development: After the writ petition was filed, the AO proceeded to pass the final reassessment order based on the impugned Section 148A(d) proceedings.
High Court Ruling: The High Court quashed the order under Section 148A(d). Consequently, it held that the reassessment order—which was entirely based on the 148 notice and the quashed 148A(d) order—could not survive independently and must also be quashed.
Revenue’s Appeal: The Revenue filed a Special Leave Petition (SLP) before the Supreme Court challenging the High Court’s decision, but with a delay.

Decision

Doctrine of Consequence: The Courts applied the legal principle that if the foundation (sublato fundamento) is removed, the superstructure (cadit opus) falls. Since the Section 148A(d) order (the foundation) was quashed, the subsequent reassessment order (the superstructure) automatically collapses.
SLP Dismissed: The Supreme Court noted that there was no good reason to condone the delay in filing the petition.
Merit: Even on merits, since the base order was quashed, the consequential order could not stand.
Ruling: The SLP was dismissed, and the decision went in favour of the assessee.

Key Takeaways

Foundational Validity: The validity of a Reassessment Order is inextricably linked to the validity of the preliminary proceedings under Section 148A. If the 148A(d) order is set aside, the final assessment cannot stand on its own.

Effect of Writ: If a High Court quashes a jurisdictional notice, all subsequent proceedings arising from that notice are rendered void ab initio.

SLP Delay: The Supreme Court continues to take a strict stance on condoning delays in Revenue appeals absent a compelling justification.

SUPREME COURT OF INDIA

Assistant Commissioner of Income-tax

Arunkumar Mahabirprasad Jatia

Manoj Misra and Ujjal Bhuyan, JJ.

SLP (CIVIL) DIARY NO(S). 49889 of 2025

OCTOBER 27, 2025

N. Venkataraman, A.S.G., Ms. Madhulika Upadhyay, AOR, V.C. Bharathi, Padmesh Mishra, Praneet Pranav and Ms. Dumni Soren, Advs. for the Petitioner.

ORDER

1. The Special Leave Petition is reported to be beyond time by 429 days. Further, it appears from the record that judgment which was relied upon by the High Court was also challenged before this Court in a highly belated special leave petition which too was dismissed on the ground of delay.

2. In such circumstances, we do not find a good reason to condone the delay and entertain the special leave petition.

3. The Special Leave Petition is accordingly dismissed on the ground of delay.

4. Pending application(s), if any, shall stand disposed of.

Madhur Agarwal and Rohan Deshpande for the Petitioner. Suresh Kumar for the Respondent.

ORDER

1. Mr. Agarwal states that the facts and issues in this petition will be covered by the judgment of this court in Karan Maheshwari v. Asstt. CIT (Bom)/2024 Scc Online Bom 853 Mr. Suresh Kumar agrees.

2. Therefore, petition allowed in terms of prayer clause (a), which reads as under:

“(a) issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India, quashing the impugned order u/s 147A(d) dated 24^th April 2023(Exhibit O) the impugned notice u/s 148 dated 24^th April 2023 (Exhibit P) and the impugned reassessment proceedings for AY-2016-17 as being wholly without jurisdiction, illegal and arbitrary.”

3. Mr. Suresh Kumar states that after the petition was filed, a reassessment order dated 31^st March 2024 has been passed based on the order under Section 148A(d) of the Income Tax Act 1961 (the Act) dated 24^th April 2023. Since we have quashed and set aside the order under Section 148A(d) of the Act dated 24^th March 2023, the reassessment order based on a notice issued under Section 148 relying on the quashed order also cannot survive. Therefore, reassessment order dated 31^st March 2024 is also quashed and set aside.

4. Petition disposed.