Section 148A Reassessment Quashed – Key Case Laws on Defective Procedure

Section 148A reassessment quashed by courts has become a consistent judicial trend where the mandatory procedure under section 148A of the Income-tax Act, 1961 is not properly followed. After the introduction of section 148A, reassessment proceedings are no longer automatic, and strict procedural safeguards have been built into the statute to protect taxpayers from arbitrary reopening.

Courts across the country have consistently held that non-compliance with section 148A vitiates the entire reassessment proceedings, rendering the notice without jurisdiction.

Below are important judgments where reassessment notices were quashed due to procedural lapses under section 148A.

Legal issue involved in Section 148A reassessment

The central question before courts has been:

Whether reassessment proceedings can survive when:

The procedure under section 148A is not properly followed, or
The assessee’s reply to the show cause notice under section 148A(b) is ignored, or
The order under section 148A(d) is mechanical or non-speaking

Courts have consistently answered these issues in favour of the taxpayer, holding that jurisdiction itself fails if the statutory procedure is violated.

Case Law 1

Union of India vs. Ashish Agarwal | Supreme Court | 2022

Facts:
Reassessment notices were issued under the old regime after 01.04.2021, without following the newly introduced section 148A procedure.

Held:
The Supreme Court held that reassessment proceedings must comply with section 148A. Notices issued without following the prescribed procedure cannot be sustained.

Why it matters:
This judgment laid down the foundational principle that section 148A is mandatory, not optional, and applies to all reassessment proceedings initiated after 01.04.2021.

Case Law 2

Mon Mohan Kohli vs. ACIT | Delhi High Court | 2021

Facts:
The Assessing Officer issued notice without conducting proper enquiry and without giving effective opportunity under section 148A(b).

Held:
The Delhi High Court quashed the reassessment, holding that failure to follow the procedure under section 148A strikes at the root of jurisdiction.

Why it matters:
The Court clarified that mere formal compliance with section 148A is insufficient. The procedure must be real, meaningful, and reasoned.

Case Law 3

Divya Capital One Pvt. Ltd. vs. ACIT | Delhi High Court | 2022

Facts:
The assessee’s detailed reply to the show cause notice was ignored, and a non-speaking order under section 148A(d) was passed.

Held:
The Court quashed the reassessment, holding that non-consideration of the assessee’s reply renders the proceedings invalid.

Why it matters:
An order under section 148A(d) must demonstrate application of mind. Mechanical orders are jurisdictionally defective.

Common principle emerging

From the above judgments, the following principles are well-settled:

Section 148A procedure is mandatory
Opportunity of hearing must be real and effective
Replies filed by the assessee must be considered
Orders under section 148A(d) must be reasoned
Jurisdiction fails if the procedure is violated

Where these safeguards are breached, section 148A reassessment is liable to be quashed.

How to use these judgments

These case laws can be relied upon:

While replying to a 148A(b) notice
In objections before the AO
Before CIT(A), ITAT, or High Court
To challenge reopening at the threshold stage

Conclusion

Section 148A reassessment quashed by courts underscores the importance of strict procedural compliance under the reassessment regime. The Assessing Officer cannot bypass statutory safeguards, and any reassessment initiated in violation of section 148A is liable to be struck down as without jurisdiction.

Taxpayers should carefully scrutinize reassessment notices and invoke these judicial principles wherever procedural lapses exist.

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