Impact of CBDT instruction post Abhisar SC Judgement
Introduction:
- The Supreme Court has stated in the case of Abhisar Buildwell Pvt. Ltd. (Civil Appeal No.6580 of2021), that in case no material in unearthed during the search, the AO cannot assess or reassess taking into consideration other material in respect of completed assessments.
- The Supreme Court having said so, has stated that the power of the AO to initiate reassessment under section 147/148 are not affected by this and that is why, the word used is ‘saved’. Thus the AO in exercise of the power under section 147/148 can initiate the reassessment proceedings.
CBDT instruction:
CBDT has issued instruction 1/2023, to give effect to the above mentioned Supreme Court judgement. Summary of the same is as follows:
- Lead matters/tagged matters: In all the lead and tagged matters disposed by the Supreme Court, the AO shall reopen proceedings under section 147/148 in respect of matters in view of section 150 of the Act by issuing notices under section 148A by 30.09.2023 and shall complete such reassessment proceedings by 30.04.2024. It has been stated that present monetary limits shall apply for the purpose of reopening.
- Cases pending before Appellate authorities: The judgment of Abhisar Buildwell shall be brought to the notice of the appellate authorities and the AO shall reopen proceedings under section 147/148 in view of section 150 of the Act in cases pending before any appellate authority as and when the appellate authorities dispose of the appeals.
- Cases pending before AO: The AO shall initiate reassessment proceedings in cases pending already before it
- Cases disposed of by Appellate Authorities: In respect of judgments passed by the Appellate Authorities (including CIT(A), ITAT and High Court) pursuant to the judgment of Abhisar Buildwell wherein the Appellate Authorities have not given power to reopen the proceedings, the AO shall identify such cases by 30.09.2023 and file MA before the ITAT of notice of motion for review before the High Court by 30.11.2023.
- No action where matter has attained finality : In cases where decisions of appellate authorities have become final because these decisions have not been contested further in appeal, no action shall be taken under section 147/148 of the Act.
Is the instruction a back door channel to invoke Sec 150?
- Most of the matters that have been disposed of by the Hon’ble Supreme Court in the Abhisar Buildwell batch of petitions and various other matters that are pending at other forums (High Courts/ITAT) pertain to assessment years prior to AY 2017-18 and the period of limitation to reopen reassessment proceedings for the same has already expired under the section 149.
- So it seems that the observations made by the Hon’ble Supreme Court to the effect that the powers of Revenue under section 147/148 are saved is being inferred by the CBDT as a ‘finding’ or a ‘direction’ in order to invoke section 150 to reopen the proceedings in the extended period of limitation.
The copy of the order is as under:
