Delhi ITAT: Reassessment initiation by Assessing Officer invalid - as same issue was already decided by CIT(Appeals)

 In Noida Special Economic Zone Authority v. DCIT, the Hon’ble Delhi ITAT has laid down an important principle on the limits of reassessment powers. The Tribunal held that where an issue has been examined and relief has been granted by the Commissioner (Appeals), and such order is not challenged by the Revenue before the Tribunal, the matter attains finality. In such circumstances, the Revenue cannot seek to revisit the same issue by invoking reassessment under section 147 of the Act. If the Department is aggrieved by the appellate order, the only remedy provided under the Act is to file an appeal before the Tribunal.

In the present case, the assessee had claimed a deduction which was examined in appellate proceedings and allowed by the Commissioner (Appeals) after due consideration of the facts and applicable legal provisions. The Revenue did not pursue any further appeal before the Tribunal within the prescribed time, thereby allowing the relief granted by the CIT(A) to attain finality. Subsequently, the Principal Commissioner took a different view on the allowability of the deduction and issued a communication directing the Assessing Officer to initiate reassessment proceedings under section 147 of the Act.

Acting on this communication, the Assessing Officer issued notice under section 148 of the Act. On appeal, the ITAT set aside the reassessment proceedings, holding that once an issue has been adjudicated by the CIT(A), the assessment order merges with the appellate order and any disagreement must be addressed only through an appeal before the Tribunal. Reopening the assessment on the same issue was held to be beyond the scope of section 147 of the Act, and the Tribunal further clarified that reassessment jurisdiction must be exercised independently by the Assessing Officer and cannot be invoked merely to give effect to a supervisory view or instruction.

The ruling establishes an important procedural safeguard by affirming that reassessment is not an alternative to the statutory appellate process. Where the Revenue does not appeal a CIT(A) order and allows it to attain finality, the same issue cannot thereafter be reopened through reassessment proceedings. The decision reinforces the doctrine of merger and brings clarity on the finality and sanctity of concluded appellate outcomes