Supreme Court rules AO cannot reopen settled tax assessment

The case involves a dispute between the Income Tax Department (Revenue) and Omaxe Limited regarding the disallowance of tax deductions under Section 80IB(10) of the Income Tax Act, 1961, after a settlement by the Income Tax Settlement Commission (ITSC). The core issue is whether the Assessing Officer (AO) can reopen an assessment settled by the ITSC.

Petitioner: Assistant Commissioner of Income Tax & Another (Revenue); Respondent: M/S. Omaxe Limited; Bench: S.V.N. Bhatti, J.

• The High Court quashed the Show Cause Notice dated 30.06.2010 and Reassessment Order dated 08.11.2011 under Sections 148 and 147 read with Section 143(3) of the Income Tax Act, 1961.
• The ITSC Settlement Order dated 17.03.2008 for AY 2006-07 was accepted by the ITSC, with an additional income surrender of Rs. 18,00,000/-.
• Section 245-I of the Act, 1961 mandates that every Order of settlement passed under Section 245D(4) is conclusive on the matters stated therein, barring the reopening of any matter covered by such an Order.
• The ITSC rejected the Revenue's application under Section 245D(6) to declare the settlement order void, finding no misrepresentation by the Assessee.
• The Court held that the AO lacks statutory jurisdiction under the Act, 1961, to issue a Reassessment Notice under Section 148 for the subject assessment year.

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