The Department had made disallowances for AY. 2012-13, 2013-14 and 2014-15. AO admits that the Assessment Order for AY. 2012-13, 2013-14 and 2014-15 on which reliance has been placed for issuance of notice under Section 148 of the Act is held to be unjustified by the Hon’ble Income Tax Appellate Tribunal.  The assessment was completed u/s. 143(1) of the Act on 16-8-2016. The reassessment notice was issued on 19-3-2021. Order rejecting the objection was passed on  7-1-2022.  According to AO since the department has not accepted the decision of the ITAT and has filed  an appeal against these appellate orders before the Bombay High Court  the issue of reassessment notice was valid. On writ  against the disposal of objections  allowing the petition the Court relied on the judgement of The Hon’ble Apex Court in UOI v. Kamlakshi Finance Corporation Ltd. [1992 Supp. (1) Supreme Court Cases 443 wherein the principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department – in itself an objectionable phrase – and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.  The court also stated that reliance on the assessment order of the previous years for re-opening itself is ill founded because these assessment orders have been set aside by the ITAT. Therefore, the Assessing Officer cannot rely on assessment orders which are, in fact, non existing because these orders have been held unjustified by the ITAT. (WP No. 974 of 2022 dt. 3-3-2022) (AY. 2015-16)

J.K .Trust v. ACIT (Bom)(HC) (UR )