Same Bank Deposits Can’t Be Subjected To Reassessment Twice: Orissa HC

The Orissa High Court has quashed reassessment proceedings initiated by the Deputy Commissioner of Income Tax (DCIT) against a Cuttack-based partnership firm, holding that the same transaction cannot be subjected to reassessment twice under Section 147 of the Income Tax Act, 1961. The bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman has observed that once the assessment proceedings under Section 147 had been concluded and attained finality, a second reassessment on identical grounds would amount to impermissible review and double jeopardy in taxation. The petitioner firm, engaged in wholesale and retail trade of cattle feed and building materials since 1985-86, had been allotted two Permanent Account Numbers (PANs). While it consistently filed income tax returns under PAN-2 since Assessment Year 2003-04, PAN-1 was inadvertently reflected in certain banking transactions with Canara Bank. For Assessment Year 2019-20, the Income Tax Officer (ITO), Ward-1(1), Cuttack, had earlier initiated proceedings under Section 147 based on cash deposits of ₹4.42 crore made in Canara Bank accounts reflecting PAN-1. After examining the books of accounts, bank statements, audited financials, and documentary evidence, the ITO concluded in March 2023 that the deposits were duly accounted for in returns filed under PAN-2. The assessment was finalized at NIL income under PAN-1. However, in 2025, the DCIT, Circle-1(1), Cuttack, initiated fresh proceedings under Section 147 for the same deposits, treating them as escaped income on the ground that PAN-1 had been used in the banking transactions. The High Court noted that the earlier assessment proceedings under Section 147 had culminated in a final order after full verification. The DCIT sought to reopen the same issue involving the same transaction, same assessment year, and same amount of ₹4.42 crore. There was no material on record to show that the 2023 assessment order had been challenged, revised, or overturned by any higher forum. Invoking the legal maxim nemo debet bis vexari pro una et eadem causa (no person should be vexed twice for the same cause), the Court observed that permitting such reassessment would subject the assessee to repeated proceedings for an issue already adjudicated. The Court further emphasized that reopening a concluded assessment on the same material amounts to a mere change of opinion. The power under Section 147 cannot be exercised mechanically or to “protect the interest of revenue” when the matter has already been scrutinized and settled. Finality of quasi-judicial orders is essential for certainty and stability in tax administration. Rejecting the Revenue’s objection that the petitioner should have availed alternate statutory remedies, the Court held that existence of an alternative remedy is not an absolute bar where jurisdictional error and manifest injustice are evident. The Bench observed that relegating the assessee to another round of adjudication on identical facts would cause unnecessary prejudice and undermine judicial discipline. The High Court quashed the order dated June 24, 2025 passed under Section 148A(3), set aside the notice dated June 30, 2025 issued under Section 148 and annulled the consequential intimation dated July 25, 2025 issued under Section 144B. Case Details Case Title: M/s. Sanjay Kumar Bijay Kumar Adaspur Versus ACIT Citation: JURISHOUR-204-HC-2026(Ori) Case No.: W.P.(C) No.28067 of 2025 Date: 24.02.2026 Counsel For Appellant: Pranaya Kishore Harichandan Counsel For Respondent: Subash Chandra Mohanty, Senior Standing Counsel Click Here To Read Order Read More: Sales Tax Subsidy Received Under State Industrial Policy Constitutes Capital Receipt, Not Liable To Income Tax: Punjab and Haryana High Court

Same Bank Deposits Can’t Be Subjected To Reassessment Twice: Orissa HC

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