This instruction was issued to standardize the implementation process of the Supreme Court’s decision, especially in cases involving completed or unabated assessments under sections 153A and 153C of the Income Tax Act, 1961. The earlier article, dated 1st May 2023, had already pointed out that while the judgment seeks to clarify legal principles, its practical implementation could be problematic without reliance on Section 150 of the Act. This article aims to provide a detailed examination of the CBDT’s instructions by interpreting their text and assessing their potential impact and feasibility.
Legal Context and Background of the Abhisar Buildwell Case
The Abhisar Buildwell judgment centered around the interpretation of the powers of the Assessing Officer (AO) in conducting reassessment proceedings under sections 153A and 153C in cases where no incriminating material was found during a search. The Supreme Court in this case concluded that in respect of completed or unabated assessments, the AO cannot make additions based on materials that were not found during the search. The principle laid down limited the reassessment power to only such information that was unearthed during the search or requisition proceedings. This view overruled earlier judicial pronouncements that allowed additions based on other information. The ruling also emphasized that an assessment under section 153A for a year not abated by the search cannot be arbitrarily reopened unless supported by incriminating evidence discovered in the course of the search. This clarification narrowed the scope of the AO’s powers under such reassessment proceedings and has substantial implications for ongoing and concluded cases.
The Role of Section 150 in the Implementation Process
Section 150 of the Income Tax Act provides a carve-out to the time limits for issuing reassessment notices in consequence of or to give effect to findings or directions contained in an appellate, revisionary, or Supreme Court order. The Supreme Court’s decision in Abhisar Buildwell creates such a finding, which may necessitate the reopening of assessments under this specific provision. The earlier article had rightly observed that the only viable legislative route for implementing the Abhisar Buildwell ruling in concluded cases would be through Section 150, which overrides the general bar on reopening after a time limit. CBDT’s Instruction No. 1 of 2023 formally adopts this interpretation by requiring reopening under Section 147/148 read with Section 150, specifically in the lead and tagged cases mentioned in the judgment. The instruction also specifies that the reopening should be carried out using the procedure under section 148A as amended by the Finance Act, 2021, and reaffirmed by the Supreme Court in the Ashish Agarwal case.
Highlights of Para 6 of the CBDT Instruction and Its Implications
Para 6 of the CBDT Instruction delineates the categories of cases where the Abhisar Buildwell judgment must be applied and where no further action is necessary. The instruction acknowledges the significant time lapse since the finalization of assessments based on ‘other material’ and hence decides that no further action shall be initiated under sections 147/148 for cases where appellate decisions have become final and are no longer under challenge. The instruction draws a clear demarcation that the Abhisar judgment will apply only to the following categories of cases. First, the lead and tagged cases covered in the Supreme Court judgment are to be reopened using the procedural norms prescribed post-Finance Act 2021. Second, all pending cases either before the Assessing Officer or at any appellate forum are to be dealt with in line with the Supreme Court’s decision. Third, any case in which a contrary decision has been rendered post-judgment must be corrected by applying the correct ratio laid down in the Abhisar Buildwell case. This approach ensures tax certainty and administrative feasibility, avoiding a blanket reopening of thousands of completed cases. This selective implementation framework reflects a balance between judicial directives and administrative constraints. It avoids widespread chaos in reopening settled assessments while still giving effect to the Supreme Court’s findings in appropriate pending or live matters.
Para 7.2.1 and Reopening of Lead and Tagged Cases
Para 7.2.1 of the instruction outlines a very specific procedure for the reopening of lead and tagged cases. These are the cases directly addressed by the Supreme Court, or those whose facts and issues are identical or similar. In such cases, the Assessing Officer is required to take recourse to reopening under section 147/148 read with section 150, under the findings in para 14(iv) of the Abhisar Buildwell judgment. Additionally, the reopening must adhere to the procedure now required by section 148A as introduced by the Finance Act, 2021. The procedural steps laid down in Ashish Agarwal’s case must be followed. That judgment emphasized due process and pre-notice inquiry, ensuring a fair opportunity is provided to the assessee. Further, section 153(6) provides that assessments reopened under section 147/148, under this instruction, must be completed by 30th April 2024. This deadline imposes an important time-bound requirement for the reopening and completion of assessments under this context. It appears that the CBDT, by providing a definite outer limit, seeks to prevent indefinite reopening proceedings thatcould have otherwise resulted from the Supreme Court’s broad observations.
Practical Observations on Reopening Requirements
While the instruction provides clarity, it also imposes an operational burden on the tax authorities. Identifying and segregating lead and tagged cases or determining the similarity of issues with the Abhisar Buildwell ruling will require thorough scrutiny of individual case records. The Assessing Officer must also ensure that the reasons for reopening are aligned with the findings of the Supreme Court, and not based on independent or pre-existing material not discovered during the search. The implementation of procedural safeguards under section 148A, such as issuance of a show-cause notice, consideration of the assessee’s reply, and passing of a speaking order, must be adhered to strictly. Failure to comply with these steps may render the reopening proceedings invalid. In this context, the reopening of cases under the instruction must be done with heightened sensitivity to procedural legality and fairness, or else they will be vulnerable to further judicial scrutiny and possible quashing.
Interim Conclusion and Forward Outlook
The first part of this analysis makes it clear that the CBDT’s approach is to implement the Supreme Court’s decision in Abhisar Buildwell in a manner that preserves the spirit of the ruling while minimizing disruption to settled assessments. The reliance on section 150 is a pragmatic route, and the requirement to follow section 148A safeguards the assessee’s right to due process. However, the effective identification of applicable cases and strict adherence to time-bound reopening and reassessment processes will be the key to the success of this instruction. The next parts of this article will explore paras 7.2.2 and 7.2.3 of the CBDT instruction, the appellate level implications, and strategies suggested for dealing with post-judgment inconsistent decisions from appellate forums. These developments will further shape the narrative around how reassessment proceedings are to be conducted in the post-Abhisar Buildwell regime.
Examination of Para 7.2.2 and Appellate-Level Proceedings
Para 7.2.2 of Instruction No. 1 of 2023 deals with cases where assessments had been completed, and appeals were pending at various appellate levels at the time of issuance of the instruction. The CBDT has delineated clear responsibilities for departmental officers and legal representatives at each level to ensure the correct application of the Supreme Court’s ruling in Abhisar Buildwell. This instruction mandates proactive measures by the tax department to inform adjudicating authorities about the ruling so that decisions made in pending appeals are consistent with the legal principles settled by the Supreme Court.
At the level of the Commissioner of Income Tax (Appeals), the instruction requires that the judgment in Abhisar Buildwell must be brought to the attention of the Commissioner. This applies regardless of whether the appeal is filed by the department, the assessee, or both. The objective is to ensure that the appellate authority is made aware of the legal position clarified by the Supreme Court and applies the same in the disposal of the appeal.
In cases pending before the Income Tax Appellate Tribunal, the Departmental Representative has to ensure that the Abhisar Buildwell judgment is brought to the notice of the Tribunal. This is a critical responsibility, as the ITAT is often the final fact-finding authority, and decisions made by it can significantly impact the application of law to various factual matrices. The Departmental Representative must be vigilant in identifying cases that fall within the purview of the judgment and must also ensure that appropriate arguments are made to support the application of the Supreme Court’s ruling.
For appeals pending before the High Courts, the Standing Counsel representing the department is tasked with informing the court about the Supreme Court’s decision. Since the High Court rulings carry significant weight and can impact a broader set of cases, ensuring that the court is informed of binding precedent is both a legal and ethical responsibility. The CBDT’s instruction makes it clear that wherever the appeals are disposed of, and if the appellate authorities take a view inconsistent with the Supreme Court’s ruling, appropriate action may be taken by the Assessing Officer, which includes reopening under sections 147 and 148, read with section 150 of the Act.
Procedural Follow-Up after Appellate Disposal
Once the appeal is disposed of by any of the appellate authorities—CIT(A), ITAT, or High Court—the Assessing Officer must examine the decision and assess whether further action under sections 147 and 148 is necessary, given the Abhisar Buildwell judgment. If the appellate decision is consistent with the Supreme Court’s view, no further action may be required. However, if the decision contradicts the ratio laid down by the Supreme Court, then the Assessing Officer must consider initiating reassessment proceedings under the law, while following the procedure under section 148A and observing the outer time limits under section 153(6).
The instruction reiterates that all procedural steps mentioned in para 7.2.1—especially the adoption of the process laid out in Ashish Agarwal’s case—must be followed while reopening such assessments. This includes pre-notice inquiry, issuance of a show-cause notice, disposal of objections, and passing of a speaking order. This mechanism is crucial for maintaining procedural fairness and ensuring that assessees have an adequate opportunity to be heard.
The instruction’s guidance on post-appellate action illustrates the comprehensive approach adopted by the CBDT in dealing with various stages of litigation. It reflects an attempt to bring about uniformity in the application of the Supreme Court’s judgment and minimize interpretational ambiguities across different tiers of adjudication.
Challenges in Implementation Across Appellate Forums
Despite the clarity of the instruction, its implementation across appellate forums presents practical challenges. The first challenge is the identification of cases where the Abhisar Buildwell ruling applies. The appellate forums are inundated with thousands of pending appeals, and ensuring that each relevant file is tagged correctly and presented with the right legal position requires meticulous work by departmental officers and legal representatives.
Another challenge is the possibility of inconsistent decisions being passed by the appellate forums despite being informed about the Abhisar Buildwell ruling. Appellate authorities may take the view that the facts of a given case are distinguishable or that the ruling does not squarely apply. In such scenarios, the Assessing Officer is placed in a position of having to initiate reassessment proceedings, while also being mindful of procedural limitations and statutory deadlines.
Moreover, at the High Court level, issues of jurisdiction, differing interpretations of Supreme Court rulings, and potential delays in listing and disposal of cases could also act as hurdles to the uniform application of the judgment. The tax department must remain agile and responsive to developments in each case, and where required, must escalate the matter to the appropriate forums to obtain clarity or review inconsistent decisions.
Instruction’s Emphasis on Section 150 in Appellate Context
Section 150 plays a pivotal role in the appellate-level implementation of the Abhisar Buildwell judgment. The CBDT instruction assumes that reassessment of completed assessments in such appellate situations can still be initiated, provided it is to give effect to the Supreme Court’s findings. In this context, section 150(1) provides that a notice for reassessment may be issued at any time if it is necessary to give effect to any finding or direction contained in an appellate order or the Supreme Court’s judgment.
However, the instruction does not explicitly address the limitation placed under section 150(2), which bars reassessment in cases where the order giving rise to the appellate or court decision was itself time-barred. This creates a potential legal complexity. In situations where the original assessment was already barred by limitation, the question arises whether section 150 can still be invoked. Courts have taken differing views on the interplay between sections 150(1) and 150(2), and until the matter is settled conclusively, Assessing Officers must proceed with caution and ensure that legal vetting is conducted before issuing any notice based on appellate orders.
The Department’s Responsibility in Ensuring Uniform Application
The instruction requires the department to take a proactive role in disseminating the judgment to relevant forums and ensuring its application across the board. This responsibility lies not only with field-level officers but also with legal representatives and supervisory authorities. The instruction expects a high degree of coordination among the Assessing Officer, Departmental Representative, Standing Counsel, and appellate officers. Their collective efforts are expected to ensure that the binding precedent of the Supreme Court is implemented consistently and fairly.
In practice, this involves rigorous case identification, preparation of appropriate legal submissions, and timely communication to appellate forums. It also involves post-decision monitoring to determine whether the ruling has been followed and whether any inconsistencies require remedial action. If appellate authorities pass decisions inconsistent with the Abhisar Buildwell ruling despite being informed, then filing of review petitions, miscellaneous applications, or notices of motion becomes imperative.
Timing and Strategic Considerations
The instruction does not provide an indefinite time frame for action. Rather, it expects that all steps be taken within the statutory time limits provided under the Income Tax Act. The urgency is particularly pronounced in the context of reopening under section 147/148, where the outer limit for completing such reassessments is 30th April 2024, as per section 153(6). Delays in initiating action after appellate disposal could result in missed opportunities to implement the Supreme Court’s ruling, or even worse, time-barred reassessments.
This makes it essential for the department to maintain a structured tracking system for cases pending at different levels and to implement a workflow that ensures deadlines are met. Legal divisions within the department must be activated to promptly file applications for review or modification of inconsistent decisions ensure follow-up with the respective appellate forums.
Review of Para 7.2.3: Addressing Post-Judgment Inconsistent Decisions
Para 7.2.3 of CBDT Instruction No. 1 of 2023 addresses the situation where decisions by appellate authorities have been rendered after the Supreme Court’s judgment in the Abhisar Buildwell case, but are inconsistent with the legal principles settled by the apex court. This provision is crucial for ensuring that the final interpretation of law as laid down by the Supreme Court is uniformly respected across all forums and reflected in subsequent decisions.
The instruction acknowledges that, despite the existence of binding precedent, certain decisions may have been passed without adequately considering or applying the ratio of the Abhisar Buildwell judgment. Such inconsistencies may arise due to oversight, procedural lapses, or misinterpretation of the facts and legal context. To remedy these anomalies, the instruction provides specific directions to initiate remedial measures through judicial review mechanisms available under the Income Tax Act and general principles of procedural law.
The prescribed remedy involves filing a Miscellaneous Application before the Income Tax Appellate Tribunal or a Notice of Motion before the High Court, depending on the forum that issued the inconsistent decision. These applications must request a review of the earlier decision, explicitly referring to the binding nature of the Supreme Court’s ruling, and seek correction of the inconsistency. Such an approach ensures that the legal position is harmonized and prevents the creation of contradictory precedents that may hinder effective tax administration and fairness in adjudication.
Filing of Miscellaneous Applications Before ITAT
The instruction specifically notes that where an inconsistent decision has been rendered by the ITAT after the Supreme Court’s ruling in the Abhisar Buildwell case dated 24 April 2023, a Miscellaneous Application may be filed. Section 254 of the Income Tax Act allows for such an application to be filed for rectification of any mistake apparent from the record. The instruction reminds that the time limit for filing such an application is six months from the end of the month in which the ITAT passes its order.
This means that the tax department must track each ITAT decision rendered post-judgment and assess whether it aligns with the Abhisar Buildwell decision. If any inconsistency is noticed, an application must be filed promptly, and a delay in doing so can compromise the legal remedy available under section 254. Additionally, if the six-month limit has expired, the instruction permits that an application for condonation of delay be submitted along with the main application. The prayer must explicitly state the reason for the delay and argue that it is in the interest of justice to review the decision in light of the Supreme Court’s binding interpretation of law.
The instruction also provides a suggestive template for the Miscellaneous Application, which includes a standard legal format referencing the facts of the case, the judgment relied upon, the deviation in the ITAT’s decision, and the request for correction. While the use of the template is optional, it ensures uniformity and completeness in the representation made by various field offices to the Tribunal.
Notice of Motion Before High Courts
For cases where the inconsistent decision has been rendered by a High Court after the Supreme Court judgment in Abhisar Buildwell, the instruction directs the filing of a Notice of Motion. This legal remedy serves as an application for review under the rules of civil procedure or writ jurisdiction, depending on the nature of the case. The application must highlight that the earlier decision failed to consider or incorrectly applied the law as declared by the Supreme Court.
Since High Court judgments carry precedential authority within their territorial jurisdiction, any deviation from the Supreme Court’s binding interpretation could have a cascading effect on other cases. Hence, timely intervention and correction of such decisions are critical. Filing a Notice of Motion before the High Court is a formal process and may involve extensive legal drafting, affidavits, and argumentation. It also necessitates the inclusion of a prayer for condonation of delay wherever applicable, especially in cases where the statutory period for seeking review has already elapsed.
The instruction provides a sample format for the Notice of Motion, which includes key elements such as citation of the Supreme Court’s judgment, explanation of the inconsistency, factual summary of the case, and the relief sought. While the format is indicative, it helps ensure that the legal grounds are properly structured and that the department’s case is presented comprehensively and convincingly.
Importance of Timely Action and Monitoring
One of the key operational aspects emphasized in Para 7.2.3 is the importance of acting within time-bound legal limits. The instruction warns that the six-month window for filing a Miscellaneous Application before the ITAT must be strictly adhered to. Delays may lead to dismissal of the application on technical grounds, even if the legal position is sound. Therefore, timely identification of cases, preparation of review applications, and filing before the appropriate forum are critical.
The instruction also implicitly highlights the need for a monitoring mechanism within the department. Field officers, legal units, and regional tax administration must work in close coordination to track all appellate decisions passed after 24 April 2023, compare them with the Abhisar Buildwell ruling, and assess whether any corrective action is necessary. An internal alert system or review committee may be instituted to evaluate the decisions and recommend appropriate action, ensuring that no case is left unattended due to administrative oversight or lack of coordination.
Legal Basis for Filing Review Applications
The filing of Miscellaneous Applications and Notices of Motion is not merely an administrative requirement but is grounded in legal principles. The Supreme Court’s decisions are binding on all authorities under Article 141 of the Constitution of India. Therefore, any deviation from such a decision by a lower forum is a legal error that can and must be corrected. The Income Tax Act, particularly section 254, provides statutory authority for rectifying such mistakes in the orders of the ITAT. Similarly, High Courts possess inherent powers under civil and constitutional law to review and revise their judgments when they are found to be inconsistent with binding precedents.
In this context, the instruction not only empowers but also obliges the tax department to seek redress through the available legal channels. It also creates a structured pathway for doing so, ensuring that the effort is organized, legally sound, and procedurally compliant. These steps reinforce the integrity of the judicial process and help uphold the principle that all authorities must act under the law declared by the Supreme Court.
Implications for Taxpayers and the Legal Community
The provision in Para 7.2.3 also has significant implications for taxpayers and the broader legal community. It underscores the importance of staying updated with judicial developments and being prepared for changes in the status of completed appeals. Taxpayers who have received favorable appellate decisions after the Abhisar Buildwell judgment must recognize the possibility of those decisions being reviewed or revised. This may create uncertainty or necessitate further litigation.
Tax practitioners and legal representatives must also advise their clients appropriately and be ready to respond to review applications filed by the department. They may have to prepare supplementary arguments, attend additional hearings, and address the legal and factual nuances of the Supreme Court’s interpretation. In some cases, the taxpayer may argue that the Abhisar Buildwell decision does not apply due to factual distinctions, and such contentions would need to be adjudicated by the respective forum.
The legal community as a whole must take note of the evolving jurisprudence and align its practice with the final view declared by the Supreme Court. Any effort to maintain or defend decisions inconsistent with settled law will not only be futile but may also undermine the consistency and predictability of tax law.
Expected Outcomes and Broader Impact
If implemented efficiently, the steps directed in Para 7.2.3 will help establish legal uniformity and reinforce the binding nature of Supreme Court decisions across the tax ecosystem. They will also ensure that mistakes or oversights by appellate authorities are corrected through appropriate legal channels, without undermining the integrity of the judicial process. Over time, this will contribute to better compliance, reduced litigation, and greater confidence in the system.
However, the process is not without challenges. The success of this initiative depends on the department’s administrative efficiency, legal preparedness, and coordination across different units. It also depends on the willingness of the appellate forums to accept and act upon the review applications in the interest of justice. Moreover, in contentious or high-stakes cases, the process may involve additional rounds of litigation and delay in final resolution.
Despite these challenges, the instruction represents a positive step towards effective implementation of judicial rulings and maintenance of legal consistency in reassessment proceedings. It reflects a maturing of institutional response to landmark judgments and a commitment to uphold the rule of law in tax administration.
Administrative Readiness and Institutional Coordination
The effective implementation of CBDT Instruction No. 1 of 2023 hinges significantly on the administrative capabilities of the income tax department. The instruction is comprehensive and procedural, spanning multiple categories of cases and requiring tailored action in each scenario. However, its success depends not just on the clarity of direction but also on the actual preparedness of the department at various levels. From identifying affected cases to coordinating legal filings and ensuring timely reopening, the workload demands operational precision, trained personnel, and systematic tracking mechanisms.
The instruction imposes deadlines, requires strict procedural compliance, and mandates legal coordination with counsel at multiple appellate levels. These expectations cannot be met in isolation. Field officers must collaborate with the legal wing, supervisory officers must monitor progress, and zonal and regional authorities must ensure that no case falls through the cracks. Without such coordinated effort, there is a risk of selective or inconsistent application, which can dilute the overall purpose of the instruction and expose the department to allegations of arbitrariness or unequal treatment.
Technology can play a critical role here. Data mining, centralised case management systems, and workflow dashboards can help track case status, identify inconsistencies, and generate automated alerts when deadlines for filing appeals, reviews, or reassessments approach. Institutionalising such systems would not only support the implementation of this instruction but would also improve the department’s long-term litigation management capabilities.
Legal Risk Mitigation and Policy Uniformity
Another dimension of the instruction lies in the minimisation of legal risks. The CBDT’s proactive approach to issuing guidelines post the Supreme Court’s judgment demonstrates a commitment to legal compliance and standardisation. It also prevents the proliferation of contradictory practices across jurisdictions. By directing Assessing Officers, Departmental Representatives, and Standing Counsels to act by the Supreme Court’s ruling, the instruction upholds the constitutional obligation of following binding precedent and avoids the risk of contempt or judicial reproach.
Uniform implementation is also essential to maintain public trust and uphold the department’s credibility. Taxpayers and professionals often criticise the selective application of court rulings or the discretionary enforcement of law. This instruction, if followed rigorously, addresses that concern. By explicitly stating where action is and is not required, and by offering mechanisms for redress of inconsistent decisions, the instruction brings transparency and structure to a sensitive area of tax enforcement.
At the same time, the instruction leaves certain interpretational questions open. For instance, how will Assessing Officers determine whether a case qualifies as being ‘tagged’ or analogous to the lead case of Abhisar Buildwell? Will reopening be pursued in borderline cases, and how will disputes about applicability be resolved? While the instruction sets out a framework, further clarification or departmental training may be necessary to ensure a uniform understanding of its provisions across all field offices.
Impact on Pending and Concluded Litigation
One of the most significant impacts of the instruction will be seen in pending and concluded litigation. For pending cases at the CIT(A), ITAT, and High Court levels, the instruction provides a roadmap for legal teams to ensure that the Abhisar Buildwell judgment is presented before the adjudicating authority. This not only informs the tribunal or court but also helps in shaping the judicial outcome in alignment with the Supreme Court’s findings.
However, for concluded cases where the appellate decision is already passed but inconsistent with the Supreme Court ruling, the process becomes more delicate. Filing of Miscellaneous Applications or Notices of Motion involves litigation risk and further delays. It also imposes a compliance burden on taxpayers who believed their disputes had already reached finality. In such cases, balancing the correction of legal inconsistencies with principles of finality and fairness becomes complex.
Taxpayers may resist reopening or review because their matter was decided after a full hearing, that facts were distinguishable, or that they had acted on the presumption of closure. These positions may lead to protracted litigation. Therefore, while the instruction enables legal rectification, it simultaneously creates scope for further contest, especially in high-value or fact-intensive cases.
Implications for Revenue Realisation
From the perspective of revenue, the instruction offers both opportunities and constraints. On one hand, cases that were previously lost or diluted due to conflicting decisions or absence of incriminating material may now be reopened where warranted. This could potentially lead to revenue augmentation, particularly in search and seizure cases where high-stakes assessments are common.
On the other hand, the instruction’s cautious stance to not disturb concluded matters unless specifically covered by certain exceptions may limit the department’s ability to revisit potentially erroneous assessments. The decision not to initiate reopening in cases where the appellate order has attained finality reflects administrative pragmatism but may be seen as a lost opportunity from a revenue standpoint.
In essence, the instruction strikes a balance. It avoids disruptive mass reassessment exercises, protects taxpayer certainty, and restricts enforcement to manageable and legally defensible boundaries. This is a conscious shift from aggressive reopening policies that were earlier viewed as leading to excessive litigation and administrative overload.
Promoting Procedural Fairness and Taxpayer Rights
An important theme running through the instruction is the emphasis on procedural fairness. The insistence on following the reopening process under section 148A, as reiterated in para 7.2.1, safeguards taxpayer rights to notice, reply, and reasoned adjudication before reopening. This protects against arbitrary or abrupt assessments, aligns with the principles laid down in the Ashish Agarwal judgment, and reinforces the taxpayer’s right to be heard.
By demanding that each reopening action be based on the legal route of section 147 read with section 150 and processed under section 148A, the instruction builds procedural integrity into the implementation framework. It implicitly discourages informal or hurriedreopening anddd ensures that the decision to reassess is judicially reviewable.
From the taxpayer’s perspective, this transparency enhances confidence in the legal process. Knowing that reopenings are limited, time-bound, and subject to structured inquiry allows taxpayers to plan their affairs with greater certainty. It also gives the taxpayer a platform to contest reopening through factual rebuttal and legal argument before any reassessment is finalised.
Final Observations and Strategic Reflections
The issuance of CBDT Instruction No. 1 of 2023 in response to the Supreme Court’s judgment in the Abhisar Buildwell case is a well-considered regulatory measure. It reflects a shift towards more structured and legally consistent tax administration. By acknowledging the practical challenges of implementing the ruling across multiple assessment years and case types, the instruction sets a realistic framework for the department’s action. It also builds in safeguards for taxpayers and lays out clear steps for reopening only when statutorily and judicially permitted.
The strategic benefit of such an instruction lies in avoiding future litigation on grounds of arbitrariness, ensuring that courts are not overburdened by conflicting departmental actions, and bringing predictability to reassessment proceedings. It also signals the department’s willingness to follow judicial discipline and administrative restraint, thereby improving its institutional image.
Nevertheless, the ultimate success of the instruction depends on how it is executed on the ground. Field officers must be trained, timelines must be adhered to, and reviews must be conducted with due seriousness. Inappropriate or inconsistent application will erode the benefits intended by the instruction. Taxpayers and professionals, too, must remain vigilant, review their pending and disposed cases in light of the instruction, and be prepared to respond to new proceedings or review applications that may be initiated under its provisions.
Conclusion
The Supreme Court’s ruling in the Abhisar Buildwell case has altered the legal landscape for reassessment under sections 153A and 153C. The CBDT’s Instruction No. 1 of 2023 provides a structured, practical, and legally compliant mechanism to implement the judgment. It balances revenue interests, legal obligations, and procedural fairness. The instruction limits arbitrary reopenings, mandates procedural safeguards, and offers clarity on remedial steps where inconsistent decisions have been rendered.
Its success lies in consistent implementation, coordinated execution, and stakeholder awareness. If followed in both letter and spirit, the instruction has the potential to bring greater coherence to reassessment jurisprudence, reduce litigation, and reinforce public trust in the fairness and discipline of the income tax administration system.