AO Cannot Reopen Scrutiny After Passing Order on Modified Return u/s 170A | HC

Case Details: Bajaj Electricals Ltd. vs. Assistant Commissioner of Income-tax - [2026] 183 taxmann.com 637 (Bombay)

Judiciary and Counsel Details

• B. P. Colabawalla & Firdosh P. Pooniwalla, JJ.
• Nitesh Joshi & Jeet Kamdar for the Petitioner.
• Abhishek R. Mishra for the Respondent.

Facts of the Case

The petitioner filed its original return of income for the relevant assessment year. Subsequently, a revised return of income was filed, and the assessment proceedings were initiated by the issue of notice under Section 143(2). Later, a modified return of income was filed pursuant to Section 170A. During the assessment proceedings, an assessment order was passed.

However, the Assessing Officer (AO) took the income as per the revised return of income, not as per the modified return of income. The assessee filed a rectification application for the same. In addition, the AO issued a notice under section 143(2) seeking to assess the modified return of income filed by the assessee.

The assessee filed a writ petition to the Bombay High Court against the notice issued by the AO under section 143(2).

High Court Held

The High Court held that Section 170A(2)(b) makes a distinction between two scenarios. One is where the assessment is completed on the date of furnishing the modified return of income, and the other is where the assessment is pending on the date of furnishing such return of income.

Where the assessment proceedings are pending on the date of furnishing of the modified return of income, the AO has to pass an order assessing or reassessing the total income of the relevant assessment year in accordance with the order of the business reorganisation and taking into account the modified return so furnished.

In the instant case, the assessment proceedings were pending when the modified return of income was filed. The AO was under an obligation to assess the total income of the relevant assessment year in accordance with the order of the business reorganisation, and taking into account the modified return so furnished. In fact, the AO carried out that exercise, examining the aspects arising from the modified return of income.

Since the modified return of income has already been subjected to scrutiny and an assessment order passed thereon, the issuance of the impugned notices with a view to again scrutinising the said modified return of income is contrary to the express provisions of Section 170A(2)(b) of the IT Act.