The Crust and the Crumb: Finality of a Settlement Order Against Reassessment

Source: Taxmann research opinion — The Crust and the Crumb: Finality of a Settlement Order Against Reassessment Opinion.

Underlying judgment: Assistant Commissioner of Income Tax & Anr. v. M/s Omaxe Limited (2026 INSC 1000), authored by Justice S.V.N. Bhatti (bench with Justice N.V. Anjaria).

Holding (as reported): Once the Income Tax Settlement Commission (ITSC) determines net taxable income by a final order under Section 245D(4) of the Income Tax Act, 1961, the Assessing Officer cannot issue a reassessment notice under Section 148 to reopen issues already covered by that settlement. The Revenue’s statutory route to unsettle such an order is an application before the ITSC under Section 245D(6) alleging fraud or misrepresentation — not independent reassessment by the AO.

The Court described settlement under Chapter XIX-A as a bargain in which the Revenue and the assessee must take the “crust and the crumb” together: both sides give up and gain something, and neither may later selectively reclaim what was surrendered once the settlement attains finality.

This digest is published for professional awareness with attribution to Taxmann. Read the full Taxmann opinion and the Supreme Court judgment via the source link.