SC, Finality of assessments and Doctrine of Merger

The decision in Assistant Commissioner of Income Tax v. Adani Power Limited, affirmed by the Supreme Court on 22 January 2026, marks a significant reaffirmation of the settled limits on reopening completed income-tax assessments. The ruling reinforces that reassessment cannot be used as a tool for review on the basis of audit objections or a mere change of opinion, particularly where a scrutiny assessment under section 143(3) has already examined the issue. By declining to interfere with the Gujarat High Court’s reasoning on merits, the Supreme Court has lent finality to the principles governing reassessment beyond four years and underscored the continued relevance of the doctrine of merger in tax litigation.