Vinay Narayan Kedia Vs ITO (ITAT Delhi)
AY 2015-16 Reassessment Time-Barred Post Rajeev Bansal: ITAT Mumbai Quashes Section 148 Notice & Penny-Stock Addition
The Mumbai ITAT “F” Bench allowed the appeal of Mr. Vinay Narayan Kedia (ITA No. 5289/Mum/2024, AY 2015-16) by quashing the reassessment proceedings as time-barred, holding that the notice issued u/s 148 dated 26.07.2022 was beyond limitation in light of the Supreme Court ruling in UOI vs. Rajeev Bansal and, consequently, set aside the entire assessment including the penny-stock addition of ₹1.26 crore u/s 68
The case was reopened on allegations of bogus LTCG from sale of shares of Solis Marketing Ltd. (earlier Surya Marketing Ltd.). Although an earlier notice dated 03.05.2021 under the old regime was later treated as a deemed notice u/s 148A pursuant to Ashish Agarwal, the final notice u/s 148 was issued only on 26.07.2022.
The Tribunal, after extensively analysing the Supreme Court judgment in UOI vs. Rajeev Bansal (167 taxmann.com 70), held that TOLA does not apply to AY 2015-16, and therefore any notice issued on or after 01.04.2021 for AY 2015-16 is invalid. The Revenue itself had conceded before the Supreme Court that all notices for AY 2015-16 issued after 01.04.2021 must be dropped. Since the impugned notice fell well beyond the surviving limitation period, it was declared void ab initio.
Once the jurisdictional defect was established, the ITAT held that all consequential proceedings and additions automatically collapse, rendering academic the merits relating to denial of exemption u/s 10(38) and addition u/s 68 on alleged penny-stock gains.
Accordingly, the ITAT allowed the assessee’s appeal in full, reaffirming that post-Rajeev Bansal, reassessment notices for AY 2015-16 issued after 01.04.2021 are nonest in law, and quashed the entire reassessment proceedings.
FULL TEXT OF THE ORDER OF ITAT DELHI
