A.B. Motors Pvt. Ltd. Vs DCIT (ITAT Chandigarh)
ITAT Chandigarh: Reopening for AY 2015-16 After 01.04.2021 Invalid; Consequential Section 263 Order Also Quashed
The Income Tax Appellate Tribunal allowed both appeals of the assessee for AY 2015-16, holding that the reopening under section 147 pursuant to a notice under section 148 issued after 01.04.2021 was time-barred, and consequently, the revisionary order under section 263 could not survive.
On the quantum appeal, the Tribunal noted that the notice under section 148 dated 12.04.2021 sought to reopen AY 2015-16 based on information from the GST Intelligence regarding alleged non-payment of service tax on incentives. Relying on the Supreme Court’s ruling in Union of India v. Rajiv Bansal, the Tribunal held that for AY 2015-16, notices issued on or after 01.04.2021 are not saved by TOLA and must be dropped. Accordingly, the reopening was quashed as invalid in law.
On the section 263 appeal, the Tribunal held that once the reassessment itself stands quashed, there remains no subsisting assessment order that can be termed erroneous and prejudicial to the interests of the Revenue. The very foundation for invoking section 263 was extinguished, and therefore, the revisionary order was also set aside.
Result: Both appeals were allowed—the reopening was quashed and the consequential section 263 order was annulled.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The assessee is in appeal against the orders of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 20.08.2024 passed u/s 250 of the Income Tax Act, 1961 and the order of ld. Commissioner of Income Tax ( in short ‘the CIT’) dated 25.01.2024 passed u/s 263 of the Income Tax Act in assessment year 2015-16.
