Ketan Natvarlal Shah Vs ITO (ITAT Surat)
The ITAT, Surat Bench, held that re-opening based on a notice u/s 148 dated 31-03-2021 but actually issued/served on 01-04-2021 is invalid in law, as it falls under the new reassessment regime effective from 01-04-2021.
In this case (AY 2013-14), the AO claimed to have issued notice u/s 148 on 31-03-2021 under the old law. However, system-generated records clearly showed that the notice was issued and served through e-proceedings on 01-04-2021. Once the notice crosses into 01-04-2021, the AO was mandatorily required to follow the procedure u/s 148A—treat the notice as 148A(b), pass a speaking order u/s 148A(d), and then issue a fresh 148 notice, in terms of SC ruling in Ashish Agarwal.
The Tribunal noted that no action u/s 148A was taken at all. Relying on Gujarat HC in Saumil Abhinash Baheti and the binding directions of the Supreme Court, the Bench held that the notice was neither valid under the old regime nor compliant with the new law. Such a jurisdictional defect cannot be cured.
Accordingly, the entire reassessment u/s 147 r.w.s. 144 was quashed, and since the reopening itself failed, all other issues (LTCG addition, set-off, penalty & interest) became purely academic. The appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT SURAT
