Satva Merchandize Pvt. Ltd. Vs ITO (ITAT Ahmedabad)
Reopening for AY 2015-16 Based on Notice Issued After 01.04.2021 Held Void; Entire Proceedings Under 148A & 147 Quashed
In this appeal filed by Satva Merchandize Pvt. Ltd. against the reassessment framed u/s 147 r.w.s. 144B, ITAT Ahmedabad examined the validity of notices issued under the new reassessment regime for AY 2015-16. The Assessing Officer had initially issued a notice u/s 148 on 20.04.2021 alleging accommodation-entry purchases of Rs. 440 crores from companies belonging to the Ardor Group. Despite an interim stay by the Gujarat High Court, the Assessing Officer issued a fresh notice u/s 148A(b) on 27.05.2022 following the Supreme Court ruling in Ashish Agarwal, and subsequently passed an order u/s 148A(d) on 29.08.2022, followed by another notice u/s 148 and a reassessment order dated 30.05.2023.
Before the Tribunal, the Assessee argued that the original notice dated 20.04.2021 was issued after 01.04.2021 for AY 2015-16, which made it non est in law in light of the binding Supreme Court judgment in Union of India v. Rajeev Bansal, wherein the Revenue conceded that all reassessment notices for AY 2013-14, 2014-15 & 2015-16 issued on or after 01.04.2021 must be dropped because those years lay outside the TOLA relaxation window. The Assessee further relied on the Supreme Court’s subsequent order in Deepak Steel & Power Ltd., which quashed a similar notice dated 25.06.2021 for AY 2015-16. The jurisdictional Gujarat High Court in Narendra Maganlal Purohit had also followed Rajeev Bansal & held that such notices were void ab initio.
The Tribunal held that these authoritative pronouncements squarely covered the Assessee’s case. The notice dated 20.04.2021 was issued beyond the permissible limitation period & hence lacked jurisdiction from inception. The Tribunal further held that the deeming fiction in Ashish Agarwal cannot resurrect an invalid notice nor extend statutory limitation under section 149. Therefore, once the foundation notice was invalid, all subsequent proceedings—148A(b), 148A(d), fresh notice u/s 148, & the reassessment order u/s 147 r.w.s. 144B—automatically collapsed.
Consequently, the Tribunal quashed the entire reassessment proceedings & allowed the appeal on the jurisdictional ground without examining the additions on merits.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
