Desu Enterprises Vs ITO (ITAT Hyderabad)
Old-Law Reassessment Collapses — Section 148 Notice Issued Post-01.04.2021 Without Section 148A Held Void
The Hyderabad Bench of the Income Tax Appellate Tribunal quashed the reassessment proceedings on a pure jurisdictional defect, holding that the notice issued under Section 148 was invalid in law.
The decisive issue was the true date of issuance of the reassessment notice. Although the notice bore the date 31.03.2021, the assessees conclusively demonstrated—through email delivery timestamps and Income-tax portal records—that the notice was actually communicated only on 01.04.2021. The Revenue’s plea that the notice was generated or dispatched on the ITBA portal on 31.03.2021 and that subsequent email delivery was due to technical delay was expressly rejected.
The Tribunal held that “issuance” of a notice is complete only when it is effectively communicated to the assessee and leaves the control of the Department, and that mere generation or uploading on the portal does not amount to issuance. This conclusion was reached by placing reliance on binding precedents, including Ashish Agarwal (SC), Kalyan Chillara (Telangana HC), and the authoritative exposition on electronic issuance in Suman Jeet Agarwal (Delhi HC).
Once it was held that the notice was issued on 01.04.2021, the Tribunal ruled that the case was governed by the new reassessment regime introduced by the Finance Act, 2021. Under this regime, strict compliance with Section 148A—issuance of a show-cause notice, grant of opportunity of hearing, and passing of a reasoned order—is a mandatory jurisdictional pre-condition. In the present case, it was an admitted fact that no procedure under Section 148A was followed.
Accordingly, the Tribunal held that the reassessment notice was void ab initio, and the consequential assessment orders passed under Sections 147 read with Sections 144 and 144B were unsustainable and liable to be quashed. As the appeals were allowed on this legal ground alone, all issues on merits, including additions relating to alleged unexplained cash deposits, were left open and not adjudicated.
The Tribunal also condoned a short delay in filing one of the appeals, adopting a liberal and justice-oriented approach, upon being satisfied that the delay was attributable to bona fide and unavoidable circumstances.
Key Ratio:
Jurisdiction under reassessment hinges on the date of actual communication of notice; post-01.04.2021 issuance without Section 148A compliance is a nullity.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
