TaxTMI 
TaxTMI 
2025 (7) TMI 1102
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....liable to be quashed. 2. The notice dt.27.07.2022 issued u/s 148 is liable to be quashed because it was a case of issuance of notice after lapse of more than 3 years from the end of the relevant assessment year and the JAO was not in possession of books of account or order documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset has escaped assessment. 3. The notice dt.27.07.2022 u/s 148 is liable to be quashed because the same was not bearing DIN. Even in the letter dt. 28.07.2022, it was mentioned "This is to inform you that Notice u/s 148 of the Income-tax Act, 1961 dated 28/07/2022 is having Document No. (DIN) ITBA/AST/M/148_1/2022-23/1044242880(1)". 4. The re-assessment order dt. 25.05.2023 passed u/s 147 r.w.s. 144B is liable to be quashed/ annulled because the jurisdictional notice u/s 148 was not served in accordance with the provisions of the I.T. Act, 1961. 5. The re-assessment order dt. 25.05.2023 passed u/s 147 r.w.s. 144B is liable to be quashed/ annulled because an order disposing the objections raised, was not passed prior to the passing of the said assessment order. ....
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.... of the provisions of section 151(1A). 14. The order dt.27.07.2022 passed by the JAO u/s 148A(d) is liable to be quashed because the same had been passed in a non-faceless manner, in utter violation of the provisions of section 151(1A). 15. The notice dt. 27.07.2022 issued by the JAO u/s 148 is liable to be quashed because the same had been issued in a non-faceless manner, in utter violation of the provisions of section 151(1A). 16. The re-assessment order dt. 25.05.2023 passed u/s 147 rws 144B is bad in law because the same was not passed on the strength of the notice dt.21.06.2021 u/s 148. 17. The re-assessment order dt. 25.05.2023 passed u/s 147 rws 144B is bad in law because the same was barred by limitation, in as much as the period of limitation was required to be counted from 21.06.2021 (which was the date of issuing the notice u/s 148). 18. The additions of Rs. 3,82,53,897/- made u/s 68 are not sustainable because no addition/disallowance under the head 'Capital Gains' was made. The re-assessment proceedings were initiated on the ground that the Short Term Capital Loss was claimed. 3. Brief facts of the case are that, ....
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....aside the order impugned. 8. The Ld. Counsel further submitted that the Ld. A.O. issued notice dated 21/06/2021 and 13/04/2021 u/s 148 of the Act for the Assessment Years 2013-14 and 2014-15 respectively in the name of M/s Shree Ganesh Commodity Brokers which was at that point of time, a non-existing entity. Therefore, submitted that the issuance of notice on non-existing entity and framing the assessment orders thereupon will vitiate entire assessment proceedings for defective/nonservice of notice. The Ld. Counsel further submitted that the A.O. who was fully aware of dissolution of the firm, ought to have issued notice to the then existing partners of the firm as on the date of dissolution and should have served the notice u/s 148 of the Act on those partners. Thus, the Ld. Counsel submitted that the assessment order passed by the A.O. for both the Assessment Years are without issuing/serving proper notice u/s 148 of the Act therefore, sought for allowing the Ground No.1. 9. Per contra, the Ld. Departmental Representative submitted that though the Assessee firm has been dissolved, the Assessee/partners of the firm cannot escape from tax liability. The Ld. Departmental Repre....
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....tion had taken place, and all the provisions of this Act, including the provisions relating to the levy of a penalty or any other sum chargeable under any provision of this Act, shall apply, so far as may be, to such assessment. (2) Without prejudice to the generality of the foregoing sub-section, if the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceeding under this Act in respect of any such firm as is referred to in that sub-section is satisfied that the firm was guilty of any of the acts specified in Chapter XXI, he may impose or direct the imposition of a penalty in accordance with the provisions of that Chapter. (3) Every person who was at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum. (4) Where such discontinuance or dissolution takes place after any proceedings in respect of an assess....
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....rm on 28/11/2014 itself. However, though the fact of dissolution of the Assessee firm was well within the knowledge of the Department/A.O., after six years five months from the date of the said information provided by the Assessee, the A.O. issued notice u/s 148 of the Act in the name and address of Assessee. Further, it is also observed that subsequent notices u/s 148A (b) of the Act dated 30/05/2022, notice u/s 148(d) of the Act dated 27/07/2022 and notice u/s 148 of the Act dated 27/07/2022 were also issued on the very same name and address of the Assessee firm. None of the above notices have been issued to the partners of the dissolved firms or to the partners immediately before the dissolutions. 17. The provision of Section 283 (2) of the Act deals with service of notice in case of dissolved firm. For the sake of ready reference, provision of Section 283 of the Act are reproduced as under:- Section 283 Service of notice when family is disrupted or firm, etc. is dissolved. "(1) After a finding of total partition has been recorded by the Assessing Officer under Section 171 in respect of any Hindu family, notices under this Act in respect of the inco....
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....ssolution of firm and issuance of notice in name of the dissolved firm, the impugned notice and the order would not be tenable more particularly, when the petitioner has in reply to the notice issued u/s 148A (b) of the Act has drawn the attention of the respondent-Assessing Officer about such fact. 10. In view of the settled legal position as held by the Hon'ble Apex Court in case of Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Limited reported in [2019] 107 taxmann.com 375/265 Taxman 515/416 ITR 613, the impugned notice and the order are required to be quashed and set aside." 20. The similar ratio has also been laid down in following judicial decisions:- a). ACIT Vs. M/s. Neha Enterprises, 2017 SCC OnLine ITAT 19117 ITA No. 3666/Mum/2015-Order dated 20.12.2017, b). SavitaKapila Vs. ACIT, 426 ITR 502 (Delhi), c). DCIT Vs. NDC Telecommunications India Pvt. Ltd., 2018 SCC OnLine ITAT 691 ITA No. 3011/Del/2015-Order dt. 16.10.2018, d). Pr. CIT Vs. Maruti Suzuki (India) Ltd. 416 ITR 613 (SC), e). Alok Knit Exports Ltd. Vs. DCIT, 446 ITR 748 (Bom) 21. Considering the above facts and circumstances and also the ....
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.... go and depletion of funds. Therefore, the said business loss could fall within the expression (unexplained cash credit). The out go/loss has resulted in a debit transaction, rather than credit transactions. Therefore, the A.O. could not have made the addition u/s 68 of the Act. 26. The Co-ordinate Bench of the Tribunal in the case of Marut Nandan& Co. in ITA No.4751/Del/2024 2025 SCC OnLine ITAT 1702), while dealing with the similar issue held as under:- "18. At this juncture, we also however advert to the merits of the addition under s. 68 of the Act. It is pointed out on behalf of the assessee that it has neither claimed any short term capital gains nor claimed any exempt capital gain tax. Thus, the allegation that unaccounted money has been routed using penny stocks is prima facie bereft of any logic. The assessee has actually incurred business losses on the transactions in Banas Finance Ltd., a stock which is otherwise duly listed on the platform of the exchanges and transactions registered have been routed through SEBI registered stock brokers. The loss claimed has actually resulted in an outgo and depletion of funds. Hence the business loss by no stretch of imagi....