Reassessment against dissolved Firm is void – ITAT Delhi Quashes ₹17 Crore Addition
The Delhi ITAT quashed reassessment orders passed u/s 147 r.w.s. 144B for A.Ys. 2013–14 and 2014–15 against M/s. Shree Ganesh Commodity Brokers, a firm dissolved in 2014, holding that notices issued in the name of a non-existent entity violated Section 283(2), especially when the dissolution and PAN cancellation request had been duly intimated to the Department on 28.11.2014. Despite this, the AO issued notices u/s 148 on 21.06.2021 and 13.04.2021 without addressing them to the erstwhile partners, rendering the entire proceedings void ab initio, with the Tribunal relying on Supreme Court rulings like Maruti Suzuki India Ltd. (416 ITR 613) and Gujarat HC’s 2024 judgment in Nathalal Hemabhai Patel (167 taxmann.com 337). The Tribunal further deleted the substantive additions of ₹3.82 crore (A.Y. 2013–14) and ₹13.28 crore (A.Y. 2014–15) made under Section 68, as the so-called “unexplained cash credits” were in fact business losses from SEBI-compliant stock exchange transactions, recorded in audited books and not resulting in any credit entries. Relying on the coordinate bench ruling in Marut Nandan & Co. (2025 SCC OnLine ITAT 1702), it was held that Section 68 cannot be invoked on outgoings or losses, as they do not constitute income or credits.
The copy of the order is as under:
