Reassessment proceedings initiated against a business entity that has ceased to exist due to dissolution are void ab initio and legally unenforceable, as jurisdictional notices cannot be issued against a non-existent entity.

ORDER

PER: SUNIL KUMAR SINGH, J.M.

The facts and issues involved in both these appeals are almost identical, hence, for the sake of convenience and brevity, these appeals are being decided by this common order. The facts of ITA No. 260/Agr/2026 are only being narrated hereunder:-

ITA No. 260/Agr/2026

2. This appeal is directed against the impugned order dated 13.01.2026 passed in appeal No NFAC/2016-17/10386788 by the ld. Commissioner of Income Tax (NFAC), Delhi (hereinafter referred to as the “CIT(A) u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2017-18, wherein ld CIT(A) has dismissed assessee’s first appeal.

3. The brief facts state that the assessee as partnership firm (according to the assessing officer) did not file return of income for A.Y. 2017-18. There was an information available with the revenue that the assessee had entered into transaction of cash deposit of Rs. 1,51,01,510/- in the bank account no. 31590200000490 maintained with the Bank of Baroda, Agra. Statutory notice u/s 142(1) of the Act was issued during the assessment proceedings with the observation that the assessee was a partnership firm and the source of the said cash deposit was unexplained. The assessee remained totally non compliant during the assessment proceedings. The assessment was, thus, completed u/s 147 r.w.s 144 r.w.s. 144B of the Act, vide assessment order dated 29.03.2022, making an addition of the aforesaid amount in the total income of the assessee u/s 69A of the Act. Penalty proceedings u/s 271AAC(1) of the Act, were also initiated separately.

4. Aggrieved, assessee preferred an appeal before ld CIT(A), who dismissed assessee’s appeal and sustained the assessment order.

5. Assessee has raised following grounds under this second appeal:

“1. BECAUSE the purported "reasons to believe" are no reasons in the eyes of law, being vague, mechanical and devoid of any intelligible nexus between the alleged transactions and the income chargeable to tax said to have escaped assessment.

2. BECAUSE the very foundation of the reopening is factually erroneous inasmuch as the alleged escapement has been premised on cash deposits of Rs. 1,51,01,510/- in Bank Account No. 31590200000490 maintained with Bank of Baroda, whereas in fact no such cash deposits to that extent were made and the transactions were purely bank transfers, thereby clearly evidencing complete

non-application of mind by the authority recording the reasons, rendering the impugned reassessment proceedings under Section 148 liable to be quashed.

3. BECAUSE, the sanction as was mandatorily required to be accorded by the Pr. Commissioner of Income Tax under section 151 of the Act before issuing Notice under section 148 of the Act was though accorded by the Pr. Commissioner of Income Tax but without application of mind in a mechanical manner, leading the Notice issued under section 148 of the Act to be held without jurisdiction and consequent assessment order passed in pursuance of such an invalid Notice to be held as void-ab-intio.

WITHOUT PREJUDICE TO THE ABOVE

4. BECAUSE, the authorities below were highly unjustified in making and sustaining addition of Rs.1,51,01,510/- ignoring the facts and circumstances of the case and material evidences.

5. BECAUSE, the Ld. CIT(A) has erred both in law and on facts in holding that the appellant failed to furnish evidence regarding dissolution of the partnership firm, without properly appreciating the documentary evidences placed on record during appellate proceedings, including the T