Supreme Court Dismisses Challenge To Gujarat HC Order Quashing Rasna Reassessment Over Deactivated PAN

The Supreme Court of India on Friday refused to interfere with a Gujarat High Court order quashing reassessment proceedings against Rasna Pvt Ltd, which had been initiated using a deactivated PAN.

Rasna Pvt Ltd, known for manufacturing soft drink concentrates, had challenged the notices issued under the Income Tax Act on the ground that all transactions were disclosed under its active PAN following amalgamation.

The Gujarat High Court had, on October 15, 2025, quashed notices issued under Sections 148A(b) and 148 of the Income Tax Act, holding that they were based on a deactivated PAN and were unsustainable.

The court observed that it was “astonishing that the system is unable to record the deactivated PAN so as to not to harass the assessees by issuing the frivolous notices.”

A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe found no ground to interfere with the high court order.

The dispute arose after the Income Tax Department issued reassessment notices for Assessment Years 2016-17 and 2017-18 in the name of Rasna Pvt. Ltd. using an old PAN that had ceased to exist following amalgamation in 2009. Despite the assessee repeatedly clarifying that all transactions were reflected under the new PAN, the department proceeded on the basis of system-generated information.

The High Court found that the action reflected non-application of mind and reliance on incorrect system data, especially when the assessee had consistently disclosed the correct PAN and transactions.

The top court has now refused to interfere with the High Court's decision, upholding the quashing of the reassessment proceedings.