SHIVASHANKRAPPA SAHUKAR,KALABURAGI vs. ITO, WARD-1, KALABURGAI

ITA 155/BANG/2026Status: DisposedITAT Bangalore29 September 2026AY 2015-1611 pages
AI SummaryPartly Allowed

What were the facts?

The appeal by Shivashankrapppa Sahukar (the assessee) is against the order dated 21 December 2025 of the National Faceless Appeal Centre (NFAC), Delhi, for assessment year 2015-16. The NFAC had dismissed the assessee's appeal against a reassessment order passed under section 147 read with section 144B of the Income-tax Act, 1961. The assessee's grounds of appeal primarily challenge the assumption of jurisdiction by the Assessing Officer (AO) for reassessment, the validity of the notice issued, the AO's failure to record proper reasons to believe, and the AO's conduct of a complete scrutiny instead of a limited one. The dispute involves alleged cash deposits into bank accounts amounting to Rs. 76,79,400/-, with the assessee claiming agricultural income of Rs. 10,73,855/-.

What did the Tribunal hold?

The Tribunal held that the Rs. 50 lakh threshold under section 149 must be examined at the time the notice under section 148 is issued. Subsequent outcomes, like lower additions, do not invalidate the reopening. Therefore, the argument that the alleged unexplained income was below the threshold was dismissed. Regarding limited versus complete scrutiny, the Tribunal stated that this distinction is not applicable to reassessment proceedings, which reopen the entire assessment. The assessee failed to produce evidence before the AO and CIT(A) to substantiate agricultural income, beyond proof of landholding. Ownership of land does not establish agricultural income or the source of bank deposits. The assessee must provide details of crops, sales, purchasers, and expenses. The Tribunal granted the assessee a further opportunity to produce evidence before the AO within 90 days to establish that the deposits arose from agricultural income. If not substantiated, the AO can restore the addition. Grounds 6-14 were allowed to the extent stated, concerning the determination of agricultural income and related unexplained cash deposits. The appeal was partly allowed for statistical purposes.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 read with section 144B of the Income-tax Act, 1961, are valid, considering the alleged failure to record proper reasons to believe and the issuance of notice on 30.03.2022, digitally signed on 31.03.2022. 2. Whether the reassessment is invalid for not meeting the threshold of Rs. 50,00,000/- in undisclosed income as per section 149 of the Act, after considering the claimed agricultural income. 3. Whether the AO erred in conducting a complete scrutiny assessment when proceedings were initiated for limited scrutiny, and if prior approval was obtained. 4. Whether the AO violated principles of natural justice by not considering cash withdrawals and available cash on hand vis-à-vis bank deposits and agricultural income. 5. Whether the addition of Rs. 50,99,684/- as unexplained money under section 69A of the Act is sustainable, given the assessee's claim of agricultural income and the conditions for invoking section 69A. Assessee's Contentions: The assessee argued that the reassessment was invalid due to improper reasons to believe and a notice issued mechanically. The undisclosed income, after deducting agricultural income, was below the Rs. 50 lakh threshold under section 149. The AO exceeded the scope of limited scrutiny. Principles of natural justice were violated by not considering cash withdrawals and available cash. The addition under section 69A was unsustainable as the deposits were explained by agricultural income and prior withdrawals. Revenue's Contentions: The revenue did not explicitly present its arguments in the provided text, but the AO's actions and the NFAC's dismissal imply a contention that the reassessment was valid and the additions were justified.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 144,Section 149,Section 69A,Section 10,Section 148,Section 143,Section 142

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDRARAJAN K.

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

This appeal by SHIVASHANKRAPPA SAHUKAR (the assessee/appellant) concerns the order dated 21 December 2025 of the National Faceless Appeal Centre (NFAC), Delhi, for assessment year 2015–16. The NFAC dismissed the assessee’s appeal against the reassessment order passed under section 147 read with section 144B of the Income-tax Act, 1961 (the Act).

2.

The Assessee has raised the following grounds of appeal:

ITA 155/B

The order continues below.

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