NEHA HIRANAND MOTWANI,NASHIK vs. ITO INTERNATIONAL TAX, NASHIK

ITA 1570/PUN/2026Status: DisposedITAT Pune05 October 2026AY 2020-218 pages
AI SummaryAllowed

What were the facts?

The assessee, Neha Hiranand Motwani, an individual and a non-resident Indian employed in Oman, is in appeal against the order dated 31.01.2026 of the CIT(A), Pune-13, which stemmed from an assessment order dated 30.03.2025 passed under Section 147 read with Section 144C(3) of the Income Tax Act, 1961. For Assessment Year 2020-21, the assessee had not filed a return of income. Information from the NMS module indicated a Time Deposit of Rs. 10.00 lakh in Yes Bank. A show cause notice under Section 148A(d) was issued on 28.02.2024. During assessment proceedings, the assessee filed a return on 03.05.2024 declaring an income of Rs. 5,68,520/- and explained the source of the Time Deposit. The Assessing Officer (AO) did not make any addition on the grounds for reopening but instead added 50% of rental income allegedly received by the assessee's husband, citing lack of time to reopen the spouse's assessment.

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings are illegal and bad in law. The Assessing Officer travelled beyond the reasons for reopening the assessment. The original reasons for reopening pertained to Time Deposits and interest income, but no addition was made on this issue. Instead, an addition was made on a new issue concerning rental income of the assessee's husband, for which no fresh notice under Section 148 of the Act was issued. The Tribunal relied on the ratio laid down by the Jurisdictional High Court in CIT Vs. Jet Airways (I) Ltd., which states that if the AO accepts the assessee's contention that the income for which the belief of escapement was formed has not actually escaped, it is not open for the AO to independently assess some other income without issuing a fresh notice under Section 148. Similar principles were affirmed by the Gujarat High Court in CIT-II vs. Mohmed Juned Dadani. Consequently, the reassessment proceedings were quashed, and the impugned addition was deleted. The assessee succeeded on this legal issue. Remaining grounds on merit were rendered academic and dismissed as infructuous.

What were the issues?

1. Whether the reassessment proceedings are bad in law because no addition was made on the issue forming the basis for reopening, and the reassessment was concluded by making an addition on an altogether different issue, in contravention of Section 147 read with Section 148A of the Act? Assessee's Contention: The assessee argued that the reassessment proceedings are bad in law as the AO travelled beyond the reasons recorded for reopening. The original basis for reopening was the Time Deposit and interest income, but no addition was made on this count. Instead, an addition was made on account of rental income of the assessee's husband, for which no separate notice under Section 148 was issued. The assessee relied on the Tribunal's decision in Shri Ekviradevi Gramin Bigarsheti Sahakari Patsanstha Maryadit Vs. ITO (ITA No.2212/PUN/2026) and the High Court decisions in CIT Vs. Jet Airways (I) Ltd. (2010) 195 Taxman 117 (Bombay) and CIT-II vs. Mohmed Juned Dadani, 30 taxmann.com 1 (Gujarat). Revenue's Contention: No specific arguments were recorded for the revenue on this legal issue.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 144C(3),Section 80P(2)(a)(i),Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE

Before: DR.MANISH BORAD

For Appellant: Shri Pradeep Lodha, CA
For Respondent: Dr. Amit Munde
Hearing: 25.08.2026Pronounced: 05.10.2026

The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 31.01.2026 of ld.CIT(A), Pune-13 emanating out of Assessment Order dated 30.03.2025 passed u/s.147 r.w.s.144C(3) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Assessee apart from raising the grounds on merit has also raised Legal issue in Ground No.2 challenging the re-assessment proceedings as bad in law because no addition was made on the issue forming the basis for reopening and the reassessment was concluded by making addition of an altogether different issue.

3.

I have heard the rival submissions and perused the record placed before

The order continues below.

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