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Income Tax Appellate Tribunal, DELHI BENCH “D”, DELHI
Before: SHRI VIKAS AWASTHY& SHRI M. BALAGANESH
Assessee by : S/Shri Pranshu Singhal, Chartered Accountants & Rahul Bhardwaj, Advocate Department by : Shri M.S Nethrapal, CIT-DR सुनवाई क� ितिथ/ Date of hearing : 27/11/2025 घोषणा क� ितिथ/ Date of pronouncement : : 27/11/2025 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the Assessment Order passed u/s. 147 r.w.s. 144 of the Income Tax Act,1961 (hereinafter referred to as ‘the Act’) dated 24.01.2025, for Assessment Year 2015-16.
The appeal is time barred by 122 days. The assessee has filed an application supported by an affidavit citing reasons causing delay in filing of appeal. After perusal of the same, we are satisfied that delay in filing of appeal is not intentional, the delay has been caused for the reasons stated in petition which appears to be bonafide.
(A.Ys.2015-16) Thus, delay of 122 days in filing of appeal is condoned and appeal is admitted for decision on merits.
Shri Pranshu Singhal, appearing on behalf of the assessee submits that the assessee is an ex-service man and has never entered into any international transaction. Yet, the assessment was completed invoking the provisions of section 144C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The assessment in the case of assessee was made u/s.148 of the Act beyond three years from the end of relevant assessment year, whereas, the only allegation was cash deposits in the bank of the assessee Rs.26,20,000/-. 3.1. Narrating facts of the case, the ld. Authorized Representative of the assessee submitted that on the basis of information received from AIR and CIB that there were cash deposits of Rs.26,20,000/- in the account of the assessee with State Bank of India (SBI) during Financial Year 2014-15, notice u/s. 148A(b) of the Act was issued on 30.03.2022. The said notice was never served on the assessee as the notice was sent to the address where the assessee was posted during his service in the Indian Army. The assessee took voluntary retirement in March 2014, i.e. before the beginning of AY 2015-16. The assessee had never filed his return of income in the past as his income was always below the taxable limit. Thus, the assessee never updated his postal address in the records of the Department. The assesses in response to the notice u/s. 143(1) of the Act dated 29.12.2023 filed reply on 19.01.2024 explaining the reasons for not responding to the notice u/s 148A of the Act and also the fact that during the period relevant to assessment year under appeal, the assessee had deposited Rs.26,20,000/- in his saving bank account with SBI, whereas, the same amount has been added twice for reopening of assessment u/s. 148 of the Act. The assessee further objected that since the assessment u/s.148 of the Act has been (A.Ys.2015-16) initiated beyond the period of three years and the amount is less than Rs.50,00,000/, the assessment proceedings u/s. 148 r.w.s. 147 of the Act are bad in law. 3.2. The ld. AR further submitted that the explanation furnished by the assessee were ignored and the Assessing Officer (AO) passed the Draft Assessment Order dated 22.03.2024 making addition of Rs.52,40,000/-. The assessee filed objections before the Dispute Resolution Panel (DRP) inter alia objecting to initiation of proceeding u/s. 148 of the Act beyond three years, even, though the amount was less than Rs.50,00,000/- and on merits explaining the source of cash deposits of Rs.26,20,000/- in the bank account. The DRP directed the AO to verify the fact of actual amount deposited during the year. On merits the DRP accepted explanation furnished by the assessee with respect to cash deposits to the extent of Rs.17,11,500/-. Consequent, to the direction of DRP, the AO passed the final assessment order dated 24.01.2025 accepting that inadvertently the amount deposited in the bank was taken into account twice while passing the order u/s. 148A(d) of the Act. On merits he made addition of Rs.9,08,500/- on account of unexplained cash deposit u/s.68 r.w.s 115BBE of the Act. The ld. AR submitted that since the cash deposit during the AY 2015-16 were only to the tune of Rs.26,20,000/- the assessment u/s.148 of the Act could not have been made beyond three years. In support of his submissions, he placed reliance on the following decisions: - Abdul Majeed Son of Ali Mohammed vs. ITO, Writ Petition No.7853/2022, decided by Hon’ble Rajasthan High Court on 29.06.2022; - Malkiat Singh vs. ITO, order dated 08.10.2025; - Sri Adiparashakti Boards vs. ITO, order dated 03.04.2025; & - Prakash Babulal Bhandari vs. ITO, order dated 18.06.2025.
Per contra, Shri M.S Nethrapal representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.
(A.Ys.2015-16) 5. Both sides heard, orders of the authorities below examined. The assessee in appeal has inter alia assailed validity of proceeding u/s.148 of the Act on the ground of limitation. Notice u/s.148A(b) of the Act was issued to the assessee on 30.03.2022 for the following reasons: The assessee has not filed Return of Income for the year under consideration and details of the assessee nature of business activities and details of Return of Income is not available. As per information available with this Office you have made cash deposit of Rs. 26,20,000/- with State Bank of India, Corporate Centre as per AIR information & Rs. 26,00,000/- with State Bank of India, Bahadurgarh as per CIB information during the Financial Year 2014-15 relevant to Assessment Year 2015-16. `Since you have not disclosed all the material facts/ above transactions to the department. You are requested to furnish the source of above transactions with documentary evidence. In the absence of source of above transactions, the above transactions remained unexplained and exceeds the maximum amount which is not chargeable to Income-tax. You are requested to furnish your reply onE-filing Portal ( www.incometax.gov.in)(e-proceedings) immediately to Show-Cause as to why proceedings u/s 148 of the Income-tax Act, 1961 may not be initiated against you. Also register your email id onE-filing Portal www.incometax.gov.in) which is mandatory compliance since all correspondence/notices are sent through email only. Please note that this Show-Cause Notice u/s 148A(b) of the Income-tax Act, 1961 is issued after obtaining approval from the specified authority. Please note that in case no reply is received within the stipulated period, it will be presumed that you have nothing to say and the proceedings u/s 148 of the Income Tax Act, 1961 would be initiated accordingly.”
Thereafter, order u/s.148A(d) of the Act of the Act was passed on 07.04.2022 holding that transaction amounting to Rs.52,20,000/- remained to be explained. Apparently, the AO while passing the order mistook the transaction of Rs.26,20,000/- twice as the information was received regarding same transaction from two different source i.e. AIR and CIB. The assessee in response to the notice u/s.142(1) of the Act (A.Ys.2015-16) explained that a single transaction has been considered twice. The AO instead of verifying the same made addition of Rs.52,40,000/- (i.e. after considering same transaction of Rs.26,20,000/- two times). After directions of the DRP, the AO examined the issue and concluded as under:- “Pursuant to the directions issued by the Hon'ble Dispute Resolution Panel (DRP), the addition of Rs.17,11,500/- is hereby deleted. Consequently, the impact of this deletion will be duly incorporated while computing the taxable income of the assessee.Further, upon examining the information that formed the basis for reopening the case, it has been observed that the amount of Rs.26,20,000/- was inadvertently taken into account twice while passing the order under Section 148A(d) of the Act. Accordingly, the correct amount of information w.r.t cash deposits is hereby revised to Rs.26,20,000/-.”
Thus, it is evident that assessment u/s. 147 of the Act was initiated on wrong assumption of facts. The provisions of section 149 of the Act as they were applicable to the assessment year under appeal provides that no notice u/s.148 of the Act shall issued for the relevant assessment year, if three years but not more than ten years have elapsed from the end of relevant assessment year, unless the AO has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rs. 50,00,000/- or more. In other words, assessment after three years cannot be reopened, if the amount that has escaped assessment is less than Rs.50,00,000/-. In the instant case, it is evident from the records that the assessment has been reopened on wrong recording of facts while passing the order u/s.148A(d) of the Act. The transaction of Rs.26,20,000/- was counted twice to reach the figure of more than Rs.50,00,000/-. The AO has admitted this fact. Thus, the notice issued u/s.148 of the Act is without jurisdiction, hence, quashed. Consequently, the proceedings arising from invalid notice are vitiated and are liable to be quashed.
(A.Ys.2015-16) 8. In the result, impugned assessment order is quashed being without jurisdiction and appeal of the assessee is allowed. Order pronounced in the open court on Thursday the 27th day of November, 2025. Sd/- Sd/- (M. BALAGANESH) (VIKAS AWASTHY) लेखाकार सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER िद�ी/Delhi, �दनांक/Dated 28/11/2025 NV/- �ितिलिप अ�ेिषतCopy of the Order forwarded to : अपीलाथ�/The Appellant , 1. �ितवादी/ The Respondent. 2.