Exel Rubber (P) Ltd Vs DCIT (ITAT Hyderabad)
Reopening U/s 148 Quashed – Seized Laptop Data from Third Person & Failure to Satisfy s.149(1)(b) Conditions Held Fatal – ITAT Hyderabad
A search u/s 132 in Exel Rubber Group led to seizure of a laptop from the residence of the group’s Accounts Manager containing “Focus 5.5” software with alleged unaccounted cash transactions. Based on this material, the AO issued notice u/s 148 beyond three years and made additions towards undisclosed business receipts, adjustment purchases and unexplained money u/s 69A. CIT(A) partly sustained the action.
Before ITAT, the assessee challenged validity of reopening, contending that the seized material was found from a third person under a separate warrant, mandatory approvals and jurisdictional satisfaction were absent, and conditions of s.149(1)(b) were not fulfilled since escaped income was not shown as asset/entry exceeding ₹50 lakh. The Tribunal noted inconsistencies in quantification of alleged undisclosed income, inability of AO to attribute transactions entity-wise, and mechanical recording of reasons. Following coordinate bench decisions in group cases, ITAT held that reopening lacked jurisdictional foundation and quashed notice u/s 148 along with consequential reassessment order, without adjudicating merits of additions. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by the assessee is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-11 Hyderabad, dated 11/10/2025 for the A.Y 2014-15.




