Bannari Amman Fresh Fruit Vs ITO (ITAT Chennai)
The ITAT Chennai quashed the reassessment proceedings initiated under Section 148, holding that the notice issued beyond 3 years is invalid where the alleged escaped income is less than ₹50 lakhs.
In this case, the assessee, engaged in retail trading of fruits and vegetables, faced reassessment based on cash deposits during the demonetisation period. The Assessing Officer issued notice under Section 148 on 30.07.2022 for AY 2017–18 and made additions under Section 68. However, the assessee challenged the reopening on legal grounds.
The Tribunal examined the amended provisions of Section 149 and relied heavily on the Supreme Court ruling in Union of India vs. Rajeev Bansal and Ashish Agarwal. It was reiterated that under the new reassessment regime, reopening beyond 3 years is permissible only if escaped income exceeds ₹50 lakhs.
Since in the present case the escaped income was admittedly below ₹50 lakhs, the Tribunal held that the notice issued beyond 3 years was time-barred and bad in law. Consequently, the entire reassessment proceedings were quashed.
Other grounds, including approval under Section 151 and merits of addition, were left open as academic.
Accordingly, the appeal of the assessee was allowed on legal grounds, reinforcing strict adherence to limitation under the new reassessment regime.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
