Trishladevi Mukesh Jain Vs ITO (ITAT Mumbai)
In this case, the ITAT Mumbai quashed reassessment proceedings initiated under Section 147/148 on the ground of limitation under Section 149(1)(b).
The Tribunal noted that the notice u/s 148 was issued on 13.07.2022 for A.Y. 2017–18, i.e., beyond the normal 3-year limitation period. For such extended reopening (up to 10 years), the law mandates that the alleged escaped income must be ₹50 lakh or more.
However, in the present case, the entire basis of reopening was an alleged unexplained expenditure of only ₹6 lakh, which is far below the statutory threshold. The Tribunal held that the Revenue failed to satisfy the jurisdictional condition required for extended limitation.
It was therefore held that:
- Notice issued beyond 3 years without meeting ₹50 lakh threshold is invalid
- Such defect goes to the root of jurisdiction
- Once notice is invalid, entire reassessment collapses
Accordingly, the reassessment was declared void ab initio, and the Tribunal did not go into merits of the addition.
Final Outcome:
- Reopening u/s 147/148 quashed
- Entire assessment set aside
- Assessee’s appeal allowed
This ruling is a strong precedent that post Finance Act 2021, extended reopening strictly requires ₹50 lakh escapement-anything less is fatal to jurisdiction.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against order dated 30.09.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming reopening of assessment u/s 147 of Income Tax Act, 1961 which is bad-in-law and required to be quashed
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming reopening of assessment without considering the fact that the proceedings for AY 2017–18 are time barred as per section 149(1)(b) of Income Tax Act. 1961
3. On the facts and circumstances of the case and law, the Ld CIT(A) erred in confirming reopening of assessment without considering the fact that the notice for reopening u/s 148 was issued by Jurisdictional assessing oficer which is in violation of Faceless Assessment Scheme formulated under section 151A of Income Tax Act, 1961
4. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming issue of notice u/s 148 without considering the fact that the notice issued without mentioning DIN number on notice which is in violation of CBDT Circular No. 19 of 2019 dated 08.2019
5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming issue of notice u/s 148 without obtaining proper approval from appropriate authority under section 151 of Income Tax Act, 1961
6. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition of 6,00,000/- u/s 69A of the Income Tax Act, 1961 for the cash payment made to M/s Shivam Autozone (India) Pvt Ltd for purchase of Car without considering the fact that the cash was paid from the available cash balance as on 01.11.2016.
7. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in levying tax under the provisions of section 115BBE of Income Tax act, 1961 on addition made under section 69A of Income Tax Act, 1961
8. On the facts and circumstances of the case and law, the L CIT(A) erred in levying penalty u/s 271AAC(1) of Income Tax Act, 1961
9. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in charging interest u/s 234B of Income Tax Act, 1961.
2. The Assessee has raised multiple grounds challenging both the jurisdictional validity of the reassessment and the substantive addition of ₹6,00,000/ – made under Section 69A of the Income -tax Act, 1961 (‘the Act’).
