Ashok Narayan Satav Vs ITO (ITAT Pune)
Reassessment Beyond 3 Years for ₹8 Lakh Addition? – ITAT Questions Validity of Section 148 Notice
The Pune ITAT raised serious doubts on the validity of reassessment proceedings initiated beyond three years where the alleged escaped income was only ₹8 lakh, and remanded the matter back to the CIT(A) for fresh adjudication after proper verification of jurisdictional facts.
In this case, the assessee had originally filed the return declaring income of about ₹2.13 lakh. Subsequently, based on information that the assessee had allegedly paid ₹8 lakh to another person, the AO initiated reassessment proceedings u/s 148A and later passed an order u/s 147 r.w.s. 144 making addition of ₹8 lakh u/s 69C as unexplained expenditure taxable u/s 115BBE.
The CIT(A) dismissed the appeal primarily on the ground that the assessee did not respond to notices and mechanically confirmed the addition. However, the Tribunal observed that the appellate authority had failed to examine the most crucial jurisdictional issue — whether reassessment notice issued on 08.07.2022 for AY 2017-18 was legally sustainable when the alleged escapement was apparently less than ₹50 lakh.
The ITAT specifically observed that if escaped income is below ₹50 lakh, reopening beyond three years may not be maintainable, yet neither the Department nor the assessee had produced the basic documents like notice u/s 148A(b) and order u/s 148A(d) for proper verification.
Accordingly, the Tribunal set aside the order of the CIT(A) and directed fresh adjudication after calling for all jurisdictional records and after granting proper opportunity to the assessee. The ITAT also reiterated that the CIT(A) is duty-bound to decide each ground on merits and cannot dismiss appeals mechanically for non-compliance
FULL TEXT OF THE ORDER OF ITAT PUNE
