Veera Hanuman Filling Station Vs ITO (ITAT Hyderabad)
Reassessment Held Invalid Because First Proviso to Section 149 Barred Fresh Notice; Section 148 Notice Set Aside Because Amended Ten-Year Period Could Not Revive Time-Barred Case; Assessment Order Quashed Because Reopening Notice Was Issued Beyond Six-Year Deadline; ITAT Allows Appeal Because Time-Barred Reassessment Cannot Be Sustained Under New Regime; Reopening Proceedings Cancelled Because Limitation Under Old Law Had Already Expired.
The appeal before the Income Tax Appellate Tribunal, Hyderabad, arose from the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 25.11.2025 for Assessment Year 2015-16. The assessee, a partnership firm engaged in the retail trade of petroleum products, had not filed a return of income under Section 139(1) of the Income-tax Act. Based on information available on the Income-tax Department’s Insight Portal, it was found that the assessee had made cash deposits of ₹1,51,90,970 in its bank account during the relevant year. Consequently, the assessment was reopened under Section 147, and a notice under Section 148 dated 23.04.2022 was issued.
Subsequently, notices under Section 142(1) were issued seeking details regarding the source of the cash deposits. The assessee explained that it was operating a petrol pump business, had incurred substantial losses due to inexperience, and had therefore not filed a return of income. It further stated that the cash deposits represented proceeds from the sale of petroleum products and furnished relevant details. After considering the submissions, the Assessing Officer observed that the assessee had reported total sales of ₹3,65,01,000. Referring to dealer commission rates for petrol and diesel and calculating an average commission of 3.4%, the Assessing Officer estimated net profit at 3.4% of total turnover and determined business income at ₹12,41,034. Assessment was completed under Sections 147, 144 and 144B of the Act.
