Mohd Muslim Asgar Ali Mandawariya Vs ITO (ITAT Mumbai)
Reassessment Quashed: Co-owner’s Share Below ₹50 Lakh, Notice Held Time-Barred
The Mumbai ITAT quashed the reassessment proceedings against Mohd Muslim Asgar Ali Mandawariya for AY 2016-17, holding that the notice issued under section 148 was barred by limitation since the alleged escaped income was less than ₹50 lakh.
The case was reopened on the basis of information that the assessee had participated in the purchase of an immovable property valued at more than ₹50 lakh. During the proceedings under section 148A, the assessee explained that the property had been purchased jointly by three co-owners for a total cost of about ₹53.65 lakh, including stamp duty and registration charges, and that his individual share worked out to only ₹17.88 lakh. The assessee furnished supporting documents, including the property records, to substantiate this claim.
The Tribunal noted that the Assessing Officer did not dispute the fact that the assessee’s share in the property was only one-third and amounted to ₹17.88 lakh. Despite recording this fact, the AO proceeded to pass an order under section 148A(d) and issued notice under section 148. Ultimately, even the reassessment addition was restricted to ₹17.88 lakh.
The ITAT held that for AY 2016-17, where the reopening was sought beyond three years, the extended limitation under section 149 could be invoked only if the alleged escaped income exceeded ₹50 lakh. Since the Revenue itself accepted that the assessee’s alleged unexplained investment was only ₹17.88 lakh, the statutory condition for reopening beyond three years was not satisfied.
Accordingly, the Tribunal held that the notice under section 148 was invalid and that all subsequent proceedings founded on such notice were void ab initio. Having quashed the reassessment on the legal issue, the Tribunal treated the merits of the addition as academic and did not adjudicate them.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
