Shikha Kedia Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Quashes Reassessment as Mere “Change of Opinion”: AO Cannot Reopen Scrutiny Assessment on Same Material Merely Because Audit Raises an Objection
The Hyderabad Bench of the Income Tax Appellate Tribunal, SMC-Bench, in ITA No. 178/HYD/2026 for AY 2017-18, allowed the assessee’s appeal against the order dated 30.09.2025 of the CIT(A)-NFAC.
Original Scrutiny Assessment and Cash Deposits
The assessee had originally filed her return on 06.11.2017 declaring total income of ₹3,54,300. Her case was selected for scrutiny under CASS because of cash deposits during the demonetisation period, and assessment under Section 143(3) was completed on 26.12.2019 at ₹4,02,100.
During the scrutiny assessment, the assessee explained the source of the bank deposits as gifts and furnished confirmations from the persons concerned, which were accepted by the Assessing Officer.
Reopening of Assessment Under Section 148
The assessment was subsequently reopened under Section 148. In the reasons recorded on 25.03.2021, the Assessing Officer referred to the difference in the capital account balances between AY 2016-17 and AY 2017-18 and proposed to treat the increase as unexplained cash credit.
The assessee contended that the reopening was based on the same facts, books of account and documents already examined during the original scrutiny assessment and was therefore a change of opinion.
She also pointed to an audit objection dated 22.07.2020, discrepancies concerning the dates of recording reasons and approval under Section 151, and the fact that the Section 148 notice was sent by speed post on 06.04.2021.
