Jubedaben Mahebubbhai Momin Vs ITO (ITAT Ahmedabad)
Reassessment Limitation and ₹50 Lakh Threshold Require Examination: ITAT Remands Case
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored an assessee’s case to the Assessing Officer for examination of objections challenging the validity of reassessment proceedings. The objections concerned limitation for issuing notice under Section 148, alleged non-service of notice under Section 148A(b), and satisfaction of the ₹50 lakh monetary threshold under Section 149(1)(b) of the Income-tax Act, 1961.
The Tribunal admitted the assessee’s modified and amplified additional ground, holding that it raised a legal issue concerning jurisdiction on the basis of facts already available in the assessment record. The appeal was allowed for statistical purposes.
Duplicated property information led to reassessment
The assessee had not filed a return for the relevant year, stating that her total income did not exceed the basic exemption limit. Reassessment proceedings were initiated on information alleging that she had purchased land at Sanand, Ahmedabad, for ₹1,52,25,120 and made cash deposits of ₹4 lakh.
During the proceedings, she explained that the property information had been duplicated. The actual aggregate purchase consideration was ₹76,12,560, and her share in the properties was only one-third. Consequently, the consideration attributable to her was ₹25,37,520.
The Assessing Officer accepted both the duplication in the information and the assessee’s one-third ownership share. However, he found the source of investment unsatisfactorily explained and made an addition of ₹26,61,658 under Section 69 towards the investment and stamp duty.
The assessee also explained that the cash deposits of ₹4 lakh arose from agricultural activities. The Assessing Officer rejected this explanation and separately added that amount under Section 69. The assessment was completed under Section 147 read with Section 144 on 15 March 2023.
The CIT(A) dismissed the assessee’s appeal for non-compliance after she failed to respond to three appellate notices.
Assessee challenged limitation, service and monetary threshold
Before the Tribunal, the assessee amplified her challenge to the validity of the Section 148 notice.
She contended that the notice was digitally signed on 1 April 2022 at 5:03 p.m. and was therefore beyond the six-year period relevant to her objection under the first proviso to Section 149(1)(b).
She further alleged that the notice under Section 148A(b), dated 19 March 2022, had never been served. According to her, the mandatory opportunity of being heard before issuance of the Section 148 notice had consequently not been provided.
The assessee also argued that, after correcting the duplicated property information and considering her actual ownership share, the alleged escaped income did not amount to or exceed ₹50 lakh. She therefore challenged reopening beyond three years and contended that the notice had been issued mechanically.
Additional legal ground admitted
The assessee’s representative submitted that the additional ground went to the root of the assessment’s validity and did not require investigation into fresh facts.
Relying on the Supreme Court’s decision in *National Thermal Power Co. Ltd. v. CIT*, 229 ITR 383, the Tribunal observed that a legal question arising from facts already on record could be raised before it for the first time where adjudication did not require investigation into fresh facts.
The Tribunal found that the dates and nature of the reassessment notices and the issuing authority were matters borne out by the assessment record. It accordingly admitted the modified and amplified additional ground.
Assessing Officer to examine reassessment objections
The Tribunal held that the objections concerning limitation, non-service of the Section 148A(b) notice and the statutory monetary threshold required examination by the Assessing Officer with reference to the Revenue’s records.
It therefore set aside the matter to the Assessing Officer and allowed the appeal for statistical purposes. The Tribunal did not finally hold the reassessment notice invalid or decide the disputed additions on merits.
Cases Discussed
- National Thermal Power Co. Ltd. v. CIT — (1998) 229 ITR 383 (SC). (Related TaxGuru coverage; not an exact judgment link.)
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT AHMEDABAD
Delay Condoned.
This appeal has been filed by the Assessee against the order dated 24.01.2025 passed by the National Faceless Appeal Centre(NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2015-16.
2. The Assessee has raised the following grounds of Appeal: –
1. Whether, on facts and in circumstances of the case and in law, Ld.CIT(A) has erred in confirming the addition made for unexplained investment u/s.69 of the act amounting to Rs.26,61,658/-.
2. Whether, on facts and circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition made for cash deposits u/s.69 of the act amounting to Rs.4,00,000/-.
3. Whether, on facts and in circumstances of the case and in law, Ld.AO erred in issuing notice u/s.148 of the act.
2.1 The revised grounds of appeal are as under:
1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition made for unexplained investments u/s. 69 of the act amounting to Rs.26,61,658/-?
2. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition made for cash deposits u/s. 69 of the act amounting to Rs. 4,00,000/-?
3. The notice u/s 148 of the Act is digitally signed on 01-04-2022 (17:03 PM) and therefore, the same is issued beyond the period of six years for the purpose of first proviso to section 149(1)(b) and hence, the said notice is barred by limitation.
4. The notice issued u/s 148 of the Act dated 30-03-2023 is timed barred and invalid for the reason that, having regard to the actual share of appellant in the property purchased as well as duplication of information with the department which has been duly accepted by the AO in the Assessment Order, the income escaped for the year under consideration cannot be said to amount to or exceed Rs. 50,00,000/-.
5. The notice u/s 148A(b) of the Act dated 19-03-2022 was never served on the appellant and therefore, the mandatory opportunity to be heard under that provision prior to issuing of notice u/s 148 of the Act was never accorded to appellant and accordingly, the notice issued u/s 148 of the Act in such a manner is invalid in law.
3. During the course of proceedings before the Tribunal, the assessee has also filed an application for admission of modified and amplified additional ground of appeal which read as follows:-
1. Appellant has e-filed form 36 wherein she has raised the following grounds of appeal:
1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition made for unexplained investments u/s. 69 of the act amounting to Rs.26,61,658/-?
2. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming the addition made for cash deposits u/s. 69 of the act amounting to Rs. 4,00,000/-?
3. Whether, on facts and in circumstances of the case and in law, Ld. AO erred in issuing notice u/s. 148 of the act?
2. By virtue of the Ground of Appeal No. 3 as raised in Form 36, the appellant, in her submission filed before your Honour, challenged the validity of the notice issued u/s 148 of the Act on following reasons: Reason 1: The notice u/s 148 of the Act is digitally signed on 01-04-2022 (17:03 PM) and therefore, the same is issued beyond the period of six years for the purpose of first proviso to section 149(1)(b) and hence, the said notice is barred by limitation.
Reason 2 The notice u/s 148A(b) of the Act dated 19-03-2022 was never served on the appellant and therefore, the mandatory opportunity to be heard under that provision prior to issuing of notice u/s 148 of the Act was never accorded to appellant. Notice issued u/s 148 of the Act in such a manner is invalid in law.
Reason 3: (i) Having regard to the actual share of appellant in the purchased property as well as duplication of information with the department which has duly been accepted by the Ld. AO in the Assessment Order, the income escaped for the year under consideration cannot be said to amount to or exceed Rs. 50,00,000/- and therefore, the notice issued u/s 148 of the Act beyond the period of 3 years is barred by limitation. (ii) Notice u/s 148 has been mechanically issued.
4. The Ld. AR, appearing for the assessee, submitted that the additional ground is purely legal in nature, goes to the root of the validity of the assessment proceedings and does not require investigation into any fresh facts.
5. Heard both the parties on this issue and perused the material available on record.
6. Considering the application for admission of the additional ground. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT, 229 ITR 383 (SC), has held that a question of law arising from the facts which are already on record can be raised before the Tribunal for the first time, provided its adjudication does not require investigation into fresh facts. In the present case, the additional ground challenges the very jurisdiction and validity of the reassessment proceedings. The facts relied upon by the assessee, including the dates and nature of notices issued during the reassessment proceedings and the authority from whom such notices were issued, are borne out from the assessment record. The issue sought to be raised is therefore a legal issue arising from the existing record. We, therefore, admit the modified and amplified additional ground for adjudication.
7. The brief facts of the case are that the appellant did not file a return of income for the year under consideration, as her total income did not exceed the basic exemption limit. Subsequently, proceedings under section 148 of the Act were initiated in her case on the basis of information alleging that she had purchased immovable properties, being lands situated at Survey No. 959, Sanand, Ahmedabad, vide Sale Deed Nos. 3740 and 3741, for a consideration of ₹1,52,25,120/- and had also made cash deposits of ₹4,00,000/- during the year under consideration.
7.1 During the course of proceedings under section 148 of the Act, the appellant submitted that she had not purchased the said properties for a consideration of ₹1,52,25,120/-. It was explained that the said amount represented duplication in the information available with the Department and that the actual purchase consideration was ₹76,12,560/-. It was further submitted that the appellant’s share in the said properties was only 1/3rd and, accordingly, the actual consideration paid by her towards the purchase of the properties was ₹25,37,520/-. The appellant also explained the source and manner of payment of the said consideration. With regard to the cash deposits of ₹4,00,000/-, it was submitted that the same were out of agricultural activities carried out by the appellant.
7.2 The Assessing Officer accepted the appellant’s contention regarding the duplication of the purchase consideration in the information available with the Department as well as her 1/3rd share in the properties. Accordingly, the Assessing Officer accepted that the appellant had paid purchase consideration of ₹25,37,520/- only. However, holding that the source of the said investment had not been satisfactorily explained, the Assessing Officer made an addition of ₹25,37,520/- towards unexplained investment and ₹1,24,339/- towards stamp duty, aggregating to ₹26,61,658/-, under section 69 of the Act. The assessment was completed under section 147 read with section 144 of the Act vide order dated 15.03.2023. Further, the explanation furnished by the appellant regarding the cash deposits of ₹4,00,000/- was not accepted and the same was also added to her income under section 69 of the Act.
8. Aggrieved by the aforesaid assessment order, the appellant preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), however, dismissed the appeal for non-compliance by the appellant, as no response was received from her in response to the three notices issued during the appellate proceedings.
9. We have considered the rival submissions and perused the material available on record. The assessee has challenged the validity of the notice issued under section 148 of the Act on various grounds, including limitation, non-service of notice under section 148A(b), and failure to satisfy the monetary threshold prescribed under section 149(1)(b) of the Act. Since these matters need to be examined at the level of Assessing Officer based on the facts of the record of the Revenue, the appeal is set-aside to the file of Assessing Officer.
10. In the result, the appeal of the assessee is allowed for statistical purposes.
The order pronounced in the open Court on 15.10.2026.
