Snehil Maroo Vs ITO (ITAT Jodhpur)
Reopening After Three Years for ₹2 Lakh Political Donation Invalid: Jodhpur ITAT
The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) has quashed reassessment proceedings concerning a ₹2 lakh political donation, holding that the notice under Section 148 was issued beyond the prescribed three-year period and the alleged escaped income was below ₹50 lakh.
In Snehil Maroo v. ITO, Ward 2(1), Udaipur, ITA No. 662/Jodh/2026, pronounced on 4 November 2026, the Tribunal allowed the assessee’s appeal for Assessment Year 2019-20 on legal grounds.
The Tribunal did not examine the merits of the political donation deduction or the separate grievance concerning TDS credit of ₹43,773, as those issues became academic after the reassessment was quashed.
Background: Donation to Political Party Triggered Reopening
The assessee filed his return for AY 2019-20 on 21 July 2019, declaring total income of ₹7,45,420.
The return included a deduction of ₹2 lakh under Section 80GGC for a donation to Rastriya Samajwadi Party (Secular).
The Department subsequently received information arising from a search concerning registered unrecognised political parties, including the recipient party.
According to the allegations recorded in the order, donations received by the party were layered through bank accounts of dummy concerns and ultimately returned to the original donors, mainly in cash.
The Department considered the assessee a beneficiary of the alleged arrangement because he had donated to the party. It consequently initiated reassessment proceedings under Sections 147 and 148.
Donation Deduction Disallowed in Reassessment
Following the reassessment proceedings, the Assessing Officer disallowed the ₹2 lakh deduction claimed under Section 80GGC.
The assessee also complained that credit for tax deducted at source amounting to ₹43,773 had not been granted.
He challenged the assessment before the CIT(A), National Faceless Appeal Centre, which dismissed his appeal through an order dated 20 February 2026.
The assessee then approached the Tribunal, questioning the validity of the reopening itself, apart from the adverse treatment in the reassessment.
Assessee Challenged Statutory Preconditions
Before the ITAT, the assessee argued that the proceedings failed to satisfy the statutory requirements governing reassessment.
He also objected that notices under Sections 148 and 148A had been issued by the jurisdictional Assessing Officer rather than through the faceless mechanism contemplated by Section 151A read with Section 144B.
According to him, an invalid initiation would render the consequential assessment unsustainable.
The Departmental Representative relied on the orders of the lower authorities.
The Tribunal examined the limitation provisions and the dates relevant to the reopening.
Section 149 Required Higher Threshold Beyond Three Years
The Tribunal referred to Section 149(1), as applicable to the proceedings.
Under the ordinary limitation provision, a Section 148 notice could not be issued after three years from the end of the relevant assessment year unless the case satisfied the conditions for the extended period.
The extended-period provision required books, documents or evidence revealing escaped income of ₹50 lakh or more, represented in the forms specified in the statute.
The Tribunal also noted the requirements concerning information suggesting escapement of income and prior approval from the specified authority.
The existence of information about an allegedly improper deduction therefore had to be considered alongside the separate statutory restrictions on reopening.
Notice Dated 17 April 2023 Was Beyond Ordinary Limitation
The crucial notice under Section 148 was issued on 17 April 2023 by the Income Tax Officer, Ward 2(1), Udaipur.
For AY 2019-20, the Tribunal treated 31 March 2023 as the end of the ordinary three-year period.
The notice was therefore issued after that period had expired.
Further, the income alleged to have escaped assessment was below ₹50 lakh. The Tribunal consequently held that the reopening did not satisfy the statutory conditions permitting action beyond three years.
These findings formed the central basis for invalidating the reassessment.
Earlier Tribunal Decisions Supported the Conclusion
The assessee relied on ITO v. Mayank Khandelwal, ITA No. 381/JPR/2026, decided by the Jaipur Bench on 25 August 2026.
The Tribunal referred to that decision concerning reopening for AY 2019-20 beyond three years where the alleged escaped income was below ₹50 lakh.
The assessee also cited Sachin Madhukar Fegde v. DCIT, ITA No. 4596/MUM/2026, decided on 21 August 2026, dealing with approval requirements for reopening beyond three years.
Following the cited precedents and maintaining judicial consistency, the Tribunal held the reassessment contrary to law.
Reassessment Quashed; Remaining Grounds Left Open
The ITAT allowed the legal grounds and quashed the reassessment. The assessee’s appeal was accordingly allowed.
The ruling demonstrates that information suggesting a bogus donation does not dispense with mandatory reopening conditions. Limitation and the applicable escaped-income threshold remain essential to valid jurisdiction.
The Tribunal’s decision did not establish the genuineness of the donation or separately resolve the faceless-notice objection. Its operative conclusion rested on the belated notice and the amount involved.
Cases Discussed
- ITO Vs Mayank Khandelwal (ITAT Jaipur); ITA No. 381/JPR/2026; 25/08/2026; AY 2019-20. Relied upon concerning reassessment beyond the three-year limitation period where alleged escaped income was below ₹50 lakh. The Tribunal followed the coordinate-bench reasoning concerning the validity of the Section 148 notice.
- Sachin Madhukar Fegde Vs DCIT, Circle-1 (ITAT Mumbai); ITA No. 4596/MUM/2026; 21/08/2026; AY 2019-20. Cited concerning the statutory requirement to obtain approval from the specified authority under Section 151(ii) for reopening beyond three years.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT JODHPUR
The appellant, Snehil Maroo, an individual, filed return of income for AY 2019-20 on 21-07-2019, declaring total income of Rs. 7,45,420/- and thereafter, on the basis of information available with department regarding payment of donation to Rastriya Samajwadi Party (Secular), the case was reopened u/s 147/148 of the Income Tax Act (in short referred as ‘the Act’). Search was conducted u/s 132 of the Act, in the case of Registered Unrecognised Political Party (RUPP) including Rastriya Samajwadi Party (Secular) and during above proceedings, it was established that Rastriya Samajwadi Party (Secular) received funds in the form of donation, which are layered by routing through bank accounts of various dummy concerns and finally returned to the original donor mainly in the form of cash. It was considered that the appellant is also beneficiary of the transaction, being one of the donor to such RUPP and as such, his income chageable to tax has escaped assessement in terms of section 147 of the Act, accordingly, statutory notices u/s 142(1) and 143(2) of the Act issued time to time and after competion of assessment proceedings, the Learned AO disallowed the deduction of Rs. 2,00,000/- claimed u/s 80GGC of the Act as donation to Rastriya Samajwadi Party (Secular) and not given credit of tax deducted at source amounting to Rs. 43,773/-, which was assailed before the National Faceless Appeal Centre, Delhi (for the sake of convenience, hereinafter referred as ‘Learned CIT(A)’), who declined to accept the plea of the appellant, vide impugned order dated 20-02-2026 and on being dissatisfied with the same, the appellant before us.
2. Heard rival submissions and carefully scanned the material available on record.
3. Reiterating the grounds of appeal, the Learned AR submitted that the first appellate authority erroneously declined to appreciate that the issuance of notice u/s 148 of the Act and reopening of assessment quite invalid as not being satisfying the statutory pre-conditions and also that notice u/s 148 and 148A of the Act, were required to be issued through faceless assessment centre as per the provisions of section 144B read with section 151A of the Act, but were issued by the Jurisdictional Assessing Officer (JAO), which is procedurally invalid as per established legal position and as such when the initiation itself is procedurally invalid, all consequential orders including assessment order remains void ab initio.
4, Per Contra, the Learned DR relied upon orders passed by both lower authorities.
5. Section 149(1) of the Act says that no notice u/s 148 of the Act shall be issued for the relevant assessment year, (a) if three years have elapsed from the end of the relevant AY, unless the case falls under clause (b) and in clause (b), if three years, but not more than 10 years, have elapsed from the end of the relevant AY unless the Learned AO has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax represented in the form of asset, expenditure in respect of a transaction or in relation to an event or occasion or an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakhs or more. Likewise, as per section 148 of the Act, no notice under this section shall be issued unless there is information with the Learned AO, which suggests that the income chargeable to tax has escaped assessment in the case of assessee for the relevant AY and the Learned AO obtained prior approval of the specified authority to issue such notice.
6. We noticed that this matter is related with AY 2019-20, in which notice u/s 148 of the Act was issued by the Income Tax Officer Ward 2(1), Udaipur on 17-04-2023 and in this regard, it is submitted on behalf of the appellant that as matters pertains to AY 2019-20, than it was required to issue the notice of reopening only upto 31-03-2023 and as per section 149(1) of the Act, three years already been elapsed on 17-04-2023 and also the reopening notice was given by the Income Tax Officer Ward 2(1) Udaipur, who was not specified authority to issue notice or initiate the reopening proceedings u/s 148 of the Act.
7. In this regard, the Learned AR placed reliance upon order dated 25-08-2026, passed by co-ordinate bench of Jaipur in ITA 381/JPR/2026, AY 2019-20, titled as ITO versus Mayank Khandelwal, in which held that where reopening was resorted to on the basis of information procured during search conducted on third party and the notice u/s 148A of the Act was to be considered on a standalone basis, de hors the earlier notice issued u/s 148A of the Act, as notice issued u/s 148 of the Act on 17-04-2023 was beyond three years from the end of the relevant AY 2019-20 and income escaping assessment being less than Rs. 50 lakhs, accordingly, the notice u/s 148 of the Act, being the jurisdictional notice for framing assessment u/s 147 of the Act was issued beyond the period prescribed u/s 148(1)(a) of the Act and assessment order passed by the Learned AO not sustainable in the eye of law.
8. Likewise, also placed reliance upon order dated 21-08-2026, of co-ordinate bench in ITA 4596/MUM/2026 AY 2019-20, titled as Sachin Madhukar Fegde v/s DCIT, Circle -1., in which, the approval for reopening of assessment had been granted beyond a period of three years from the end of the relevant AY, not by Principal Chief Commissioner of Income Tax as mandated under the provisions of section 151(ii) of the Act, accordingly, held that such notice is bad in law, reassessment framed is void ab initio and liable to be quashed.
9. In case in hand, the matter pertains to AY 2019-20, income escaping assessment less than Rs. 50 lakhs, in which notice u/s 148 of the Act was issued on 17-04-2023, beyond the period prescribed in law as aforesaid, consequently, in view of the foregoing fact situation and to maintain judicial consistency, by following the judicial precedents cited supra, we hold that the reassessment framed u/s 147 of the Act quite contrary to law, unsustainable in the eye of law and accordingly, the reassessment framed for 2019-20 u/s 147 read with section 144 of the Act, deserves to be quashed, by allowing legal grounds raised by the appellant. Since we allowed the same as above, other grounds raised are not being adjudicated as acadamic in nature.
10. Consequently, this appeal is hereby allowed as indicated above.
Order pronounced on 04/11/2026 in Open Court
