Dilip Laximan Powar Vs ITO (Bombay High Court)
In the case of Dilip Laximan Powar vs. Income Tax Officer, the Bombay High Court addressed the validity of a notice issued under Sec-tion 148-A(b) of the Income Tax Act, 1961. The petitioner, represented by his wife due to his medical condition, challenged the notice dated 19.03.2024 on grounds that it was issued beyond the permissible time frame and relied on an audit objection that did not reveal new facts. The petitioner, who operates a retail hardware and paint business in Goa, had filed returns for the Assessment Year 2017–18, which were accepted through a scrutiny as-sessment concluded on 31.12.2019 under Section 143(3). However, in 2024, a notice was issued alleging that income had escaped assessment, citing discrepancies related to the cash deposited during the demonetization period.
The income tax department argued that a cash deposit of ₹71.81 lakh during demonetiza-tion was not adequately explained in view of a cash balance of ₹6.3 lakh recorded as on 08.11.2016. They stated that the reassessment proceedings were valid under the amended provisions of Sections 147 to 149 effective from 01.04.2021, which recognize audit objec-tions as “information” permitting reassessment beyond three years if the income involved exceeds ₹50 lakh. Despite receiving the petitioner’s response contesting the notice on these legal grounds, the department proceeded under Section 148-A(d) to reopen the as-sessment.
