Siva Madhavi Garapati Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Upholds Reopening Beyond 3 Years Though Final Addition Fell Below ₹50 Lakhs – Jurisdiction Tested on Information Available at Reopening Stage
The Hyderabad ITAT held that validity of reopening u/s 148 must be tested based on the material available with the Assessing Officer at the stage of initiation of reassessment proceedings and not on the basis of the final additions ultimately made in the assessment order.
In this case, the assessee argued that since the final surviving addition was only ₹10.08 lakh cash deposits, reopening beyond three years was invalid as escaped income ultimately assessed was below ₹50 lakh. However, the Tribunal rejected this contention noting that, at the reopening stage, the AO possessed information regarding property investment of ₹1.10 crore along with cash deposits, thereby indicating escapement exceeding ₹50 lakh. Mere acceptance of the assessee’s explanation later regarding property investment would not invalidate the jurisdiction already assumed.
On merits, the Tribunal found that the assessee failed to substantiate claims that cash deposits arose from consultancy receipts or funds received from her husband. However, taking a pragmatic view, the ITAT granted partial relief by accepting ₹2.50 lakh as available cash in hand from accumulated savings and incidental receipts, while sustaining the balance addition of ₹7.58 lakh.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
