Hemendra Agarwal Vs DCIT (ITAT Agra)
A Time-Barred Reassessment Cannot Be Revived Through Section 263: ITAT Quashes Revision
An Invalid Foundation Defeats the Revision
The Agra Tribunal quashed a revision order under Section 263 after finding that the reassessment sought to be revised was founded on a time-barred Section 148 notice.
Applying the Supreme Court’s decision in Union of India v. Rajeev Bansal, 469 ITR 46, the Tribunal held that the notice had been issued after expiry of the surviving limitation period. The consequential reassessment was therefore invalid and could not provide a lawful foundation for revision.
The ruling also recognises an important procedural principle: the jurisdictional validity of the underlying assessment may be challenged in an appeal against the subsequent Section 263 order. The assessee was not confined to arguing whether the AO had adequately examined the cash deposits.
Cash Deposits Were Accepted in Reassessment
The proceedings concerned substantial transactions in the assessee’s savings account with United Bank of India. The information initially relied upon referred to cash deposits of ₹12,26,58,051, accompanied by substantial withdrawals.
During reassessment, the assessee explained that the actual cash deposits were ₹2,00,30,000. He stated that unsecured loans had been obtained and cash withdrawn for a proposed purpose. Since that purpose did not materialise, the cash was redeposited and the loans repaid within the same financial year.
