Adilakshmi Vangala Vs ITO (ITAT Hyderabad)
The Hyderabad ITAT quashed reassessment proceedings holding that incorrect or non-existent facts cannot be used to extend limitation under Section 149.
The Assessing Officer reopened the case alleging cash deposits exceeding ₹50 lakh based on multiple transactions. However, upon verification , the Tribunal found that actual deposits were only ₹38.10 lakh, with other transactions being unrelated or wrongly considered.
Since the escaped income was below ₹50 lakh, the applicable limitation under Section 149(1)(b) was 3 years, whereas the notice under Section 148 was issued beyond this period. The ITAT emphasized that limitation must be tested on correct facts, not on assumed or unverified data.
Relying on High Court precedents, the Tribunal held that such reopening is time-barred and invalid, thereby quashing the notice under Section 148 and the entire reassessment proceedings.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal by the Assessee is directed against the Order dated 15.10.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2016-2017.
2. The assessee has raised the following grounds of appeal:
1. “In the facts and circumstances of the case, the order of the CIT(A) is not sustainable on facts or in law.
2. In the facts and circumstance of the case, the Ld. CIT(A) ought to have considered that the notice was not issued in a faceless manner rendering the entire proceedings invalid as held by the jurisdictional High Court and also this Honorable Tribunal.
3. In the facts and circumstance of the case, the respected CIT(A) ought to have considered that the notice u/s 148 is bad in law in as much as the notice was issued in violation of provisions of section 149(2), and consequently the assessment order is not sustainable. 4. In the facts and circumstance of the case, the CIT(A) ought to have considered that the sources for cash deposits are from her son and delete the addition made. 5. In the facts and circumstance of the case, the CIT(A) ought to have considered that the provisions of section 69A are not attracted. 6. The appellant may be permitted to add, delete, amend any ground with leave of the Honourable Tribunal.”
3. In Ground nos.1 to 3 the assessee has challenged the validity of the notice issued by the Assessing Officer u/sec.148 of the Act being barred by limitation.
