Chandan Bala Maroo Vs ITO (ITAT Jodhpur)
Reopening Beyond Three Years for Income Below ₹50 Lakh Invalid: Jodhpur ITAT
The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) has quashed a reassessment concerning a ₹2 lakh political donation, holding that the reopening notice was issued beyond the prescribed three-year period and the alleged escaped income was below ₹50 lakh.
In Chandan Bala Maroo v. ITO, Ward 2(1), Udaipur, ITA No. 251/Jodh/2026, pronounced on 4 November 2026, the Tribunal allowed the assessee’s legal challenge for Assessment Year 2019-20.
Having invalidated the reassessment, it left the remaining grounds unexamined. Consequently, the order does not decide whether the disputed donation was genuine or eligible for deduction under Section 80GGC.
Background: Political Donation Deduction Disallowed
The assessee filed the return for AY 2019-20 on 19 September 2019, declaring total income of ₹25,49,460.
The return included a claim for 100% deduction under Section 80GGC concerning a donation of ₹2 lakh to Rastriya Samajwadi Party (Secular).
The assessment was subsequently reopened on information alleging that the donation was bogus. According to the allegation recorded in the order, funds were routed through bank accounts of dummy concerns and ultimately returned to donors, mainly in cash.
A notice under Section 148 was issued on 12 April 2023.
The Assessing Officer completed reassessment at total income of ₹27,52,900, including disallowance of the ₹2 lakh deduction.
First Appeal Failed; Assessee Challenged Reopening
The assessee challenged the reassessment before the CIT(A), National Faceless Appeal Centre, but the appeal was dismissed.
Before the Tribunal, the assessee questioned whether the statutory conditions for reopening had been satisfied.
The arguments also included an objection that notices under Sections 148A and 148 should have been issued through the faceless mechanism, rather than by the jurisdictional Assessing Officer.
The assessee requested disposal of the appeal on the legal challenge to initiation of reassessment.
The Departmental Representative relied on the orders of the lower authorities.
Section 149 Limited Reopening After Three Years
The Tribunal examined Section 149(1) as relevant to the proceedings.
It noted that the ordinary limitation under Section 149(1)(a) prevented issuance of a Section 148 notice after three years from the end of the relevant assessment year, unless the case fell within the extended-period provision.
Under Section 149(1)(b), reopening beyond three years required satisfaction of the specified statutory conditions. These included possession of books, documents or evidence revealing escaped income of ₹50 lakh or more, represented in the forms contemplated by the provision.
The Tribunal also referred to the requirement for information suggesting escapement and prior approval from the specified authority.
Its analysis therefore addressed the statutory foundation necessary before reassessment could validly proceed.
Notice Was Issued After 31 March 2023
For AY 2019-20, the Tribunal identified 31 March 2023 as the end of the ordinary three-year period.
The notice in the assessee’s case was issued on 12 April 2023, after that date.
At the same time, the escaped income involved was below the ₹50 lakh threshold required for invoking the extended reopening period.
On these facts, the Tribunal concluded that the notice had been issued beyond the period permitted by law.
The modest amount involved was therefore significant to jurisdiction, rather than merely to the quantum of the eventual addition.
Tribunal Followed Decisions on Similar Reopening Notices
The assessee relied on ITO v. Mayank Khandelwal, ITA No. 381/JPR/2026, decided by the Jaipur Tribunal on 25 August 2026.
As described in the order, that decision concerned AY 2019-20 and a Section 148 notice issued on 12 April 2023, with alleged escaped income below ₹50 lakh.
The Tribunal also considered the assessee’s reliance on Sachin Madhukar Fegde v. DCIT, ITA No. 4596/MUM/2026, decided on 21 August 2026, concerning approval requirements for reopening beyond three years.
Following the cited precedents and seeking judicial consistency, the Jodhpur Bench held the reassessment unsustainable.
Reassessment Quashed on Legal Grounds
The Tribunal held that the reassessment under Section 147 was contrary to law and deserved to be quashed.
It allowed the assessee’s legal grounds and treated the other grounds as academic, without adjudicating them.
Although the assessee had advanced a separate objection regarding the faceless reassessment mechanism, the Tribunal’s operative conclusion focused on limitation and the escaped-income threshold. The decision should therefore not be presented as an independent ruling resolving every objection to issuance by the jurisdictional officer.
Significance of the Decision
The ruling demonstrates that allegations concerning a bogus deduction cannot substitute for compliance with mandatory reopening conditions.
In this case, the notice date and the amount of alleged escaped income defeated the reassessment at the jurisdictional stage. The appeal was allowed on that basis, while the merits of the Section 80GGC deduction remained undecided.
Cases Discussed
- ITO Vs Mayank Khandelwal (ITAT Jaipur); ITA No. 381/JPR/2026; 25/08/2026; AY 2019-20. The assessee relied upon this decision concerning a Section 148 notice dated 12 April 2023 issued beyond the three-year period where alleged escaped income was below ₹50 lakh. The Jodhpur Bench followed the coordinate-bench reasoning concerning limitation.
- Sachin Madhukar Fegde Vs DCIT, Circle-1 (ITAT Mumbai); ITA No. 4596/MUM/2026; 21/08/2026; AY 2019-20. Cited concerning the requirement that approval for reopening after three years must be obtained from the competent specified authority under Section 151(ii). The Tribunal relied upon the cited precedents in allowing the legal challenge.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT JODHPUR
The instant appeal, at the instance of the assessee, Chandan Bala Maroo, impugns the order dated 22.12.2025 u/s 143(3)/147 of the Income Tax Act, 1961 (in short referred as ‘the Act’), of the National Faceless Appeal Centre, Delhi [for the sake of convenience, hereinafter referred to as CIT(A)], whereby, appeal filed by the assessee/appellant was dismissed.
2. Facts of the case may be chronologically narrated as that the appellant, an individual, filed his return of income for the Assessment Year under consideration 2019-20 on 19.09.2019, by declaring total income of Rs. 25,49,460/-, which was processed u/s 143(3) of the Act. As per return as aforesaid, the appellant had made donation Rs. 2,00,000/- to a political party namely Rastriya Samajwadi Party (Secular) and claimed 100% deduction u/s 80GGC of the Act, which was later revealed as bogus donation and layered by routing through bank accounts of various dummy concerns and finally returned to the original donor mainly in the form of cash, formed main reason for reopen the assessment u/s 147 of the Act and accordingly, a notice u/s 148 of the Act was issued on dated 12-04-2023. The Learned AO, passed assessment order u/s 147 read with section 144B of the Act at the assessed income of Rs. 27,52,900/-, made addition of Rs. 2,00,000/- as disallowance of deduction claimed u/s 80GGC of the Act, which was assailed by way of appeal and the Learned CIT(A), dismissed the same and aggrieved upon so, the appellant before us.
3. Heard rival submissions and carefully scanned the material available on record.
4. Reiterating the grounds of appeal, the Learned AR submitted that the Learned CIT(A) 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 notice u/s 148A and 148 of the Act were required to be issued through the faceless assessment centre as per the provisions of Section 144B read with section 151A of Act, but were issued by the jurisdictional Assessing Officer (JAO), which is procedurally invalid as per established judicial precedents and as such when the initiation itself is procedurally invalid, all consequential orders including assessment order remains void ab initio and also submitted that appeal may be disposed of only this issue.
5. Per Contra, the Learned DR relied upon orders passed by both the lower authorities,
6. As per the provisions of Section 149(1) of the Act, 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 assessment year, 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 assessment year 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 an asset, expenditure in respect of a transaction or in relation to an event or occasion or an entry of entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees 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 assessement in the case of the assessee for the relevant AY and the Learned AO has obtained prior approval of the specified authority to issue such notice.
7. We noticed that this matter is related with A.Y. 2019-20 in which the notice u/s 148 of the Act was issued by the Income Tax Officer Ward 2(1), Udaipur on 12-04-2023. In this regard, it is submitted that as matter pertains to AY 2019-20, than it was required to issue the notice of reopening only upto 31st March, 2023 and as per Section 149(1)(a), three years already been elapsed on 12.04.2023 and also the reopening notice was given by Income Tax Officer Ward-2(1), who was not specified authority to issue notice or initiate the reopening proceedings u/s 148 of the Act.
8. In this regard, the Learned AR relied upon the order of the co-ordinate Bench of Jaipur tribunal passed in ITA No. 381/JPR/2026, AY 2019-20, titled as ITO Vs. Mayank Khandelwal, dated 25.08.2026, in which held that where reopening was resorted to on the basis of information procured during search conducted on a 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 12-04-2023 was beyond three years from the end of the relevant AY i.e. 2019-20 and income escaping assessement 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 issued beyond the period prescribed u/s 148(1)(a) of the Act and so, the assessment order passed by the Learned AO not sustainable in the eye of law.
9. Likewise, the Learned AR also relied upon the order of co-ordinate Mumbai Bench in ITA No. 4596/MUM/2026, AY 2019-20, titled as Sachin Madhukar Fegde Vs. DCIT, Circle-1, dated 21.08.2026 in which the approval for reopening of the assessement had been granted beyond a peroid of three years from the end of the relevant AY, not by the Principal Chief Commissioner of Income Tax, as mandated under the provisions of section 151(ii) of the Act, accordingly, such notice is bad in law and consequently, the reassessmenent framed is void ab initio, liable to be quashed.
10. In present case, the matters pertains to AY 2019-20, income escaping assessement less than Rs 50 Lakhs, in which notice was issued on 12-04-2023, beyond the period prescribed in law and in view of the foregoing fact situation and in order to maintain judicial consistency, by following the judicial precedents cited supra, we hold that the reassessment framed u/s 147 of the Act is quite contrary to law, invalid, unsustainable in the eye of law and accordingly, the reassessment framed for A.Y. 2019-20 u/s 147 read with section 144 of the Act is deserves to be quashed, by allowing legal grounds raised by the appellant, Since we allowed the same, other grounds raised are not being adjudicated as acadamic in nature.
11. Consequently, this appeal is hereby allowed as indicated above.
Order pronounced on 04/11/2026 in Open Court
