Reassessment limitation depends on verified escaped-income figures, and incorrect transaction data cannot justify extended reopening.

Reassessment limitation under section 148 must be tested on the actual, verified escaped-income figure, not on inflated or non-existent transaction data. The Tribunal noted that bank statements and the assessee's reply showed cash deposits of only Rs. 19,50,000, while the reopening was based on a higher aggregate figure that wrongly included non-cash or inter-bank entries. Because the Assessing Officer did not verify the record before invoking the extended limitation period, the alleged escaped income was below the statutory threshold for that longer period. The notice was therefore time barred and invalid, and the reassessment could not survive.

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Issues: Whether the notice under section 148 was barred by limitation because the reopening was founded on incorrect transaction figures and the actual cash deposits were below the threshold prescribed for the extended limitation period.

Analysis: The assessee had placed bank statements and a reply before the Assessing Officer showing total cash deposits of only Rs. 19,50,000, whereas the reassessment proceedings proceeded on a much higher aggregate figure by including non-cash or inter-bank entries. The Tribunal found that the Assessing Officer did not verify the actual bank statements before forming the view that escaped income exceeded the statutory threshold. Since the correct facts showed that the alleged escaped income was below Rs. 50 lakhs, the longer limitation period could not be invoked on the basis of incorrect or non-existing transactions. Once the reopening itself was time barred, the reassessment order based on that notice could not survive.

Conclusion: The notice under section 148 was held to be barred by limitation and invalid, and the reassessment was quashed.

Final Conclusion: The reopening failed at the threshold because limitation had to be tested on the actual facts disclosed by the record, not on inflated or erroneous figures; all remaining grounds became infructuous.

Ratio Decidendi: For determining the limitation period for reassessment, the authority must rely on the actual and verified escaped-income figure, and a notice issued beyond the shorter limitation period cannot be sustained by relying on incorrect or non-existent transaction data.

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