Reassessment limitation and section 69A addition: notice upheld as timely, but accounted business receipts could not be taxed as unexplained money.

A reassessment notice under section 148 was issued within the limitation period under section 149, so the time-bar objection failed and the notice was upheld. On merits, the addition under section 69A was deleted because the assessee produced books of account and supporting evidence showing that the receipts were accounted business sales, and the Tribunal found the Assessing Officer had not properly considered that documentary record. The case therefore resulted in partial relief: limitation did not invalidate the reassessment, but the impugned addition was unsustainable and was set aside.

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Issues: (i) Whether the notice under section 148 was barred by limitation under section 149 of the Income-tax Act, 1961; (ii) whether the addition of Rs. 33,00,190 under section 69A was sustainable.

Issue (i): Whether the notice under section 148 was barred by limitation under section 149 of the Income-tax Act, 1961.

Analysis: The notice under section 148 was issued on 31.03.2022. The period of limitation applicable to the reassessment notice was examined with reference to section 149, and the objection that the notice was time-barred was found untenable on the facts placed before the Tribunal.

Conclusion: The limitation challenge failed and the notice under section 148 was upheld as within time.

Issue (ii): Whether the addition of Rs. 33,00,190 under section 69A was sustainable.

Analysis: The assessment was based on alleged bogus transactions with two parties, but the assessee produced books of account and supporting material showing that the receipts represented business sales recorded in the regular accounts. The Tribunal found that the Assessing Officer had not properly considered the documentary evidence and that the amounts were duly credited in the books. On that basis, the application of section 69A was held unsustainable.

Conclusion: The addition under section 69A was deleted and the assessee succeeded on merits.

Final Conclusion: The reassessment proceedings were not invalidated on limitation, but the impugned addition was set aside, resulting in partial relief to the assessee.

Ratio Decidendi: An addition under section 69A cannot be sustained where the impugned receipts are shown by books and supporting evidence to be accounted business transactions, and a reassessment notice issued within the applicable limitation cannot be invalidated on a bare plea of time bar.

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