AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 111
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...., representing the alleged income escaping assessment. Hence, the quantum of escapement is less than Rs. 50 lakh, and accordingly, the permissible time limit for issuing a notice u/s. 148 is three years as per Section 149(1)(a). The notice dated 07.04.2022 was issued beyond this three-year period and is therefore time-barred. The AO duplicated entries to artificially inflate escapement above Rs. 50 lakh, which is unjust and contrary to law. Consequently, the reassessment proceedings are without jurisdiction and liable to be quashed. 3. Absence of Mandatory Notice u/s. 143(2)-Assessment Void: The appellant filed a return of income on 18.10.2023 in response to the notice u/s. 148, which was accepted by the Assessing Officer and included in the computation of income, and this fact is acknowledged by the CIT(A) in Para 6 of the appellate order. Once a return is filed and accepted, it is mandatory for the A) to issue notice u/s. 143(2) before making any variation. Failure to do so renders the reassessment void, as held in ACIT v. Hotel Blue Moon (2009) 321 ITR 362 (SC) and Pr. CIT v. Jai Shiv Shankar Traders Pvt. Ltd. (2016) 383 ITR 448 (Del). 4. Jurisdictional Error i....
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....e other hand, the learned DR has relied upon the Orders of the authorities below. 6. We have considered the rival submissions as well as relevant material on record. In the case in hand, the Assessing Officer has issued notice u/sec. 148 of the Act on 07.04.2022 as under: GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE INCOME TAX OFFICER WARD 1, SANGAREDDY To IKRAMUDDIN MOHAMMED HNO 2-1-221 N G O S COLONY, ZAHEERABAD MEDAK 502220, Andhra Pradesh India PAN: ATVPM8711E A.Y: 2015-16 Dated: 07/04/2022 DIN & Notice No: ITBA/AST/S/148_1/2022-23/1042607983(1) Notice under section 148 of the Income-tax Act. 1961 Sir/Madam/ M/s. • I have the following information in your case or in the case of the person in respect of which you are assessable under the Income tax Act, 1961(here in after referred to as "the Act") for Assessment Year 2015-16 • information flagged by the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Order under sub-section (d) of se....
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.... period of six years. As such, the notice is barred by limitation, 6. Accordingly, the Writ Petition stands allowed. Notice dated 11.04.2022 stands set aside/quashed and the consequent assessment order also stands set aside/quashed. No order as to costs." 6.2. Thus in view of the binding precedent, we hold that the notice issued by the Assessing Officer u/sec. 148 dated 07.04.2022 is barred by limitation and the same is set aside. Further in the case in hand, the Assessing Officer has reopened the assessment to re-assess the income escaped assessment, details of which, are given at Page-2 of the assessment order as under: 1 Time deposit exceeding Rs. 2,00,000/- with a banking Company BANK OF HYDERABAD - 20101- ZAHEERABAD 22,13,779/- 2 Time deposit exceeding Rs. 2,00,000/- with a banking company CENTRAL BANK OF INDIA - NAMPALLY BRANCH 10,00,000/- 3 Deposited cash of Rs. 10,00,000/- or more in a saving bank account STATE BANK OF HYDERABAD, GUNFOUNDRY BR 17,00,000/- 4 Deposit In Cash aggregating Rs. 2,00,000/- or more, with a banking company STATE BANK OF HYDERABAD - 20101- ZAHEERABAD 17,00,000/- 5 TDS Statement - Inter....
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....hich suggests that income chargeable to tax for the Assessment Year 2017-18 has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. The details of the information/ enquiry conducted on which reliance is being placed, along with supporting documents, are enclosed with this notice. 2. You are required to show-cause as to why, in view of the details contained in enclosures mentioned in point number 1 above, a notice section 148 of the Income tax Act, 1961 should not be issued. 3. You may submit your reply to this notice, along with supporting documents (if any) on the above mentioned issues on or before 11/03/2024 electronically at www.incometax.gov.in. CHAKRADHARI G WARD-1, WARANGAL ANNEXURE 1. Whereas I have information which suggests that income chargeable to tax for the Assessment Year 2017-18 has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. The details of information/enquiry conducted on which reliance is being placed is tabulated hereunder: 1. A Notice of Enquiry u/s. 148A(a) of the I.T. Act, 1961 dtd. 12-01-2024 has been issued under the category of High Risk Non-file....
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....nt and in response to the said notice, the assessee filed reply dated 03.02.2024 along with ledger account, bank account statements etc. In the said reply, the assessee has explained that the assessee was having 02 bank accounts i.e., Savings Bank A/c as well as Loan A/c with IDBI Bank. In both the accounts the total cash deposit during the year was Rs. 19,50,000/-. Copies of the bank account of the assessee are also placed at page nos.5 to 8 of the paper book as under: 8.2. Thus, it is clear from the bank account statement of the assessee that there is a cash deposit of Rs. 6,50,000/- in the Savings Bank A/c and Rs. 13,00,000/- in the loan account both maintained with IDBI Bank total amounting to Rs. 19,50,000/-. This fact of cash deposit is evident from the bank account statements of the assessee which were available with the Assessing Officer as filed by the assessee in response to the notice u/sec. 148A(a) of the Act dated 12.01.2024. When the total cash deposit in the 02 bank accounts of the assessee was only Rs. 19,50,000/- then, the notice issued by the Assessing Officer u/sec. 148A(b) and the Order passed u/sec. 148A(d) and notice issued u/sec. 148 of the Act are b....
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....issued after obtaining prior approval of the specified authority, on 04.02.2023 in connection with conducting enquiry into the transactions entered by you. In this regard, certain information has been called for from you. There is no response for the above enquiry letter. 2. As per NMS module of Insight Portal, for the Financial Year 2015-16 relevant to Assessment Year 2016-17, it is noticed that you have entered into the following transactions :- Information Code Information Description Source Amount (Rs.) CIB-410 Deposit In Cash aggregating Rs. 2,00,000/- or more, with a banking company OPERATIVE APEX BANK LIMITED- THE TELANGANA STATE CO- CHAMPAPET BRANCH 1000000 AIR-001 Deposited cash of Rs. 10,00,000 or more in a saving bank account BANK LIMITED HYDERABAD TELANGANA STATE CO-OPERATIVE APEX 3810000 CIB-410 Deposit In Cash aggregating Rs. 2,00,000/- or more, with a banking company BANK LIMITED- JUBILEE HILLS THE TELANGANA STATE CO- OPERATIVE APEX BRANCH 400000 3. It is seen that in spite of entering into the above high value transactions, you have not filed return of income for the year under consideration. Therefor....
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....Assessment Year 2016-17. The information available shows that the assessee has entered into the following transactions. Information Code Information Description Source Amount (Rs.) CIB-410 Deposit In Cash aggregating Rs. 2,00,000/- or more, with a banking company THE TELANGANA STATE CO-OPERATIVE APEX BANK LIMITED-CHAMPAPET BRANCH 1000000 AIR-001 Deposited cash of Rs. 10,00,000 or more in a saving bank account TELANGANA STATE CO-OPERATIVE APEX BANK LIMITED HYDERABAD 3810000 CIB-410 Deposit In Cash aggregating Rs. 2,00,000/- or more, with a banking company THE TELANGANA STATE CO- OPERATIVE APEX BANK LIMITED- JUBILEE HILLS BRANCH 400000 2. As per the provisions of Explanation 1(1) of section 148 of the Income-tax Act, the above stated information flagged in accordance with the risk management strategy formulated by the Board in the case of the assessee for the relevant assessment year, represents information available with the Assessing Officer which suggests that income chargeable to tax has escaped assessment. 3. It is observed that in spite of entering into the above high value transactions, the assessee has not file....
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....961 Sir/Madam/ M/s. 1. I have the following information in your case or in the case of the person in respect of which you are assessable under the Income tax Acl, 1961(here in after referred to as "the Act") for Assessment Year 2016-17 • information in accordance with the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Order under sub-section (d) of section 148A of the Act has been passed in such case vide DIN ITBA/AS1/1/148A/2022-23/1051156668(1) dated 23/03/2023 and annexed herewith for reference, 2. 1, therefore, propose to assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for the Assessment Year 2016-17 and I, hereby, require you to furnish, within 30 days from the service of this notice, a return in the prescribed form for the Assessment Year 2016-17. SRINIVASA RAO TUMMALAPALLI WARD 6(1),HYDERABAD 6.2. Thus, it is clear that even at the time of passing the Order u/sec. 148A(d), the Assessing Officer has considered the same amount of ca....
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....otice u/sec. 148 of the Act issued on 24.03.2023 is beyond 03 years and therefore, the same is time barred and invalid. It is pertinent to note that if a notice based on the correct and actual facts is invalid then, the same cannot be treated as valid by considering incorrect and non-existing facts and hence, the period of limitation provided u/sec. 149(1)(b) of the Act cannot be enlarged or extended on the basis of incorrect facts or non-existing facts. It is a case of non-existing transaction of cash deposit which are considered by the Assessing Officer and not a case that the transaction of deposit is rightly considered by the Assessing Officer however, the assessee was able to explain the source during the assessment proceedings and finally the Assessing Officer after accepting the source of cash deposit made an addition which is less than Rs. 50 lakhs. Therefore, there is no quarrel on the point that the addition finally made by the Assessing Officer in the assessment would not necessarily render the case of the assessee in the category of 'income escaped assessment is less than or more than Rs. 50 lakhs' but the primary facts are relevant to consider whether the income escape....
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...."3. In response to the said notice u/s. 148A(b), assessee replied on 28.03.2022. According to assessee "He deposited in cash Rs. 25,90,000/-and the same has been deposited as fixed deposit. Hence, the amount of income escaped is less than 50 lakhs." Assessee submitted bank statement also for the relevant financial year. I have considered the reply of assessee and the same is not acceptable because of the following reasons: Though the assessee stated as the cash deposit again deposited as fixed deposit, the details of bank statement and others need to be verified. Thus income in the form of asset has escaped assessment is not less than Rs. 50 lakhs." 5. It is evident from the above that the assessing officer failed to examine the bank statement so as to verify whether the cash deposits were used for purposes of creating the fixed deposit. In spite of the assessee providing the bank statement, this exercise was not undertaken. Without undertaking this exercise, it cannot be rationally determined as to whether income in the form of an asset of the value not less than Rs 50,00,000/- had escaped assessment during the relevant assessment year. ....
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....petitioner is not the purchaser of the said property as stated in the notice issued under section 14BA (b) of the Act of 1961. Despite supplying copy of the registered sale deed to the Assessing Officer, it has not been taken into consideration by him before passing the order under section 148A(d) of the Act of 1961. The same thus clearly indicates lack of application of judicious mind to the material on record. The amount of Rs. 40,00,000/- as mentioned in the notice issued on 23-3-2022 under section 148A(b) thus deserves to be excluded from consideration. 7. As regards deposit of cash of Rs. 16,20,000/- is concerned, the petitioner had sought disclosure of the material of the source of information on the basis of which such notice was issued. The petitioner denied having deposited the aforesaid amount in his bank account. The material/source of information was not supplied to the petitioner. Be that as it may, even if the amount of Rs. 40,00,000/- as mentioned in the notice dated 23-3-2022 is excluded from consideration for the reason that the petitioner is not the purchaser of the property in question, the amount remaining for consideration is Rs. 20,71,500/- and Rs. 16....
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....ration is barred by limitation and liable to be set aside. We Order accordingly." 8.3. Thus, the notice issued u/sec. 148 of the Act after 03 years from the end of the assessment year under consideration and the correct amount of cash deposit in the bank account is less than Rs. 50 lakhs then, the same is barred by limitation. A notice issued u/sec. 148 of the Act and the actual facts of transaction of cash deposit in the bank account are juxtaposed then, the period of limitation for issuing the notice u/sec. 148 would be considered by considering the correct facts and not on the basis of the non-existing facts. Hence, an invalid notice issued u/sec. 148 of the Act on account of barred by limitation cannot be converted to a valid notice by enlarging the limitation based on non-existing facts. Accordingly, in the facts and circumstances of the case, when the actual transaction of cash deposit is Rs. 19,50,000/- only then, the notice issued u/sec. 148 of the Act would be barred by limitation being issued beyond 03 years from the end of the assessment year under consideration. The decisions relied upon by the learned DR would not help the case of the Revenue in the facts of t....
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....,372.00 48,934.00GR 24-09-2018 24-09-2016 Int .: 26-06-2016 To 24-09-2016 08.00 2.542.00CR 24-08-2016 24-08-2016 Chigs for RTGS Cust Pymnt:IBKLR92016082400075559 30.00 2.400.00CR. 24-08-2016 24-08-2018 220302 RTGSABKLR92016082400575550/ARUNA TRADERS INR 3,00,000.00 2.498.00CR 3 23-06-2016 23-08-2016 WARANGAL :- CASH RECEIPT INR 3,00,000.00 3,02,456.00GR 23-08-2018 23-08-2016 Chrge for RTGS Cust Pymint: IBKLR92016082300072525 INR 35.00 2.496.00CR. 1- 23-08-2016 23-08-2016 229391 RTGS/BKLR32016082300072525/OM SAI TRADERS INR 2,531.00CR. 22-08-2016 22-08-2016 WARANGAL :- CASH RECEIPT 50,000.00 1,52.531.00CR ---- 26-12-2016 26-12-2016 229393 13 26-12-2016 22-12-2016 22-12-2016 24-09-2018 ITA.No.2043/Hyd./2025 3 23-06-2016 23-08-2016 23-08-2018 23-08-2016 1- 23-08-2016 23-08-2016 229391 22-08-2016 22-08-2016 Document 2 - Luger Inquiry Page 2 of 2 Scanned with OKEN Scanner 6 13 25-06-2018 25-06-2010 Int .: 01-04-2016 To 25-06-2015 NR 11.00 2.531 DOCR 17-05-2018 17-05-2018 220225 WARANGAL :- SELF IHR 9.72.000.00 2.820.00CR 17-05-2018 17-05-2016 220224 WARANGAL :. SELF INR 9,72,000....