TaxTMI 
TaxTMI 
2026 (5) TMI 170
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....t 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. 4. The learned Authorised Representative of the Assessee has submitted that the Assessing Officer has initiated the reopening of the assessment by issuing show cause notice u/sec. 148A(b) of the Act dated 27.02.2003 on the basis of the three transactions of alleged cash deposits in the bank account of the assessee total amounting to Rs. 52,10,000/-. However, out of these three transactions as alleged by the Assessing Office....
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....g the cash deposit in the bank account more than Rs.50 lakhs then, the limitation for issuing the notice u/sec. 148 of the Act would be 06 years or 10 years. He has further submitted that the Assessing Officer has considered this issue in the assessment order and decided the objections of the assessee by following the Judgment of Hon'ble Allahabad High Court in the case of ARB Hotels Resorts (P.) Ltd., vs. Pr. CCIT [2023] 156 taxmann.com 238 (All.HC). Thus, he has submitted that the notice issued by the Assessing Officer u/sec. 148 of the Act based on the information available with the Assessing Officer showing the cash deposit in the bank account of the assessee more than Rs.50 lakhs is well within the period of limitation and therefore, the same is valid. 6. We have considered the rival submissions as well as relevant material on record. There is no dispute that the Assessing Officer issued show cause notice u/sec. 148A(b) of the Act on 27.02.2023 which reads as under: ANNEXURE Please refer to this office notice u/s 148A(a) of Income Tax Act, 1961, issued after obtaining prior approval of the specified authority, on 04.02.2023 in connection with conducting enqu....
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.... under clause (d) of section 148A of the Income-tax Act, 1961 Specific information was flagged as per Risk Management Strategy formulated by the CBT through Insight Portal under the category 'RMS - High Risk Non-Filer' for the Financial Year 2015-16 relevant to Assessment Year 2016-17. The information available shows that the assossce 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 banking company a THE TELANGANA BANK LIMITED- STATE CO- OPERATIVE APEX JUBILEE HILLS BRANCH 400000 2. As per the provisions of Explanation 1(i) 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 f....
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....essable under the Income tax Act, 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/AST/F/148A/2022-23/1051156668(1) dated 23/03/2023 and annexed herewith for reference, 2. I, 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 cash deposits without even verifying the bank account statement of the assessee. In the assessment order the Assessing Officer finally held that the only tr....
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....otice 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 escaped assessment is less than or more than Rs.50 lakhs. The Assessing Officer relied upon the Judgment of Hon'ble Allahabad High Court in the case of ....
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..../- 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. 6. On perusal of the bank statement, it appears that the petitioner has an arguable case to contend that the cash deposits were used for ....
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....plying 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. 16,20,000/- thus totaling Rs. 36,91,500/-, In this regard, if the provisions of Section 149(1)(b) of the Act of 1961 are considered, it is ....
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.... u/sec. 148 of the Act being barred by limitation, it vitiates the re-assessment order passed by the Assessing Officer therefore, the other grounds raised by the assessee become infructuous and not taken up for adjudication. 7. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 17.04.2026. ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE INCOME TAX OFFICER WARD 6(1), HYDERABAD NCOME K DEPARTMENT To. ADILAKSHMI VANGALA H NO 8-3-231/A 374 , KRISHNANAGAR YOUSUFGUDA HYD , Andhra Pradesh India PAN: A.Y: Dated: DIN & Notice No: ACRPV6738R 2016-17 27/02/2023 ITBA/AST/F/148A(SCN)/2022- 23/1050137950(1) Notice under clause(b) of section 148A of the Income-tax Act, 1961 Sir/Madam/M/s Whereas I have information which suggests that income chargeable to tax for the Assessment Year 2016-17 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....