TaxTMI 
TaxTMI 
2026 (9) TMI 486
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....y of 25 days. 2.1 It is stated that after receipt of the order passed u/s 250 of the Act, the assessee approached its Chartered Accountant for further advice. The Chartered Accountant advised filing of appeal before the Tribunal but expressed inability to file the appeal and advised the assessee to approach the present counsel. Thereafter, the assessee contacted the present counsel and furnished necessary documents in January 2026. It is further stated that the appeal was required to be filed by affixing digital signature. However, the authorized signatory was not available in town during the first week of February 2026 and the DSC had also expired. The assessee got the DSC renewed and the same was made available on 19.02.2026. Thereafter, there was also technical difficulty in uploading Form No. 36, as the file size exceeded the prescribed limit. Ultimately, the appeal was filed on 25.02.2026. The said facts have also been affirmed in the affidavit filed by the President of the assessee society. In view of the above, the ld. AR prayed to condone the delay and adjudicate the issue on merit of the case. 3. Per contra, the ld. DR considering the length of delay, did not raise t....
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....grounds on merit on legal issue are arising from the facts already available on record. No fresh investigation of facts is required for adjudication of the issue. The relevant dates relating to issuance of notices u/s 148A and 148 are already part of the assessment records. Therefore, determination of the validity of the same only requires examination of the legal implications arising from the admitted facts already on record. 4.5 It is well settled by a catena of judicial precedents that additional ground involving a question of law and not requiring further investigation into new facts can be raised at any stage of appellate proceedings. The Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT reported in 229 ITR 383 (SC) has held that the Tribunal has jurisdiction to examine a question of law arising from the facts as found by the authorities below and having a bearing on the tax liability of the assessee, even though such question was not raised before the lower authorities. In the present case, the ground raised goes to the root of the assessment proceedings and correctness of the computation of the tax liability of the assessee. Since all materia....
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....furnished to show that the deposits were made out of available cash balance. Therefore, the deposits are duly explained and there is no escapement of income. 4.10 The assessee further submitted that for A.Y. 2015-16, the amendment requiring filing of return for claiming deduction u/s 80P of the Act was not applicable. Hence, deduction u/s 80P of the Act cannot be denied on this ground. 4.11 It is also submitted that the fixed deposits of the assessee were made only with other co-operative societies. Interest earned thereon is eligible for deduction u/s 80P(2)(d) of the Act. The said deposits were made as part of the statutory and business requirement under the Karnataka Co-operative Societies Act, including maintenance of reserve funds, SLR and CRR. The assessee has not made such deposits with nationalized banks or private banks. In view of the above facts, the bank deposits are fully explained and were made in the normal course of business of the assessee society. Therefore, there is no income escaping assessment. The proceedings proposed u/s 147 of the Act may kindly be dropped and no notice u/s 148 of the Act may be issued. 4.12 However, the AO rejected the assessee'....
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....on beyond three years is not available to the Revenue. Hence, the notice issued u/s 148 of the Act is without jurisdiction, time-barred and liable to be quashed. The learned AR, in contending so, placed reliance on the judgment of the Hon'ble Jurisdictional High Court of Karnataka in WP No. 201029 of 2024 between Anand Kumar Someshekarayya Lonarmath vs ITO Ward-1 as well as on the decision of the Hon'ble Rajasthan High Court in the case of Bijendra Singh vs ITO reported in 159 taxmann.com 306. 7. The learned DR, on the other hand, submitted that the notice issued u/s 148 of the Act is not barred by limitation. The proceedings were initiated on the basis of specific information that the assessee had made cash deposits of Rs. 1.33 crores in its bank account during the relevant previous year. Since the information available with the Department clearly showed cash deposits exceeding Rs. 50 lakhs, the case squarely falls within the extended time limit prescribed u/s 149(1)(b) of the Act. 7.1 The Ld. DR further submitted that before issuing notice u/s 148 of the Act, the AO had duly issued notice u/s 148A(b) of the Act and provided the assessee with a proper opportunity to explain ....
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....siness requirement, it was deposited into the society's regular bank accounts. The assessee also submitted datewise details of cash deposits and cash book extracts to demonstrate the availability of cash on the respective dates. 8.1 Thus, the assessee had specifically explained the nature and source of the cash deposits. After considering the said reply, the Ld. AO did not proceed in the order u/s 148A(d) of the Act on the basis that cash deposits of Rs. 1.33 crore represented unexplained income. Instead, the Ld. AO changed the basis of reopening and observed that since the assessee had not filed return of income, the deduction u/s 80P of the Act was not allowable in view of section 80A(5) of the Act. On this basis, the Ld. AO passed an order u/s 148A(d) of the Act and thereafter issued a notice u/s 148 of the Act dated 30.03.2022. 8.2 This fact is very material. The notice u/s 148A(b) of the Act was initially based on alleged unexplained cash deposits of Rs. 1.33 crores. However, after the assessee explained the nature and source of the cash deposits with reference to its business activity and cash book, the Ld. AO did not record any adverse finding in the order u/s 148A....
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.... reply and thereafter decide whether it is a fit case for issuing a notice u/s 148 of the Act. Therefore, the order u/s 148A(d) of the Act is not an empty formality. It is the final jurisdictional satisfaction before issuing notice u/s 148 of the Act. 8.7 Once the assessee furnished an explanation regarding the cash deposits and the Ld. AO did not carry forward the allegation of unexplained cash deposits in the order u/s 148A(d) of the Act, the Revenue cannot rely upon the very same cash deposits only for the limited purpose of crossing the threshold of Rs. 50 lakh u/s 149(1)(b) of the Act. The jurisdiction to reopen must stand or fall on the basis which survives in the order u/s 148A(d) of the Act. In the present case, the surviving basis is only the denial of deduction u/s 80P of the Act, involving income of Rs. 24,45,022/- only. 8.8 If the contention of the Revenue is accepted, then the safeguard provided u/s 148A of the Act would become meaningless. In every case, the Department may mention a higher figure in the notice u/s 148A(b) of the Act, and even after accepting or not disputing the assessee's explanation on such a higher figure, still rely upon that figure to invok....
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....3/- which is much less than the threshold limit of Rs. 50 lakhs. The revenue would not have any authority or jurisdiction to issue a notice under Section 148 if the threshold limit of Rs. 50 lakhs is not shown to have escaped assessment beyond 3 years of the assessment. The assessment order in the present case showing the escaped assessment to be Rs. 30,23,623/- being within the threshold limits as held supra. No powers under Section 148 could be exercised." 8.10 We also find support from the decision of the Hon'ble Rajasthan High Court in the case of Bijendra Singh vs. ITO reported in 159 taxmann.com 306, wherein it was held that where notice was issued by invoking the extended period u/s 149(1)(b) of the Act, but the amount actually found was below Rs. 50 lakhs, the AO lost jurisdiction to continue the proceedings as the case would fall within the normal limitation period of three years. The relevant portion of the said decision is reproduced as under: 14. We have considered the submissions made by learned counsel for the parties and perused the material available on record. 15. The facts are not in dispute, wherein, the notice under section 148A of the Act o....
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.... 20. It would seem that the assessing authority accepted the plea of the petitioner regarding the cash deposits of Rs. 33,62,000/- only. However, choose to issue a show cause notice purportedly under section 69A read with section 115BBE of the Act of 1961 to the petitioner, to which the petitioner filed response and raised objections about the jurisdiction to proceed further in the matter/issue show cause notice during pendency of the proceedings under section 148 of the Act of 1961. 21. However, the assessment order dated 27-3-2023 (Annexure-4C) was issued, wherein, the authority on the law cited by the petitioner in the case of Abdul Majeed (supra) observed that he had no jurisdiction to come to a conclusion based on the said judgement and determined the total income as Rs. 15,18,900/. 22. From the above it is apparent that though the notice was issued on the assumption that the cash deposits were Rs. 59,75,000/- by invoking extended period of limitation, as a fact, it was found that the same was Rs. 33,62,000/- only and once, the said aspect was clear to the authority, the authority lost its jurisdiction to further continue with the proceedings as the limitatio....