ITAT Quashed the Assessment order as Actual Income Escapement was below ₹ 50 Lakhs
Recently, the ITAT has quashed the assessment Order as AO Reopened Case for AY 2015-16 Alleging Income Escapement Above ₹50 Lakhs, But Actual Escapement Was below ₹ 50 Lakhs, Making Reopening Invalid”
The Income Tax Appellate Tribunal (ITAT) concluded that the notice issued under Section 148 of the Income Tax Act, dated 28/04/2022, was illegal and void-ab-initio.
The AO initiated the reopening of the assessment for AY 2015-16 on the incorrect assumption that income exceeding ₹50 lakhs had escaped assessment, citing alleged cash deposits, time deposits, and property sales. The order passed under Section 148A(d) mentioned an alleged income escapement of ₹3,15,18,299/- comprising time deposits, cash deposits, and sale of immovable property valued at ₹58,76,000/-. However, inquiries revealed that the relevant bank account was closed on 28/03/2014, and there were no deposits during the relevant period.
The only valid escapement identified was the TCS reported in Form-26AS amounting to ₹17,24,023/- with a TCS amount of ₹15,736/-, totaling ₹17,39,759/-, which is well below the threshold of ₹50 lakhs required under Section 149(1)(b) to reopen assessments beyond three years.
The Assessing Officer (AO), despite acknowledging the lack of evidence of deposits, passed an assessment order under Section 143(3) r.w.s 147 on 18/03/2024, assessing the total income at ₹17,24,023/-. Since the actual income escaped assessment was below ₹50 lakhs, the Tribunal held that the AO lacked proper jurisdiction to reopen the assessment.
Therefore, the Tribunal quashed the assessment order of ₹17,24,023/- and allowed the appeal filed by Sri Adiparashakti Boards in full.
The Copy Of the order is as under:
