Hyderabad ITAT: Validity of Reopening Under Section 148 Tested at Initiation Stage — Not on Final Addition Quantum

Case Reference

Siva Madhavi Garapati Vs ITO (ITAT Hyderabad)
Assessment Year: 2018-19
Order Date: 15th May, 2026
Arising from CIT(A), NFAC Order dated: 13/01/2026
Original Assessment Order dated: 19/02/2024 under Section 147 r.w.s Section 144 r.w.s Section 144B of the Income Tax Act, 1961

Background and Context

This ruling by the Hyderabad Income Tax Appellate Tribunal addresses a critical jurisdictional question that frequently arises in reassessment proceedings: whether the validity of reopening beyond three years under Section 148 should be evaluated based on the information available at the time of initiation of proceedings, or on the basis of the final additions ultimately sustained in the assessment order.

The case involved an assessee who was a non-filer for Assessment Year 2018-19. The reassessment proceedings were initiated on the basis of information indicating that she had made an investment in immovable property amounting to ₹1.10 crore and had also made cash deposits of ₹10,08,800/- in her bank account during the relevant year. Since the aggregate of these figures exceeded ₹50 lakhs, the Assessing Officer proceeded to reopen the assessment beyond the three-year limitation period.

Grounds of Appeal Raised Before the Tribunal

The assessee challenged the order of the CIT(A), NFAC before the ITAT on the following grounds:

  1. The order passed by the CIT(A) was erroneous both on facts and in law, and was passed in gross violation of principles of natural justice.
  2. Without prejudice to the above, the CIT(A) failed to appreciate that the assessment order was barred by limitation, as the alleged income escaping assessment was below ₹50 lakhs, thereby depriving the Assessing Officer of jurisdiction to reopen the assessment for the year under consideration.
  3. Without prejudice to the above, the CIT(A) erred in sustaining the addition made by the AO of ₹10,08,800/- as unexplained investment under Section 69 of the Act.
  4. The authorities below failed to appreciate the explanation of the assessee with respect to sources of cash deposits in proper perspective.
  5. Any other ground that may be urged at the time of hearing.

Key Arguments: Assessee's Position

The Authorised Representative of the assessee, Shri A V Raghuram, advanced the following contentions:

On Jurisdictional Challenge