ITAT Ahmedabad Sends Matter Back: Revenue Must Prove Reassessment Order Was Passed Within Limitation

The Ahmedabad Bench of the Income Tax Appellate Tribunal, in the case of Jigarkumar Champaklal Inamdar Vs ITO (ITAT Ahmedabad), dealt with an unusual but increasingly relevant issue in the faceless and electronic era of income-tax administration: what happens when a reassessment order under Section 143(3) read with Section 147 is not visible on either the old or the new income-tax e-filing portal?

Instead of deciding the appeal solely on limitation or the merits of the addition relating to cash deposits, the Tribunal focused on a more foundational jurisdictional question—whether the assessment order was in fact passed within the statutory time limit. The Tribunal directed the Assessing Officer to verify and demonstrate that the order had indeed been passed in time. Until such verification, the Tribunal allowed the assessee’s appeal for statistical purposes, leaving the door open for either party to return to the Tribunal based on the outcome of this verification exercise.

Background: Reopening Based on Cash Deposits Information

Information Received and Reopening under Section 147

The case originated when the Assessing Officer received information that the assessee had made cash deposits aggregating to Rs.24,20,000/- during the financial year 2011-12 in a savings bank account with Bank of Baroda. Acting on this information:

• The Assessing Officer recorded reasons for reopening under Section 147.
• Prior approval from the Pr. CIT, Vadodara-1, Vadodara was obtained through a letter dated 27.03.2019.
• A notice under Section 148 of the Income Tax Act 1961 was issued on 28.03.2019 and duly served upon the assessee.

In response to the notice under Section 148, the assessee requested that the original return of income filed on 29.08.2012 be treated as the return furnished in compliance with the reassessment notice.

Subsequent Notices and Bank Information

Following this, the Assessing Officer proceeded with reassessment proceedings:

• Notices under Section 142(1) and Section 143(2) were issued to the assessee.
• A notice under Section 133(6) was issued to Bank of Baroda, Vadodara.
• Based on the bank statement received, it was confirmed that cash deposits aggregating to Rs.24,20,000/- had been made into the assessee’s savings bank account during the relevant financial year.

The assessee was required to explain the nature and source of these cash deposits. However, as recorded in the assessment proceedings and noted by the Tribunal, the assessee did not furnish any explanation or documentary support despite being given an opportunity.

Addition as Unexplained Cash Credit

In the absence of any explanation from the assessee regarding the source of the deposits, the Assessing Officer treated the sum of Rs.24,20,000/- as unexplained cash credit and added it to the total income of the assessee in the reassessment order purportedly passed under Section 143(3) read with Section 147.

First Appeal: Dismissed on Limitation Without Going Into Merits

Appeal Before CIT(A)

Aggrieved by the reassessment order, the assessee filed an appeal before the CIT(A).

However, the CIT(A) did not examine the merits of the addition.