ITAT Amritsar Quashes Section 148 Reassessment Initiated on Factually Wrong Figures — Mechanical Approval Under Section 151 Held Invalid
Case Background: Anuradha Vs ITO (ITAT Amritsar)
The ITAT Amritsar recently delivered a significant ruling in Anuradha Vs ITO, allowing the appeal of an assessee whose reassessment proceedings under Section 147 read with Section 143(3) of the Income Tax Act, 1961 were found to have been initiated on factually erroneous grounds. The order passed by the CIT(A), NFAC, Delhi under Section 250 dated 15.04.2024, which had partly upheld the Assessing Officer's additions, was set aside in its entirety by the Tribunal.
Condonation of Delay — Practical Approach Towards a Vulnerable Assessee
Before proceeding on merits, the Tribunal addressed the preliminary issue of a 52-day delay in filing the appeal. The assessee, an elderly widow residing in a rural village named Tharial with limited literacy and no access to digital communication, explained through an affidavit that the appellate order had been communicated to her son's email address. Since she lived separately from her son and was unaware of electronic correspondence, she came to know of the order only when her son informed her at a considerably later date. Upon receiving this information, she approached her legal counsel and filed the appeal.
The Departmental Representative raised no objection to the condonation request. The Tribunal, satisfied that the delay was neither deliberate nor the result of wilful negligence, condoned the 52-day delay and admitted the appeal for consideration on merits.
Key principle: Courts and tribunals consistently hold that procedural technicalities should not be permitted to deny justice to assessees who are genuinely unaware of orders, especially those belonging to vulnerable or rural backgrounds.
Factual Background of the Case
The Assessee's Profile and Source of Income
The assessee, Smt. Anuradha, was a widow who inherited approximately 30 acres of agricultural land located at village Jaini Khalki, Madhopur, Tehsil and District Pathankot, following the demise of her husband in 2013. A certificate issued by the local Gram Panchayat dated 01/10/2023 corroborated her active engagement in agricultural operations on this land alongside her son. Her declared sources of income were restricted to agricultural income and interest accruing from bank fixed deposits that had been periodically renewed over the years. She was a non-filer for the relevant assessment year.
Initiation of Reassessment Proceedings
The Assessing Officer, acting on information that the assessee had made cash deposits in the State Bank of India and had additionally invested in time deposits, with the combined total recorded as ₹47,77,923/-, initiated reassessment proceedings by issuing a notice under Section 148 dated 26th March, 2019. This was done after obtaining approval from the higher authority under Section 151(1). Since no response was received to an inquiry notice issued under Section 133(6), and no representation was made during scrutiny proceedings, the AO passed an ex-parte assessment order dated 09/12/2019.
Additions Made by the Assessing Officer
The ex-parte order computed the total income of the assessee at ₹7,73,490/-, comprising:
- ₹5,61,923/- on account of peak credit in the SBI bank account
- ₹2,11,570/- on account of interest accrued on bank fixed deposits
Notably, despite the recorded reasons referring to cash deposits and time deposit investments aggregating ₹47.77 lakh, the assessment order made no specific discussion regarding these figures and ultimately restricted itself to the peak deposit computation.