ITAT Mumbai Invalidates Reassessment Where Escaped Income of Rs. 6 Lakh Falls Below Mandatory Rs. 50 Lakh Limit Under Section 149(1)(b)

Case Overview: Trishladevi Mukesh Jain Vs ITO (ITAT Mumbai)

The Mumbai Bench of the Income Tax Appellate Tribunal delivered a significant ruling in Trishladevi Mukesh Jain Vs ITO, holding that reassessment proceedings initiated under Section 147/Section 148 of the Income Tax Act, 1961 were fundamentally flawed and jurisdictionally incompetent. The core issue revolved around whether a notice issued beyond the standard three-year limitation window could be sustained when the alleged escaped income amounted to a mere Rs. 6,00,000/- — far below the statutory minimum of Rs. 50,00,000/- mandated under Section 149(1)(b) of the Income Tax Act, 1961. The Tribunal unequivocally ruled in favour of the assessee, declared the notice void ab initio, and quashed the entire reassessment.

Background and Facts of the Case

The assessee raised multiple grounds of appeal before the Tribunal, challenging both the jurisdictional propriety of the reassessment proceedings and the substantive addition of Rs. 6,00,000/- made under Section 69A of the Income Tax Act, 1961. The grounds of appeal covered the following key objections:

  1. The reopening under Section 147 was bad in law and liable to be quashed.
  2. The proceedings for Assessment Year 2017–18 were time-barred under Section 149(1)(b) of the Income Tax Act, 1961.
  3. The notice under Section 148 was issued by a Jurisdictional Assessing Officer, allegedly in violation of the Faceless Assessment Scheme framed under Section 151A of the Income Tax Act, 1961.
  4. The notice under Section 148 did not carry a Document Identification Number (DIN), in contravention of CBDT Circular No. 19 of 2019 dated 14.08.2019.
  5. Proper approval as required under Section 151 of the Income Tax Act, 1961 was not obtained before issuance of the notice.
  6. The addition of Rs. 6,00,000/- under Section 69A on account of alleged cash payment to M/s Shivam Autozone (India) Pvt. Ltd. for purchase of a car was confirmed without adequately considering that the payment was made from cash available as on 01.11.2016.
  7. Tax was wrongly levied under Section 115BBE of the Income Tax Act, 1961 on the addition made under Section 69A.
  8. Penalty under Section 271AAC(1) of the Income Tax Act, 1961 was erroneously imposed.
  9. Interest under Section 234B of the Income Tax Act, 1961 was incorrectly charged.

Delay Condonation