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2026 Supreme(Online)(ITAT) 10508

INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)
Prashant Maharishi, Vice President, Keshav Dubey, Judicial Member
Nikhil Chandran – Appellant
Versus
ITO International Taxation Ward 1(1) Bengaluru – Respondent
ITA No.2154/Bang/2025

Advocates:
For the Appellants/Petitioners: Shri V Narendra Sharma, A.R.
For the Respondents: Shri N. Balusamy, D.R.

Reopening of assessment under Section 147/148 beyond the normal period of 3 years requires satisfaction of the threshold of Rs 50 lakhs of escaped income in the form of an asset; failure to establish this threshold renders the extended limitation period under Section 149(1)(b) inapplicable.

Headnote:(A) Income Tax Act, 1961 - Sections 147, 148, 148A(d), 149(1)(b) - Reopening of assessment - Jurisdiction - Notice for reopening issued after statutory time limit for normal assessment - Revenue must possess evidence revealing income represented in the form of asset amounting to Rs. 50 lakhs or more to invoke extended period - Assessee demonstrated significant portion of investment was funded through housing loan - Once unexplained amount is below Rs. 50 lakhs, extended period cannot be invoked - Notice and subsequent assessment order quashed. (Paras 9.1 - 9.4)

Facts of the case:
The assessee, a non-resident, did not file a return for AY 2015-16. The Revenue initiated reopening proceedings alleging investment in immovable property worth over Rs. 50 lakhs. The assessee submitted that a major part was funded by a housing loan. The AO rejected this and passed an order u/s 148A(d) and subsequently completed the assessment u/s 147. On appeal, the order was challenged for being time-barred and lacking jurisdiction.

Findings of Court:
The court found that the AO failed to apply his mind to the evidence provided by the assessee during 148A proceedings. Since the alleged unexplained investment, after accounting for the housing loan, was below Rs. 50 lakhs, the jurisdictional requirement for invoking the extended period of limitation under Section 149(1)(b) was not satisfied.

Issues: Whether the reassessment notice issued beyond the normal three-year limitation period was valid, and whether the AO was justified in invoking the extended limitation period under Section 149(1)(b).

Ratio Decidendi: If the income or unexplained investment representing an asset is found to be less than Rs. 50 lakhs after considering the explanations and documentation provided by the assessee, the precondition for invoking the extended limitation period of 10 years under Section 149(1)(b) is not met.

Result: Appeal allowed.

Table of Content
1. nature of appeal and grounds raised. (Para 1 , 2)
2. factual background of the assessment, reopening, and the challenged orders. (Para 3 , 4 , 5 , 6)
3. summary of rival contentions regarding jurisdictional validity and evidence. (Para 7 , 8)
4. ao's failure to conduct a reasoned inquiry under section 148a(d). (Para 9)
5. quashing of the reopening and assessment orders due to limitation. (Para 10)

O R D E R

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. CIT(A), Bengaluru-12 dated 29.07.2025vide DIN & Order No: ITBA/APL/S/250/2025-26/1079024975(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the AY 2015-16.

2. The assessee has raised the following grounds of appeal: -

1. The appellate order passed by the learned Commissioner of Income-tax [Appeals] NFAC, Delhi passed under Section 250 of the Act dated 29/07/2025 for the impugned Assessment Year 2015-16, in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case, requires to be quashed.

2. The appellant denies himself liable to be assessed on a total income of Rs. 6,22,198/- on the facts and circumstances of the case.

3. The Order passed u/s.147 of the act is bad in law, since the order issued u/s.148A(d) dated 30.03.2022 is without jurisdiction since the Order was issued by the Jurisdictional Assessing officer [International Taxation], Ward 1[1], Bangalore, which was ought to have been issued by National Faceless Assessemt Cente in accordance with Notification No. 15/2022/F. No. 370142/2022-TPL “Faceless Jurisdiction of Incometax Authorities Scheme, 2022”, dated 28.03.2022

4. The Order passed u/s.147 of the act is bad in law, since the notice issued u/s.148 of the act dated 30.03.2022 was issued by the Jurisdictional Assessing officer [International Taxation], Ward 1[1], Bangalore, instead which was ought to have been issued by National Faceless Assessement Centre in accordance with Notification No. 15/2022/F. No. 370142/13/2022-TPL “Faceless Jurisdiction of Incometax Authorities Scheme, 2022”, dated 28.03.2022. The appellant places reliance on the following decisions -

i) Kankanala Ravindra Reddy v. ITO (2023) 156 taxmann.com 178 (Tel.)

ii) Hexaware Technologies Ltd. v. ACIT (2024) 162 taxmann.com 225 (Bom.)

iii) Jatinder Singh Bhangu (2024) 165 taxmann.com 115 (P&H)

iv) Venus Jewel v. ACIT (2024) 164 taxmann.com 414 (Bom.)

v) Paras Mahendra Shah v. UOI [2024] 165 taxmann.com 546 (Bom.)

vi) Ram Narayan Sah v. UOI [2024] 163 taxmann.com 478 (Gauhati)

vii) Navita S. Hetampuria v. Income-tax officer [2024] 165 taxmann.com 424 (Bom.)

viii) Royal Bitumen Private Limited v. ACIT [2024] 164 taxmann.com 606 (Bom.)

ix) Pravina Jagdish Patel v. Income-tax officer [2024] 164 taxmann.com 659 (Bom.)

x) Sushila Sureshbabu Malge v. Income-tax officer [2024] 164 taxmann.com 633 (Bom.)

xi) Jasjit Singh v. UOI [2024] 165 taxmann.com 114 (P & H)

xii) Govind Singh v. Income-tax officer [2024] 165 taxmann.com 113 (Himachal Pradesh)

xiii) Sandeep Kumar Gupta v. UOI [2024] 165 taxmann.com 438 (P & H)

xiv) Vidhyadhar Shetty v. Income-tax officer [2024] 165 taxmann.com 265 (Bom.)

xv) L&T Finance Ltd. v. ACIT [2024] 165 taxmann.com 331 (Bom.)

xvi) Everest Kanto Cylinder Ltd. v. DCIT [2024] 165 taxmann.com 192 (Bom.)

xvii) Ramachandra Reddy Ravikumar v. DCIT in W.P. No. 28182 of 2024 dated 28.08.2025

xviii) Dadha Pharma LLP v. DCIT in W.P. No. 35385 of 2024 and connected matters dated 24.06.2025 (Mad.)

xix) Southern Power Distribution Company of Telangana Ltd. v. ACIT (2025) 175 taxmann.com 800 (Tel.)

5. The Order passed by the learned Assessing Officer u/s.148A(d) is bad in law as the Appellant had clearly explained the source of income of Rs. 52,41,475/- which was the information mentioned by the learned Assessing officer in the notice u/s. 148A(b) and accordingly, there was no unexplained income in excess of Rs.

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2026 Supreme(Online)(ITAT) 10508

INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)Prashant Maharishi, Vice President, Keshav Dubey, Judicial MemberNikhil Chandran – AppellantVersusITO International Taxation Ward 1(1) Bengaluru – RespondentITA No.2154/Bang/2025

Reopening of assessment under Section 147/148 beyond the normal period of 3 years requires satisfaction of the threshold of Rs 50 lakhs of escaped income in the form of an asset; failure to establish this threshold renders the extended limitation period under Section 149(1)(b) inapplicable.

INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)
Prashant Maharishi, Vice President, Keshav Dubey, Judicial Member
Nikhil Chandran – Appellant
Versus
ITO International Taxation Ward 1(1) Bengaluru – Respondent
ITA No.2154/Bang/2025