A notice for reassessment for the assessment year 2015-16 issued after 31.03.2022 is barred by limitation, as the first proviso to section 149(1) of the Income Tax Act prohibits the application of the extended ten-year limitation to proceedings already time-barred under the pre-amendment regime.

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee are directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 15.12.2025 for Assessment Years 2015-16

2. Brief facts of the case are that the Assessee is an individual and a resident assessee. For the Assessment Year (AY) 2015-16, the Assessee did not file her return of income u/s. 139 of the Income tax Act, 1961 (“the Act”). Based on information available with the Income Tax Department, proceedings for reopening were initiated on the ground that certain financial transactions were undertaken by the Assessee during the relevant previous year. As per such information, the Assessee had allegedly cash deposits aggregating to Rs.70,50,000/- in bank accounts, investments in time deposits amounting to Rs.45,60,170/-, and interest income of Rs.62,757/-. Accordingly, a notice u/s. 148 of the Act was issued on 02.04.2022. In response, the Assessee filed her return of income on 26.02.2024 declaring a total income of Rs.1,35,027/-. During reassessment proceedings, notices u/s. 143(2) and 142(1) were issued and complied with. Upon verification, the Assessing Officer (AO) observed that actual cash deposits in the Canara Bank account were Rs.35,25,000/- (and not Rs.70,50,000/- as initially reported), time deposits were correlated with identifiable cash deposits, and cash deposits of Rs.1,50,000/- in IDBI Bank were satisfactorily explained. With respect to the cash deposit of Rs.35,25,000/- in Canara Bank, the Assessee explained that the source was withdrawals made from the bank account of her husband, who was employed in the UAE. The AO accepted the explanation to the extent of Rs.21,00,000/- but treated the balance amount of Rs.14,25,000/- as unexplained cash u/s. 69A of the Act, primarily on the ground that there was a time gap between withdrawals and redeposit, and hence the availability of cash on hand was not substantiated. Accordingly, an assessment order dated 15.03.2024 was passed u/s. 147 read with section 144B determining total income at Rs.15,60,027/-.

3. Aggrieved, the Assessee preferred an appeal before the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre [CIT(A)], challenging validity of reopening u/s. 148 on grounds of jurisdiction and limitation and addition of Rs.14,25,000/- u/s. 69A of the Act.

4. The ld.CIT(A) upheld the reopening by observing that at the stage of section 148A proceedings, escapement was quantified at Rs.1,16,72,927/- and since the escaped income exceeded Rs.50,00,000/-, extended limitation u/s. 149(1)(b) applied and the notice was within time. On merits, the ld.CIT(A) also upheld the addition made by the AO.

5. Aggrieved by the said order, the Assessee is in further appeal before the Tribunal. The ld.AR for the Assessee vehemently challenged both the jurisdiction as well as the addition on merits. It was submitted that section 148A prescribes a mandatory procedure requiring conduct of enquiry, grant of opportunity of hearing, consideration of assessee’s reply, and passing of a reasoned order u/s. 148A(d). The ld.AR submitted that the AO failed to discharge this statutory obligation and merely relied upon unverified information available on the Insight portal without independent application of mind. It was further contended that the information relied upon contained duplicative and repetitive entries. Even the AO, in the assessment order acknowledged duplication in reported transactions. No verification or reconciliation was carried out prior to passing the order u/s. 148A(d) and the order u/s. 148A(d) is a mechanical reproduction of the show cause notice and is a no