A notice issued under Section 148 for reopening an assessment beyond the three-year statutory period is invalid and void ab initio if the alleged escaped income is less than the Rs. 50 Lakh threshold required for extended time limits.

PER PAWAN SINGH, JUDICIAL MEMBER:

1. This appeal by assessee is directed against the order of Ld. CIT(A) / NFAC dated 31.10.2025 for assessment year (A.Y.) 2016-17. The assessee has raised following grounds of appeal;

i. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in appreciating that the notice u/s 148 and order u/s 148A(d) needs to be issued by Faceless Assessing Officer. However, in the current appeal the same has been issued by the Jurisdictional Assessing Officer and hence thus the notice u/s 148 and the order u/s 148A(d) are bad in law and the whole proceeding needs to be quashed.

ii. On facts and in circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in upholding the issuance of notice u/s 148 dated 28.03.2023 as the same was without jurisdiction and barred by limitation of time, thereby rendering the assessment order passed by the Learned Assessing Officer as invalid and bad in law.

iii. On facts and in circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in upholding the reopening of the assessment without appreciating the time limit provided u/s 149(1)(a) as the income which is alleged to have escaped the assessment is Rs. 17,88,292/- (below Rs. 50 Lakhs).

iv. On facts and in circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in ascertaining the share of the appellant in the property, without considering the submissions made by the appellant. The actual share of the appellant is 1/3rd of the total amounting to Rs. 17,88,292 on the basis of Index-2 dated 18.04.2015 filed in response to SCN u/s 148A(b).

v. On facts and in circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in upholding that objections can be raised only before the Order u/s 148A(d) and issuance of Notice u/s 148 without appreciating that the order passed u/s 148A(d) of the Act is neither final assessment order nor creates any demand and remains subject to final Assessment Order to be passed. Reliance is placed on judgements of various high courts in writ petitions filed by various appellants.

vi. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in upholding the additions of Rs. 17,88,292 u/s 69A of the Act made by the Ld. Assessing Officer on account of unexplained investment without appreciating that the source of investment was accumulated savings from the past incomes.

2. Rival submissions of both the parties have been heard and record perused. The Ld. Authorized Representative (in short ‘AR’) of the assessee submits that the case of the assessee for AY 2016-17 was reopened by issuing show cause notice under Section 148 dated 28.03.2023. Admittedly, the case of the assessee was reopened after three years from the end of the relevant assessment year. The escaped income was less than Rs. 50.00 Lacs, therefore, notice under section 148 is barred by limitation period prescribed under section 149(1)(b) and assessment completed pursuant thereto is invalid. While explaining the facts, the Ld. AR of the assessee submits that the notice under section 148(A)(b) dated 19.01.2023 was served upon the assessee. The said notice was based on information with the AO in ITD system that the assessee had made a transaction of purchase of immovable property more than Rs.50.00 Lacs. In response to such show cause notice, the assessee filed his reply on 20.02.2023, copy of acknowledgement of reply by ITB Portal is filed on record. In the reply, the assessee explained the fact that the assessee along with two other co-owner have purchased immovable property at Rs. 50,80,777/-. All three co-owner paid stamp duty for registration of transaction at Rs. 2,54,100/- and paid regis