The Delhi bench of the Income Tax Appellate Tribunal has invalidated a reassessment notice issued beyond the six-year statutory limit, ultimately exonerating Ravindra Sahu from a Rs 90 lakh tax demand over cash deposits, citing procedural lapses and jurisdictional issues.
The Delhi bench of the Income Tax Appellate Tribunal has held that a reassessment notice issued after the statutory six-year limit under section 148 of the Income-tax Act was invalid, clearing Ravindra Sahu of a tax demand tied to alleged cash deposits of Rs 90 lakh. The tribunal said the notice, dated April 3, 2022, came three days after the limitation period for assessment year 2015-16 had expired on March 31, 2022, meaning the reopening was without jurisdiction.
According to the Income Tax Department’s own guidance on reassessment, section 148 requires the assessing officer to serve a notice and record reasons before reopening a case, while section 149 sets the time limits for doing so. In cases where more than four years but not more than six years have passed, a notice can issue only if the escaped income meets the statutory threshold. The tribunal found that those safeguards did not cure a notice served outside the permitted window.
The assessing officer had reopened Sahu’s case after information surfaced about cash deposits in his bank account. When he did not respond to the statutory notices, the department added Rs 90 lakh under section 69A, which deals with unexplained money. Sahu later challenged the assessment, but his appeals before the NFAC were dismissed because of delay.
A two-member bench comprising M. Balaganesh and Sudhir Kumar accepted that the 543-day delay in filing before the NFAC resulted from a bona fide error and should be condoned. But the tribunal said there was no point sending the matter back for another round of proceedings because the reassessment itself rested on a time-barred notice. The order, pronounced in open court on August 19, 2026, brings the litigation to an end in the taxpayer’s favour.
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