ITAT Strikes Down Reassessment: Rs50 Lakh Threshold Not Met for Late Notice [Read Order]

The Income Tax Appellate Tribunal (ITAT) Pune Bench has quashed a reassessment proceeding initiated by the Income Tax Department, ruling that the tax effect in the case did not meet the Rs 50 lakh threshold required for reopening past cases. The decision came in response to an appeal filed against a late reassessment notice, which the tribunal found unsustainable under the current monetary limits set by the Central Board of Direct Taxes (CBDT).

Intime Vanijya Private Limited, appellant-assessee challenged the reopening of its assessment for the financial year 2013-14. The assessing officer had issued a notice under Section 148 of the Income Tax Act, 1961, seeking to add Rs 25.80 lakh to the company’s income under Section 68, treating certain transactions as unexplained cash credits. However, the National Faceless Appeal Centre (NFAC) had earlier deleted the addition, observing that the department failed to prove the transactions were accommodation entries.

Complete Guide to REASSESSMENT u/s 148 of the Income Tax Act, 1961 - CLICK HERE

The Revenue then appealed before the ITAT, seeking to overturn the CIT(A) order. However, the tribunal noted that the disputed tax amount was only Rs 7.97 lakh, significantly below the Rs 50 lakh threshold prescribed under the CBDT’s latest circular. The circular mandates that appeals should not be filed if the tax effect is below the specified limit, unless exceptional circumstances apply.

The ITAT also acknowledged the Revenue’s delay of 153 days in filing the appeal but condoned it, accepting the department’s explanation that officials were preoccupied with reassessment proceedings, audits, and demand collection. Despite condoning the delay, the tribunal dismissed the appeal, stating that the tax effect was insufficient to justify further litigation. The bench clarified that the legal issues raised in the case remain open for examination in future proceedings if the matter resurfaces.

Step by Step Guide of Preparing Company Balance Sheet and Profit & Loss Account CLICK HERE

The order was pronounced by Dr. Manish Borad, Accountant Member. The decision reinforces the binding nature of CBDT’s monetary limits on tax litigation, ensuring that only high-value disputes proceed to appellate stages. The tribunal’s ruling brings finality to the case, relieving the assessee from further litigation on the matter.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates