The assessee, a partnership firm, was reopened for A.Y. 2014-15 on the basis of information emanating from search proceedings in Rajendra Jain Group alleging bogus purchase entries from two concerns aggregating to Rs. 3.02 crore. The reassessment notice under section 148 was issued beyond three years from the end of the relevant assessment year. The assessee contended that for A.Y. 2014-15 the applicable law was section 149(1)(b) as substituted by the Finance Act, 2021, under which reopening beyond three years was permissible only where the Assessing Officer possessed material showing escapement of income represented in the form of an \u201casset\u201d of Rs. 50 lakh or more. The Tribunal held that alleged bogus purchases are profit and loss\/revenue items and cannot be regarded as an \u201casset\u201d unless such purchases result in a specific asset reflected in the balance sheet, which was not the Revenue\u2019s case. Following IDFC Ltd. v. DCIT \u00a0v. DCIT [2023] 155 taxmann.com 602\/459 ITR 169 (Mad( HC) \u00a0and Hexaware Technologies Ltd. v. ACIT [2024] 162 taxmann.com 225 (Bom.HC), the Tribunal held that the mandatory jurisdictional condition under section 149(1)(b) was not satisfied; therefore, the notice issued under section 148 was invalid, the reassessment proceedings were bad in law, and the assessment framed thereon could not survive. As the reassessment itself was quashed, the addition on account of alleged bogus purchases stood deleted and other issues on merits were rendered academic. \u00a0( ITA No. 6613\/Mum\/2025,dt.\u00a0 06-03-2026.)\u00a0 (A.Y. 2014-15 \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 149 : Reassessment \u2013 Time limit for notice – Notice issued beyond three years \u2013 Escaped income must be represented in the form of an asset under pre-amended section 149(1)(b) as substituted by Finance Act, 2021 \u2013 Alleged bogus purchases are revenue items and not \u201casset\u201d \u2013 Reopening invalid \u2013 Assessment quashed \u2013 Consequential addition deleted. [S. 144, 143(2), 142(1), 147, 148 , 149(1)(b) ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-58823","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fiL","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=58823"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58823\/revisions"}],"predecessor-version":[{"id":58824,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58823\/revisions\/58824"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=58823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=58823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=58823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}