The Income Tax Appellate Tribunal (ITAT) Mumbai Bench has quashed a reassessment notice for Assessment Year 2017-18, declaring it time-barred under Section 149 of the Income Tax Act, 1961. The notice, issued on 23 July 2022, claimed an escaped income of ₹36.03 lakh. The Tribunal found that the reassessment proceedings were invalid due to the lapse of the limitation period.
The assessee challenged the reassessment proceedings launched by the tax authorities for the assessment year 2017-18. The ITAT Mumbai Bench allowed this challenge, holding that the reassessment notice was time-barred. The Tribunal emphasized that any reassessment on an amount below ₹50 lakh must observe the limitation period specified in Section 149; otherwise, the notice has no legal force.
Ex-Peon Wins Against ₹1.5 Crore Tax Demand After Alleged KYC Misuse A former Mumbai office boy has won a major ITAT battle after the tribunal quashed a reassessment that added nearly ₹1.5 crore to his income from transactions linked to a pharmaceutical firm. He alleged his former employer misused his KYC documents and signatures (handed over for a ₹3,500-a-month job in 2009) to set up Kingsy Pharma and a bank account without his knowledge. The ITAT ruled in his favour due to invalid service of the notice but did not examine the KYC misuse claim. Taxpayers are advised to monitor AIS/AIR on the tax portal and report any suspicious activity to police immediately. L https://t.co/zxly5WoAZ0
In reaching its decision, the Tribunal relied on the Supreme Court's decision in NTPC Vs CIT and a Bombay High Court judgment in Ramesh Bachulal Mehta Vs ITO. These precedents established that the limitation period in Section 149 is mandatory and cannot be extended. The Tribunal's ruling reinforced that reassessment cannot be enforced after the statutory window closes.
Separately, the Tribunal examined another reassessment notice concerning ₹26 lakh of cash deposits.
Separately, the Tribunal examined another reassessment notice concerning ₹26 lakh of cash deposits. This notice was scrutinized under Section 151 of the Income Tax Act, which requires that any reassessment notice be properly sanctioned by a competent authority. The Tribunal found that the Principal Commissioner of Income Tax-1, Thane was not the competent authority under Section 151(ii), rendering the notice void ab initio for lack of valid statutory sanction.
Man sold his house and bought a Rs 1.10 crore flat jointly with wife; income tax department denies Rs 55.48 lakh capital gains exemption for half the amount, but ITAT Mumbai gives full relief Read More at: https://t.co/aO096VMYj5 https://t.co/aP9dmd8fdn
On 23 September 2025, the ITAT Mumbai Bench delivered its order, quashing both reassessment notices. The first notice was dismissed as time-barred, while the second was invalidated for lacking proper statutory approval. These decisions highlight the importance of procedural compliance in tax reassessment proceedings and the strict application of limitation periods in tax law.