Mumbai ITAT quashes Rs 1.46 crore tax assessment for office boy
The tribunal ruled the Income Tax Department failed to validly serve the notice required to reopen the man's assessment.
The Income Tax Appellate Tribunal (ITAT) in Mumbai has quashed a reassessment order against a man who claimed to have worked as an office boy earning Rs 3,500 a month. According to a report by the Times of India, the tax department had pegged the man's total income at Rs 1,46,57,500 after linking him to a pharmaceutical business.
The department initiated proceedings after receiving information regarding transactions in a bank account, which it described as the man's proprietary concern. The Assessing Officer treated debit entries of Rs 1,27,62,500 as unexplained expenditure and credit entries of Rs 18,85,000 as unexplained income.
The man alleged that his former employer misused his signatures and KYC documents to obtain a second PAN without his knowledge. He maintained that he never operated the pharmaceutical company or undertook the transactions, having provided his documents for employment and security purposes.
In its September 21, 2026, order, the tribunal found that a notice issued under Section 148 on March 27, 2019, had not been validly served. The department had pasted the notice on a locked room in Bhiwandi, but failed to establish a connection between the man and that address.
The tribunal noted that the man's subsequent cooperation with a later show-cause notice could not retrospectively cure the failure to serve the original notice. The judges concluded that the assessment order was invalid and quashed the reassessment.
The tribunal did not decide on the allegations regarding the misuse of identity documents or the genuineness of the transactions, as the reassessment was invalidated on jurisdictional grounds.