Big Cash Deposit? 1 Deadline Can Save Your Tax Case

A retired teacher deposited ₹1.33 crore in cash but never filed an ITR. The tax department reopened his case — but lost, because the reassessment notice was issued after the legally allowed time limit had expired.

Here's what happened: A retired teacher deposited ₹1.33 crore in cash and did not file an income tax return, triggering a notice from the tax department to reopen his assessment.. ITAT Bangalore ruled in the taxpayer's favour — not on the merits of the cash deposit, but because the reassessment notice was issued after the legally permitted limitation period had already expired.. Under the Income Tax Act, reassessment notices beyond 3 years (or 10 years for escaped income above ₹50 lakh) are invalid, and courts have consistently quashed such time-barred notices..

What you should do: Check the date on any old reassessment or reopening notice you receive — compare it against the 3-year and 10-year limitation periods under Section 147/148 of the Income Tax Act.. File a written objection with the Assessing Officer immediately if the notice appears time-barred — do this before responding to any substantive questions about your income or deposits.. Keep records of all large cash deposits (source, occasion, savings history) for at least 6 years, so you can defend any valid reassessment that does fall within the permitted window..

Pro tip: Even if you have undisclosed income, a notice issued after the limitation period expires is legally void — raise a 'time-barred' objection first, before explaining any funds.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.