The Income Tax Appellate Tribunal in Mumbai has overturned a tax demand of nearly Rs 10 crore against actor Preity Zinta, ruling that the reassessment process launched by the tax department suffered from a fundamental procedural flaw.
The order effectively pauses the entire case and hands Preity Zinta a clear advantage while the matter is sent back for fresh scrutiny.
The issue dates back to Preity Zinta’s 2016 return, where she filed as a non-resident and reported an income of Rs 46 lakh.
During an internal review, tax officials noticed a series of high-value transactions in one of her new savings accounts. That immediately triggered suspicion of undisclosed income, and the Assessing Officer reopened her case under Section 147, which deals with income escaping assessment.
Once the reassessment was launched, the numbers escalated quickly. A draft order issued on March 31, 2022 proposed revising her income to Rs 11.3 crore, a massive jump from what she had originally disclosed. Zinta challenged the proposal before the Dispute Resolution Panel, but on December 31, 2022 the panel upheld the additions. The final assessment order followed on January 23, 2023.
The department’s case hinged on activity in a Corporation Bank account she opened in January 2016. Officials found total credits and debits of about Rs 13.10 crore in that account, including a deposit of Rs 13 crore that was immediately withdrawn, leaving just Rs 10,300 as balance. The department treated Rs 10 crore of that deposit as unexplained cash credit under Section 68, assuming it to be income that had not been properly disclosed.
Preity Zinta appealed to the ITAT, arguing that the very foundation of the reassessment was weak.
The tribunal agreed. In its order dated November 17, 2025, the ITAT said both the Assessing Officer and the DRP failed to properly examine whether reopening the case was justified in the first place. Without that step, the entire chain of proceedings was compromised.
The tribunal has now asked the tax department to go back and re-evaluate the basis for reopening the assessment and then review the matter on its merits. Until that happens, the Rs 10-crore demand stands quashed.
Preity Zinta was represented by advocates Dharan Gandhi and Vinita Nara. The case now returns to the department’s court, but the actor walks away with a significant interim win that highlights how procedural errors can derail high-stakes tax battles.
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