Facts of the Case

  • The case pertains to AY 2017–18.
  • Reassessment proceedings were initiated by the Income Tax Department.
  • The alleged escaped income was ₹30,70,526, which is below ₹50 lakhs.
  • More than three years had elapsed from the end of the relevant assessment year.
  • The petitioner contended procedural and jurisdictional defects in reassessment initiation.

 Issues Involved

  1. Whether reassessment proceedings can be initiated when the escaped income is below ₹50 lakhs under Section 149(1)(b).
  2. Whether reassessment proceedings are valid without approval of the specified authority.
  3. Whether reassessment can continue after expiry of three years when statutory conditions are not fulfilled.

Petitioner’s Arguments

  • The reassessment proceedings lacked approval of the specified authority, rendering them invalid.
  • The alleged escaped income (₹30,70,526) was below the statutory threshold of ₹50 lakhs required under Section 149(1)(b).
  • Since more than three years had elapsed, reassessment could not be initiated unless conditions under Section 149 were strictly satisfied.

Respondent’s Arguments

  • The Revenue was unable to dispute that the escaped income was below ₹50 lakhs.
  • No counter-affidavit was filed despite opportunity granted by the Court.
  • It was conceded that if petitioner’s facts were correct, reassessment proceedings could not continue.

 Court’s Findings / Order

  • The Court accepted that:
    • Escaped income was below ₹50 lakhs
    • More than three years had elapsed
  • The statutory condition under Section 149(1)(b) was not satisfied.
  • The Court held that reassessment proceedings could not proceed further.
  • Accordingly:
    • Notice under Section 148A(b) dated 21.05.2022 was quashed
    • Order under Section 148A(d) dated 28.07.2022 was quashed
    • Consequential notice under Section 148 was also quashed

 Important Clarification

  • The judgment reinforces that:
    • Threshold of ₹50 lakhs under Section 149(1)(b) is mandatory for reassessment beyond 3 years.
    • Procedural compliance, including approval of specified authority, is essential.
    • Failure to meet jurisdictional conditions renders reassessment void.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS12052023CW56542023_143517.pdf

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