In Assistant Commissioner of Income Tax v. Brij Bhushan Gupta (ITAT Delhi, order dated 09 January 2026), the Delhi Bench of the Income Tax Appellate Tribunal examined the validity of reassessment proceedings initiated under Sections 147 and 148 of the Income Tax Act, 1961 for Assessment Years 2013-14 and 2015-16.

The Tribunal noted that the reassessment notices had been issued beyond the statutory period of three years from the end of the relevant assessment years. It was observed that, under the amended provisions of Section 149(1) applicable from 1 April 2021, reassessment beyond three years is permissible only where the Assessing Officer possesses material evidencing that income chargeable to tax, represented in the form of an asset, amounting to ₹50 lakh or more, has escaped assessment.

On facts, the Tribunal found that the reassessment proceedings were based solely on proposed disallowance of expenditure, and not on any income represented in the form of an asset as defined in the Explanation to Section 149(1). Relying on binding judicial precedents, including the decisions of the Supreme Court in Union of India v. Rajeev Bansal and the Delhi High Court in Smart Chip Pvt. Ltd. v. ACIT, ATS Township Pvt. Ltd. v. ACIT, and Ratnagiri Gas and Power Pvt. Ltd. v. ACIT, the Tribunal held that expenditure disallowance does not constitute an asset for the purposes of extended limitation.

Accordingly, the Tribunal concluded that the reassessment notices and consequent proceedings were barred by limitation and without jurisdiction. The reassessments for both assessment years were quashed, the assessee’s cross-objections were allowed, and the Revenue’s appeals were dismissed as infructuous.

 Source Link-

https://itat.gov.in/public/files/upload/1767942850-dXXeee-1-TO.pdf

 Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.