Sarabjit Singh Bedi Vs DCIT (ITAT Delhi)
Reassessment Beyond 3 Years Quashed Where Escapement Below ₹50 Lakh – ITAT Delhi
The Delhi Bench of the ITAT quashed the reassessment proceedings for AY 2017-18, holding that the notice issued under section 148 was without jurisdiction as it violated the mandatory conditions of section 149 of the Income-tax Act. The notice was issued on 31.03.2023, i.e. beyond three assessment years from the end of AY 2017-18.
The Tribunal noted that for reopening beyond three years (up to ten years), section 149(1)(b) mandates that the alleged income escaping assessment must exceed ₹50 lakh. In the present case, the Assessing Officer himself recorded that the alleged escapement was only ₹35 lakh, which is below the statutory threshold. The Revenue’s argument that the cumulative impact for multiple years should be considered was rejected, as even at the stage of seeking approval, the AO had proceeded year-wise and not on a cumulative basis.
Relying on binding Delhi High Court precedents, the ITAT held that the assumption of jurisdiction was vitiated at inception, rendering the reassessment proceedings void ab initio. Accordingly, the notice under section 148 and the consequent reassessment order were quashed, and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 28.05.2025 of the Commissioner of Income-tax (Appeals)-27, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeals No: Delhi CIT(A)-27//11175/2016-17 arising out of the appeal before it against the order dated 25.08.2023 passed u/s 147 r.w.s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the ACIT, Central Circle-20, Delhi (hereinafter referred to as the Ld. AO) for AY: 2017-18.
