Neha Gupta Vs ACIT (ITAT Delhi)
Section 153C Proceedings Quashed as Time-Barred and Below ₹50 Lakh Threshold: ITAT Delhi Follows Delhi High Court
The Delhi Bench of the ITAT allowed the assessee’s appeals for AYs 2014-15 and 2015-16 and quashed the notices issued under section 153C as well as the consequential assessment orders, holding them to be barred by limitation and without jurisdiction.
The Tribunal noted that the satisfaction note was recorded on 23.06.2022 and notice under section 153C was issued on 29.06.2022. On these dates, the impugned assessment years fell beyond the permissible block of six preceding assessment years as contemplated under section 153C. Further, the satisfaction note itself recorded alleged escaped income of only ₹2.47 lakh and ₹1.52 lakh for AYs 2014-15 and 2015-16 respectively, which neither individually nor cumulatively crossed the statutory threshold of ₹50 lakh prescribed under the Fourth Proviso to section 153A.
Relying heavily on the Delhi High Court judgments in Vartex Image Creation Pvt. Ltd. and PCIT v. Ojjus Medicare Pvt. Ltd., the ITAT held that in the absence of a recorded satisfaction that the escaped income “amounts to or is likely to amount to” ₹50 lakh or more, invocation of extended jurisdiction under section 153C is impermissible. Since this jurisdictional defect went to the root of the matter, the notices and assessments were held to be void ab initio.
Accordingly, the ITAT quashed the notices issued under section 153C and the assessment orders passed pursuant thereto. All other grounds were rendered academic. The appeals were allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
These two appeals have been preferred by the assessee against the common order dated 28.04.2025 of the Commissioner of Income Tax (Appeals)-25, New Delhi-110055 [hereinafter referred to as the ‘Ld. CIT(A)], pertaining to Assessment Years 2014-15 and 2015-16, arising out of respective Assessment orders both dated 31.03.2024 passed under Section 153C of the Income-tax Act, 1961(hereinafter referred to as ‘the Act’) passed by the ACIT, Central Circle-32, Noida (hereinafter referred to as the ‘AO’). Since the issues involved in both the appeals of the same assessee are related, they are disposed of by this consolidated order, for the sake of convenience and brevity.
