Deepak Nagar Vs ACIT (Delhi High Court)
The Delhi High Court examined the validity of a reassessment notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2016–17. The petitioner challenged the notice dated 31.08.2024 and subsequent proceedings, arguing that the initiation of reassessment lacked the foundational jurisdictional requirement of the existence of an “asset” exceeding ₹50 lakh, as mandated under the proviso to Section 149(1) of the Act. It was contended that the reasons recorded by the Assessing Officer did not indicate the existence or creation of any such asset.
The respondent argued that the assessment proceedings had already concluded with an order dated 31.03.2026 and that the petitioner should pursue alternative remedies. It was also submitted that the limitation issue was not raised before the Assessing Officer. However, the Court held that limitation is a jurisdictional issue and can be examined even if not raised earlier, particularly when the writ petition was filed before completion of the assessment proceedings.
The Court relied on its earlier judgment, which clarified that the extended reassessment period of ten years applies only where income escaping assessment is represented in the form of an “asset,” such as immovable property, shares, deposits, or similar categories. In the present case, the reasons recorded referred only to unexplained expenditure and did not mention any asset.
