Case Law Details
Davies Manuel Vs ITO (Kerala High Court)
Introduction: The recent judgment by the Kerala High Court in the case of Davies Manuel vs. Income Tax Officer (ITO) delves into the applicability of the limitation period under Section 149(1)(a) of the Income Tax Act when the escaped income exceeds Rs.50 lakhs. This article provides a comprehensive overview of the court’s decision and its implications.
Detailed Analysis: Davies Manuel, an individual assessee under the Income Tax Act, faced scrutiny for not filing his income tax return for the assessment year 2016-17. The assessing officer noted cash deposits of over Rs.50 lakhs in Manuel’s bank accounts, leading to the reopening of his case under Section 147 of the Income Tax Act.
Manuel argued that the proceedings initiated under Section 148A were barred by limitation as his income did not exceed Rs.50 lakhs. However, the Income Tax Department contended that the cash deposits amounted to around Rs.76 lakhs, justifying the reopening of the assessment after three years.
The court emphasized that the applicability of the limitation period under Section 149(1)(a) hinges on whether the escaped income exceeds Rs.50 lakhs. In Manuel’s case, where the alleged escaped income surpassed this threshold, the 3-year limitation period was deemed irrelevant.
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