Shivalik Packaging Industries Vs ACIT (ITAT Delhi)
Delhi ITAT: Reassessment Beyond Three Years Invalid Where Final Escaped Income Is Below ₹50 Lakh Threshold under Section 149(1)(b)
The Delhi ITAT quashed the reassessment proceedings for AYs 2017-18 to 2019-20, holding that section 149(1)(b) does not permit reopening beyond three years unless the income that has actually escaped assessment and is represented in the specified forms amounts to ₹50 lakh or more. Although the Assessing Officer had recorded reasons alleging escapement of income exceeding ₹1.52 crore on account of unaccounted sales while issuing notice under section 148, the reassessment ultimately resulted in additions of only ₹3.65 lakh (AY 2017-18), ₹33.65 lakh (AY 2018-19), and ₹1.13 crore (AY 2019-20), with the first two years falling below the statutory threshold. Following the Bombay High Court’s decision in Naresh Balchandrarao Shinde v. ITO and the Mumbai ITAT rulings in Pankaj Chandrakant Pimple v. International Tax and Krishna Deep Builders v. ITO, the Tribunal held that where the income ultimately found to have escaped assessment is below ₹50 lakh, the jurisdictional condition prescribed under section 149(1)(b) is not satisfied, rendering the notice issued beyond three years invalid. Accordingly, the reassessment orders for AYs 2017-18 to 2019-20 were quashed. In respect of AYs 2020-21 to 2023-24, where the CIT(A) had dismissed the appeals for non-prosecution, the Tribunal set aside the appellate orders and restored the matters to the CIT(A) for fresh adjudication after providing adequate opportunity of hearing.
