DCIT Vs Ankit Gupta HUF (ITAT Delhi)
Delhi ITAT Upholds Quashing of 153C Notices Beyond 6 Years – Unless Escaped Income Exceeds ₹50 Lakh, Extended 10-Year Window Cannot Be Invoked
The Delhi ITAT dismissed the Revenue’s appeals and upheld the CIT(A)’s order annulling assessments framed u/s 153C for AYs 2014-15 and 2015-16, holding that proceedings initiated beyond six assessment years were invalid where the alleged escaped income did not cross the statutory threshold of ₹50 lakh required for invoking the extended ten-year block.
The Tribunal noted that the assessee had challenged the very jurisdiction of proceedings u/s 153C on the ground that the notices were barred by limitation under the amended provisions of sections 153A/153C. The assessee argued that for “other persons”, reopening beyond six years is permissible only where income represented in the form of assets exceeds ₹50 lakh.
The ITAT observed that the issue stood squarely covered by the Delhi High Court ruling in Ojjus Medicare Pvt. Ltd. and the coordinate bench ruling in Alok Agarwal & Sons HUF. In the present case, the satisfaction recorded by the AO pertained to alleged undisclosed income of only about ₹34.71 lakh, which was below the statutory threshold contemplated for invoking proceedings for the extended ten-year period.
The Tribunal reproduced and relied upon the Delhi High Court observations in Pratishtha Garg v. ITO explaining that while the AO may initially form a provisional opinion regarding escaped income, the satisfaction note itself must indicate reasons showing that escaped income is likely to exceed ₹50 lakh for invoking the extended period. Mere speculation or conjecture would not suffice.
Accordingly, the ITAT held that AY 2014-15 fell beyond the permissible six-year block and the conditions for extending the period to ten years were not satisfied. Since the facts for AY 2015-16 were identical, both Revenue appeals were dismissed and the assessments stood annulled.
FULL TEXT OF THE ORDER OF ITAT DELHI
