ACIT Vs Brij Bhushan Gupta (ITAT Delhi)
Expenditure Is Not an ‘Asset’: ITAT Quashes Reassessments for AYs 2013-14 & 2015-16 as Time-Barred
The Delhi Bench of the Income Tax Appellate Tribunal allowed the assessee’s cross-objections and quashed the reassessment proceedings for AYs 2013-14 and 2015-16, holding that the notices issued under section 148 were barred by limitation under the post-Finance Act, 2021 regime. Consequently, the Revenue’s appeals were dismissed as infructuous.
For AY 2015-16, the Tribunal noted that the Revenue had conceded before the Supreme Court (in UOI v. Rajeev Bansal) that all notices issued on or after 01.04.2021 for that year were required to be dropped as they could not be completed within the time permitted under TOLA, 2020. Following this binding position, the Tribunal allowed the assessee’s cross-objection and set aside the reassessment.
For AY 2013-14, the Tribunal examined section 149(1) as amended and held that after three years, reassessment is permissible only if the AO possesses material showing escaped income represented in the form of an “asset” of ₹50 lakh or more. The case involved disallowance of expenditure, which does not fall within the statutory definition of “asset”. Relying on the Delhi High Court’s ruling in Smart Chip Pvt. Ltd., and other jurisdictional precedents, the Tribunal held that expenditure cannot be equated with an asset to trigger the extended limitation.
Accordingly, the Tribunal set aside the impugned notices and reassessment proceedings for both years, allowed the assessee’s cross-objections, and dismissed the Department’s appeals in entirety
FULL TEXT OF THE ORDER OF ITAT DELHI
