Darshan Singh Bagga Vs Ward 42(2)(2) (ITAT Mumbai)
ITAT Mumbai: Reopening Beyond 3 Years Invalid Where Escaped Income below ₹50L-Notice u/s 148 Quashed
The Mumbai ITAT held that reassessment proceedings initiated beyond three years are invalid where the alleged escaped income is below ₹50 lakh, as per the amended provisions of Section 149 introduced by the Finance Act, 2021.
In this case, the AO reopened the assessment alleging escaped income of ₹2.5 lakh. However, the notice under Section 148 was issued after three years from the end of the relevant assessment year.
The Tribunal observed that as per Section 149(1)(b), reopening beyond three years is permissible only if escaped income exceeds ₹50 lakh, which was not satisfied in the present case.
Relying on the Bombay High Court ruling, the ITAT held that such reopening is time-barred and not in accordance with law.
Accordingly, the notice issued under Section 148 and the consequent assessment order were quashed, and the addition made by the AO did not survive
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the Assessee against the order dated 18.09.2025, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2019-20.
