Pankaj Suresh Rach Vs ITO (ITAT Mumbai)
ITAT Mumbai held that normal period of limitation i.e. 3 years will apply in case of reopening of assessment where escapement of income was below Rs. 50 Lakhs and extended period of 10 years will apply only in case of concealment of income of Rs. 50 Lakhs or more.
Facts- On the basis of specific information received from the office of Pr. CCIT, Mumbai with reference of DIT (I&CI), Mumbai, letter date 25/03/2019, that assessee had, during the year under consideration sold the immovable property at a consideration of Rs.48,00,000/- below the stamp duty value of Rs. 57,01,500/- in violation of Section 50C of the Act. After recording the reasons for re-opening and after obtaining necessary approval from appropriate authorities, assessment was re-opened vide issuance of notice u/s 148 of the Act on 01/05/2021.
The bone of contention is the sanction accorded u/s 151 of the Act. As the assessment was reopened beyond three years, sanction is required from Pr. CCIT whereas in the case of assessee, sanction has been obtained from Pr. CIT.
Conclusion- Hon’ble Delhi High Court in the case of Ganesh Dass Khanna vs. ITO has held that one gets upon a holistic reading of the backdrop in which the new regime for reopening assessments was enacted is that where escapement of income was below Rs. 50 lakhs, the normal period of limitation, i.e., three (03) years was to apply. In comparison, the extended period of ten (10) years would apply in serious tax evasion cases where there was evidence of concealment of income of Rs. 50 lakhs or more in the given period.
