Rupinder Singh Duggal Vs ITO (ITAT Ahmedabad)
The tribunal held that reassessment proceedings initiated under Section 148 were invalid as the alleged escaped income did not meet the statutory threshold prescribed under Section 149(1)(b). The Assessing Officer relied on information regarding salary, property sale, and share transactions to reopen the case, alleging escaped income exceeding ₹50 lakh. However, the tribunal found that the actual income assessed, including salary, capital gains, and disallowances, was below ₹50 lakh. It clarified that “income escaping assessment” refers to real taxable income and not the gross value of transactions. Since the jurisdictional condition of exceeding ₹50 lakh was not satisfied, the reopening itself was held to be without authority of law. Consequently, the reassessment order was quashed. As the proceedings were annulled on jurisdictional grounds, other issues raised by the assessee were not adjudicated. The appeal was allowed in favour of the assessee.
Statutory language: Section 149(1)(b) permits reopening beyond 3 years (up to 10 years) only if: Income chargeable to tax which has escaped assessment amounts to or is likely to amount to ₹50 lakh or more Meaning of “Income”-The Act uses the term “income chargeable to tax”
Facts (Transaction-wise Analysis)
The present case pertains to Assessment Year 2017–18, wherein the assessee, an individual, had not originally filed the return of income. Based on information available on the Insight Portal, the Assessing Officer formed a belief that income chargeable to tax had escaped assessment and accordingly initiated proceedings under section 147 of the Income-tax Act by issuing notice under section 148A(b).
