ACIT Vs Rajiv Gupta (ITAT Hyderabad)
The Revenue filed an appeal before the ITAT Hyderabad challenging the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 24 December 2024, relating to Assessment Year 2016-17. The dispute arose from the reassessment proceedings initiated under Section 147 read with Section 144B of the Income Tax Act, 1961, through a notice under Section 148 issued on 30 July 2022. The assessee had originally filed his return of income on 8 October 2016 declaring ₹90,61,122, and the case was selected for scrutiny under Section 143(2).
During scrutiny, the Assessing Officer observed that the assessee had traded in shares of M/s Kushal Tradelink Limited and declared Long Term Capital Gains (LTCG) of ₹19,72,828, claimed exempt under Section 10(38). The AO rejected the exemption claim and treated the sale proceeds of ₹19,30,750 as unexplained cash credit under Section 68. Additionally, ₹59,185 was added under Section 69C on account of alleged commission expenditure for obtaining an accommodation entry. The reassessment order determined total income at ₹1,10,51,057.
The assessee challenged the reassessment before the CIT(A), raising the foundational issue of jurisdiction. The contention was that the escaped income was below ₹50 lakh and therefore, under the amended provisions of Section 149(1)(b), no notice under Section 148 could be issued after the expiry of three years from the end of the relevant assessment year. Since the relevant assessment year was 2016-17, the three-year window expired on 31 March 2020. The notice issued on 30 July 2022 was, therefore, claimed to be time-barred.
