Aero Promoters Private Limited Vs DCIT Central (ITAT Delhi)
The ITAT Delhi held that the extended limitation under Sections 149(1)(b) and 149(1A) of the Income Tax Act could not be invoked by aggregating alleged unexplained expenditure arising from two distinct transactions merely to satisfy the statutory threshold of ₹50 lakh. The reassessment proceedings were initiated beyond three years based on seized Excel sheets allegedly recording cash payments for purchase of furniture and payment of interior designing consultancy fees across AYs 2014-15, 2015-16 and 2016-17. The Assessing Officer aggregated these payments and issued notices under Section 148, while the CIT(A) upheld the reassessment and additions. The Tribunal found that Section 149(1A) permits aggregation only where escaped income relates to the same event or occasion. Since the seized material itself disclosed two separate transactions, neither individually exceeding ₹50 lakh, the statutory threshold under Section 149(1)(b) was not met. Following the Delhi High Court decision in Ganesh Dass Khanna v. ITO, the Tribunal held that the reassessment notices were barred by limitation, allowed all three appeals, quashed the notices under Section 148 and the consequential reassessment orders for AYs 2014-15, 2015-16 and 2016-17.
For invoking the extended limitation under sections 149(1)(b) and 149(1A), the statutory threshold of Rs.50 lakh must be satisfied in respect of the same transaction, event or occasion; separate transactions cannot be clubbed merely to extend the limitation for reassessment.
