Facts of the Case

The petitioner filed a writ petition challenging:

  • Notice dated 7 April 2021 issued under Section 148A(b)
  • Order dated 29 July 2022 passed under Section 148A(d)
  • Reassessment notice dated 29 July 2022 under Section 148 for AY 2013–14

The reassessment was initiated alleging escaped income of ₹45,34,639, which is below ₹50 lakh.

Issues Involved

  1. Whether reassessment proceedings initiated beyond three years are valid when the alleged escaped income is less than ₹50 lakh.
  2. Whether the notice under Section 148 violates Section 149(1)(b) and CBDT Instruction No. 01/2022.

Petitioner’s Arguments

  • The reassessment is barred by limitation under Section 149(1)(b).
  • The alleged escaped income is ₹45,34,639, i.e., below ₹50 lakh threshold.
  • Even the impugned order acknowledges that the income is below ₹50 lakh.
  • Therefore, issuance of notice under Section 148 is illegal.

Respondent’s Arguments

  • The Revenue accepted notice through counsel.
  • It was not disputed that the alleged escaped income was below ₹50 lakh.

Court Findings / Order

  • The Court held that reopening was in violation of CBDT Instruction No. 01/2022.
  • As per the instruction, notices for AY 2013–14 cannot be issued unless escaped income is ₹50 lakh or more.
  • Since the threshold was not met, the reassessment was invalid.

Final Order

  • The impugned order under Section 148A(d) was quashed.
  • The writ petition was disposed of in favour of the petitioner.

Important Clarification

  • The ₹50 lakh threshold under Section 149(1)(b) is mandatory for reopening beyond three years.
  • CBDT Instructions are binding on tax authorities.
  • Reassessment proceedings contrary to CBDT instructions are liable to be quashed.

Sections Involved

  • Section 148 – Income escaping assessment
  • Section 148A(b) – Inquiry before issuance of notice
  • Section 148A(d) – Order for reopening
  • Section 149(1)(b) – Time limit for notice
  • CBDT Instruction No. 01/2022 dated 11 May 2022

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3833-DB/MMH22092022CW137332022_173026.pdf

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