Reopening jurisdiction limited by statutory escaped income threshold; reopening quashed where escaped income falls below the threshold.

Whether the assessing officer validly reopened assessment under section 148 read with 148A turns on the statutory time bar in section 149(1)(b): reopening beyond three years is permissible only where escaped income is likely to meet the specified monetary threshold. Applying that statutory threshold to the assessed escaped income in this matter, the assumption of jurisdiction was impermissible and the reopening could not be sustained; related challenges to a deduction disallowance became academic once the reopening was quashed and the appeal allowed in favour of the assessee by ITAT.

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Issues: Whether the Assessing Officer validly assumed jurisdiction to reopen the assessment under section 148 read with section 148A of the Income-tax Act, 1961 for assessment year 2016-17 where the income alleged to have escaped assessment amounts to Rs. 48,53,282 (below Rs. 50 lakh) and more than three years have elapsed.

Analysis: The statutory bar in section 149(1)(b) of the Income-tax Act, 1961 precludes issuance of notice under section 148 after three years from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment is likely to amount to Rs. 50 lakh or more. The assessed escaped income in the present case is Rs. 48,53,282, which is below the Rs. 50 lakh threshold. Reliance is placed on the decisions of the jurisdictional High Court in Sanath Kumar Murali and Pramila Mahadev Tadkase, which apply section 149(1)(b) to hold that no action beyond three years is permissible unless the escaped income meets or exceeds Rs. 50 lakh. Applying that legal framework to the present facts the assumption of jurisdiction under section 148 read with section 148A is not permissible, and the reopening proceedings cannot be sustained. The related contention on disallowance of deduction under section 80P(2)(a)(i) becomes academic once the reopening is quashed.

Conclusion: The reopening of assessment under section 148 read with section 148A of the Income-tax Act, 1961 is invalid because the escaped income (Rs. 48,53,282) is below the Rs. 50 lakh threshold in section 149(1)(b); appeal allowed in favour of the assessee and the proceedings quashed.

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