Validity of reopening of assessment: 10-year limitation under new tax regime not available where escaped income below threshold

Validity of reopening of assessment addressed the temporal limitation for reassessment; the new 10-year time limit under the reformed tax regime does not apply where the income said to have escaped assessment falls below the prescribed high-value threshold, and consequently the petition challenging reopening was dismissed on that short point while broader legal questions remain undecided.

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Issues: Whether the new 10-year limitation period under Section 149(1)(b) of the Income-tax Act, 1961 applies where the income which has escaped assessment is less than Rs.50 lakh.

Analysis: The Court considered the threshold condition in Section 149(1)(b) of the Income-tax Act, 1961 prescribing the new 10-year time limit and applied that statutory criterion to the facts before it. The Court observed that where the income escaping assessment is below Rs.50 lakh the statutory requirement for invocation of the extended 10-year period is not satisfied, and therefore the extended limitation cannot be applied.

Conclusion: The new 10-year limitation period under Section 149(1)(b) of the Income-tax Act, 1961 does not apply where the income which has escaped assessment is less than Rs.50 lakh; conclusion is in favour of the assessee.

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