Threshold for Ten-Year Block extension requires material-based satisfaction; notices quashed where aggregate escaped income falls below threshold.

Whether initiation and continuation of assessment under the Fourth Proviso to the ten-year block is permissible hinges on whether the assessing officer's recorded satisfaction is supported by material demonstrating that aggregate escaped income across the relevant years meets the proviso threshold; an ipse dixit satisfaction or quantified assets/income falling below the threshold without supporting reasons fails the statutory precondition. Where the satisfaction note and material quantify aggregate undisclosed assets/income below the threshold and do not fairly indicate the ultimate computation will exceed it, notices for those years are to be quashed while revenue may re-examine if valid reasons are later recorded.

---

---

Issues: Whether initiation and continuation of assessment proceedings under section 153A/153C of the Income-tax Act, 1961 for assessment years including 2014-15 to 2016-17 is permissible where the satisfaction recorded by the assessing officer of the searched person indicates aggregate undisclosed assets/income below Rs. 50 lakhs, and whether the notices for those years are required to be quashed.

Analysis: The Fourth Proviso to section 153A requires that extension of the ten-year block operate only where the undisclosed assets or escaped income found or likely to be found in the relevant assessment years amount to or are likely to amount to Rs. 50 lakhs or more. The satisfaction recorded by the assessing officer must be based on material and reasons capable of supporting a fair assessment that the escaped income cumulatively meets the threshold, not on mere ipse dixit. Where the satisfaction relied upon by the AO of the searched person quantifies the identified assets/income at an amount below the statutory threshold and the recorded reasons do not demonstrate a fair basis for concluding that the ultimate computation is likely to exceed the threshold, the precondition in the Fourth Proviso is not satisfied. Precedents applying the proviso recognise that the condition relates to aggregate escaped income across relevant assessment years and that, if the satisfaction note and supporting material do not meet the statutory benchmark, notices for years falling within the extended ten-year block must be quashed while leaving the revenue free to re-examine if valid reasons to believe the threshold is met are subsequently recorded.

Conclusion: The notices and resultant proceedings insofar as they relate to the impugned assessment years where the recorded satisfaction and material show aggregate escaped income below Rs. 50 lakhs are quashed; the appeal is allowed in favour of the assessee.

---