Income chargeable to tax: reassessment invalid where escaped taxable income falls below the statutory monetary threshold, so reopening quashed.

Reassessment under section 148/147 is addressed on the basis that the test for reopening depends on the real income chargeable to tax, not the gross value of transactions; where the reassessed taxable income, after accounting for documented deductions, remains below the monetary threshold specified in the statute, jurisdiction to reopen is absent and the reassessment cannot stand. The decision quashes the reopening and the consequent assessment on that jurisdictional ground, without adjudicating subsidiary challenges.

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Issues: Whether the reassessment initiated under section 148 read with section 147 of the Income-tax Act, 1961 is valid where the alleged escaped income, construed as the real income chargeable to tax, is below the monetary threshold of Rs. 50 lakhs prescribed by section 149(1)(b) of the Income-tax Act, 1961.

Analysis: The statutory phrase "income chargeable to tax which has escaped assessment" must be understood as the real income liable to tax and not the gross value of underlying transactions. The information relied upon showed aggregate transaction values, but the assessed income as determined in reassessment (salary taxed and capital gains additions after accounting for available documentation and deductions) resulted in total assessable income below Rs. 50 lakhs. The monetary threshold in section 149(1)(b) acts as a jurisdictional limit for reopening under section 148; where the escaped income, properly measured as taxable income, does not meet that threshold, jurisdiction to reopen is not established. Because jurisdiction under section 148 is lacking on this ground, the reassessment order founded on that exercise of jurisdiction cannot stand. Other grounds raised by the appellant were not adjudicated in view of the quashing of the reassessment on jurisdictional grounds.

Conclusion: The reassessment proceedings initiated under section 148 are quashed for lack of jurisdiction as the escaped income does not satisfy the monetary threshold in section 149(1)(b); appeal allowed in favour of the assessee and the reassessment order set aside.

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