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Judgment
PER SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER:
This appeal filed by the assessee for assessment year 2016-17 arises against Commissioner of Income Tax(Appeals)-30 (for short, “CIT(A)”), Delhi’s DIN & order No. ITBA/APL/M/250/2025-26/1077242955(1), dated 20-Jun-2025, involving proceedings u/s 147/144 of the Income Tax Act, 1961; hereinafter referred to as, ‘the Act’.
Heard both the parties. Case file perused.
We advert to the first and foremost legal issue between the parties regarding validity of the impugned reopening itself. We wish to make it clear that the assessment year before us herein is A.Y. 2016-17. And that the learned assessing authority appears to have set into motion the impugned section 148 proceedings against the assessee’s vide notice issued on 31.03 2023 i.e., admittedly issued beyond a period of three years from the end of the relevant assessment year A.Y. 2016-17. There is hardly any dispute between the parties that section 149(1)(b) of the Act, stipulates such a time limitation for those assessments wherein the income escaping assessment, as income escaping such re-openings, wherein, the income escaping assessment amounts to or likely to amount to rupees 50 lakhs, or more; as the case may be.
It is in this factual backdrop that we now proceed to deal with the relevant factual matrix regarding fulfilment of the preceding statutory condition in the assessee’s case.
We noticed with the able assistance coming from both the parties that the learned Assessing Officer appears to have alleged escapement of income of Rs. 55, 22,250/- wherein he had picked up the assessee’s repayments amounting to Rs. 15,20,250/- against opening balance of Rs. 15 Lakhs involving M/s Mysore Finlease Private Limited. This being the clinching factual position, we fail to understand as to how such an opening balance in the assessee’s case could be termed as an instance of income escaping assessment for the relevant previous year being the closing figure of the preceding assessment year, not liable to form subject matter of section 69 addition in light of Commissioner of Income Tax vs. M/s. Usha Stud & Agricultural Farms Pvt. Ltd (2008) 301 ITR 384 (Delhi). We further wish to emphasize here that the moment we exclude the aforesaid opening balance of Rs. 15 lakhs, the assessee’s alleged income escaping assessment comes to less than Rs. 50 lakhs which could not be held as sustainable in law, not only in light of section 149(1)(b) but also going by (2023) 451 ITR 149 (Bombay) Naresh Balachander Rao Shinde vs ITO, settling the issue against the department as under:
We adopt the their lordships above extracted detailed reasoning, mutatis mutandis, to quash the impugned reopening as in violation of section 149(1)(b) of the Act in very terms.
All other remaining pleadings between the parties on merits stand rendered academic.
This assessee’s appeal is allowed.