Income Tax Section 149: Escaped Income Refers to Real Income, Not Gross Transactions
The ITAT Ahmedabad held that to reopen an assessment on the grounds of income escapement, the alleged amount of escapement should be within the legal minimum limit required for reopening the cases beyond three years under Section 149(1)(b). The limit is Rs 50 lakh.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad “SMC” Bench, has announced its decision on an appeal filed by Rupinder Singh Duggal against the Income Tax Officer, challenging an order passed by the CIT(A), NFAC Delhi, on September 15, 2025. The case concerns the Assessment Year 2017-18. The judgement was delivered on March 16, 2026. The impugned order had confirmed additions made to the assessee’s income.
The assessee did not file his income tax return (ITR) for the year in question, despite earning a salary of Rs 10.49 lakh, and he also sold one of his immovable properties worth Rs 32 lakh. Also, the assessee had purchased equity shares of Rs 14.42 lakh and sold shares of Rs 12.54 lakh. In conclusion, the tax authorities issued a show cause notice (SCN) to the assessee under Section 148A(b) of the Act. In reply to the notice, the assessee furnished relevant documents explaining the sources of the same, like copies of Form 16, copies of the Sale Deed, and the Purchase Deed. However, the tax authorities issued an order dated March 12, 2024, alleging that the assessee had escaped income of Rs 69.49 lakh and also issued another notice.
In response, the assessee filed its Income Tax Return (ITR), declaring a total income of Rs 8.98 lakh. However, the tax officer completed the assessment, making various additions to the assessee’s income, and declared the total income at Rs 29.92 lakh. The aggrieved assessee filed an appeal before the ITAT Ahmedabad, arguing the reassessment was invalid because the alleged amount of income escapement was within the statutory minimum limit required for reopening the cases beyond three years under Section 149(1)(b), i.e., Rs 50 lakh. The tribunal endorsed the raised assessee’s argument and set aside the entire reassessment proceedings. Allowed the appeal.
Citation: Rupinder Singh Duggal Vs ITO (ITAT Ahmedabad); ITA No: 1921/Ahd/2025; 16/03/2026; 2017-18
