ITAT Kolkata rules tax reassessment after three years invalid for low escaped income

The Income Tax Appellate Tribunal in Kolkata recently addressed a dispute concerning the statutory time limits for reopening past tax assessments. The bench evaluated proceedings initiated beyond the standard three-year window under Section 149(1)(b) of the Income Tax Act. It was established that the alleged escaped income in this specific case amounted to only ₹20 lakh.

The tribunal held that initiating reassessment beyond the three-year period requires the escaped income to meet or exceed the statutory threshold of ₹50 lakh. Because the disputed amount fell significantly short of this mandatory limit, the extended reassessment action could not be sustained in law. This decision reinforces statutory protections for taxpayers against delayed reopening of completed assessments.

Tax professionals handling similar cases should review assessment notices issued past the three-year mark to verify if the alleged escaped income satisfies the ₹50 lakh threshold. Assessees receiving comparable notices can rely on this ruling to challenge jurisdiction before appellate authorities.