The ITAT has established that an amount exceeding ₹50 lakhs must be present for reopening an assessment after three years, invalidating prior approvals under Section 151.
ITAT Sets Benchmark for Reopening Assessments
The Income Tax Appellate Tribunal (ITAT) has ruled that for the reopening of an assessment beyond three years, the Income Tax Department must demonstrate that the escaped income exceeds ₹50 lakhs. The tribunal found that the prior approvals under Section 151 were granted in violation of Section 149(1)(b) and subsequently invalid.
This decision reaffirms the necessity for substantial evidence before tax authorities can undertake reopening assessments, setting a significant standard for future cases.
Tax practitioners should be aware that this ruling can provide grounds for challenging reopening notices in similar circumstances, thereby offering a protective framework for taxpayers against potentially unwarranted review procedures.
Citations
- ITAT Order (2026)
