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An analysis by Economic Laws Practice (ELP), Taxand India
The Delhi High Court has rejected the Central Board of Direct Taxes’ (CBDT) practice of “travelling back in time” to reopen assessment cases, describing it as ‘legally flawed’. The court specifically quashed reassessment orders related to the assessment years 2016-17 and 2017-18 where the income escapement was below ₹50 lakh.
Rahul Charkha, a partner in our Indian firm, Economic Laws Practice (ELP), was interviewed by Shishir Sinha from The Hindu Businessline on the impact of these orders. He highlighted that proceedings with alleged income escapement of less than ₹50 Lakhs cannot be initiated beyond a period of 3 years as a principle.
Previously, double additions and double rejection of deductions have been considered by tax officers as alleged ‘income escapement amount’. Consequently, the actual addition made might be less than ₹50 lakhs, thereby raising the likelihood of departmental appeals reaching the Supreme Court.
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