Proceedings U/S 148A Of Income Tax Act Unsustainable If Escaped Income Is Below ₹50 Lakhs & Notice Is Issued After 3 Years: Kerala High Court

The Kerala High Court has ruled that proceedings under Section 148A of the Income Tax Act are not sustainable if escaped income is below ₹50 lakhs and the notice is issued after 3 years. This significant ruling provides crucial relief to taxpayers, limiting the scope of reassessment proceedings. Section 148A deals with preliminary inquiry before issuing reassessment notices. The court's decision emphasizes that for smaller amounts of escaped income, the tax department has a shorter window for reopening assessments, preventing undue harassment and ensuring finality of assessments unless large-scale evasion is involved.