For AY 2014-15, the assessee had disclosed short-term capital gains on sale of shares of a listed company and paid tax thereon. After expiry of three years, the Assessing Officer issued notice under section 148A(b) alleging escapement of income in relation to share transactions, followed by order under section 148A(d) and notice under section 148. On writ, the Delhi High Court held that at the stage of section 148A(d), the Assessing Officer is required to examine the material on record and the assessee’s reply and determine whether income chargeable to tax had in fact escaped assessment and whether the extended limitation under section 149 was available. In the present case, the allegation regarding long-term capital gains was factually incorrect, as the assessee had never claimed exempt long-term capital gains. There was also no material to show that the assessee had received the gross sale proceeds of Rs. 61.93 lakhs; the unrebutted material showed receipt of only Rs. 9.43 lakhs, which had already been offered to tax as short-term capital gains. Even assuming the share transaction was dubious, the alleged escapement could not exceed Rs. 50 lakhs so as to attract the extended limitation. Accordingly, notice issued beyond three years was barred by   limitation and the reassessment proceedings were quashed.  (AY. 2014-15)