We can achieve that by override-ing onKeyPreIme in your custom AutoCompleteTextView.

public class CustomAutoCompleteTextView extends AutoCompleteTextView {

        public CustomAutoCompleteTextView(Context context) {
            super(context);
        }

        public CustomAutoCompleteTextView(Context context, AttributeSet attrs) {
            super(context, attrs);
        }

        public CustomAutoCompleteTextView(Context context, AttributeSet attrs, int defStyleAttr) {
            super(context, attrs, defStyleAttr);
        }

        @Override
        public boolean onKeyPreIme(int keyCode, KeyEvent event) {

            if (keyCode == KeyEvent.KEYCODE_BACK && isPopupShowing()) {

                InputMethodManager inputManager = (InputMethodManager) getContext().getSystemService(Context.INPUT_METHOD_SERVICE);

                if(inputManager.hideSoftInputFromWindow(findFocus().getWindowToken(),
                    InputMethodManager.HIDE_NOT_ALWAYS)){    
                    return true;
               }
            }

            return super.onKeyPreIme(keyCode, event);
        }

 }