escapement

In a reprieve to the assessees, the Supreme Court has ruled that the Income-Tax Department cannot re-open the assessment cases arbitrarily but on the basis of some ‘tangible material’. If armed with unrestricted power to re-open the cases against assessees, it will amount to review of the assessment by the assessing authority, said the apex court. Full Article

In CIT vs. Kelvinator of India Ltd. 256 ITR 1 the Full Bench of the Delhi High Court was considering a case of reopening u/s 147 within 4 years from the end of the assessment year. The Court held that when a regular order of assessment is passed in terms of section 143 (3) of the Act, a presumption can be raised that such an order has been passed on application of mind. Full Article

It is within the power of the AO not to add that particular item based on which the AO has formed a belief that income has escaped assessment; when the AO is satisfied that there was no reason for an addition on the matter based on which the notice u/s 148 was issued, does not mean that he cannot bring to tax any other income which has escaped assessment and which has come to his notice subsequently, in the course of proceedings u/s 147. Full Article

If the AO has cause or justification to know or suppose that income has escaped assessment it can be said to have a reason to believe that an income had escaped assessment; at the time of recording reasons for initiating proceedings u/s 147 it is not necessary that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion; at the initial stage what is required is `reason to believe' but no established fact of escapement of income. Full Article

SUMMARY OF CASE LAW If the notice under section 148 of the Income-tax Act is sustainable on any of the reasons taken by the Assessing Officer, the initiation of reassessment cannot be declared as invalid; there cannot be any initiation of reassessment proceedings on the basis of an item of income or disallowance which has [...] Full Article

SUMMARY OF CASE LAW Merely because the Assessing Officer is prohibited from issuing notice under section 143(2) after twelve months of filing of the return, it does not mean that proceedings commenced with filing of a return, are pending before him; notice issued under section 148(1) can be issued even where notice under section 143(2) [...] Full Article

It’s not just high-value property transactions that come under the IT’s hawk eyes. The income tax department will scrutinize property deals of even Rs 5 lakh and above to tap tax dues. Thus, the trap is set for those who undervalue their properties to escape the IT net. Sub-registrars have been asked to submit details [...] Full Article

SUMMARY OF CASE LAW The proceedings under section 147 cannot impinge upon items which have no connection or relation with items of income and/or expenditure which form the basis of a notice under section 148(1).  CASE LAW DETAILS Decided by: HIGH COURT OF DELHI, In The case of: Jay Bharat Maruti Ltd. v. CIT, Appeal [...] Full Article