Reassessment

Conditions Precedent for Reopening of Assessment beyond 4 Year- Section 147

Income Tax - In view of the Proviso to s. 147, merely having a reason to believe that income had escaped assessment is not sufficient to reopen assessments but it must be specifically alleged by the AO in the recorded reasons that the escapement was on account of the failure of the assessee to make a full and true disclosure of material facts. In the ...

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Issues in Respect of Reopening of Assessment

Income Tax - Mr. Jay Kishor Mishra, IRS (IT: 1993) CIT (DR)(ITAT)-4, Delhi jkmishrairs@gmail.com Mr. Jay Kishor Mishra is an officer of the 1993 batch of the Indian Revenue Service. He is a Graduate in Economics and Post Graduate in Sanskrit. He is an LLB and also holds Post Graduate Diploma in Management. Ms Sushama Singh, IRS (IT: […]...

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Comprehensive Guide to Reopening of Assessments Under the Income Tax Act, 1961

Income Tax - Reopening of an assessment is one of the weapons in the armoury of the Income tax Department, it empowers assessing officer to reassess or recompute the income of an assessee which has escaped assessment.  Section 147 to 153 of the Income tax Act, 1961 [ Act] deals with the provisions of reassessment proceedings.  The said […]...

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Section -147 Reopening of Assessment / Reassessment – Horrendous journey for assessee!

Income Tax - This blog covers an extensive analysis on the reassessment provisions in light of landmarks judgement which will help professional to face dispose the litigations hastily. I am not inserting bare sections here to increase the size of blog, it is written keeping in mind to provide less, solid and crux content about the matter. It includes ...

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Reassessment | Section 148 | Decoding Judicial Angle | Issues & controversies

Income Tax - Q1. Whether fresh tangible material is required for reopening the case u/s 148 even when the case is earlier processed u/s 143(1) simply and reopening is done within four years of the end of the assessment year? Ans.  There are more than two views. One set of view from Bombay, Gujarat high court is that […]...

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Notices for assessment/reassessment of income of old cases

Income Tax - Under the provisions of Income-tax Act, 1961, notices for assessment/reassessment of income of old cases of more than six years from the end of the relevant assessment year can be issued only in the following exceptional situations: i. Under clause (c) of sub-section (1) of section 149 of the Act, in cases where income in […]...

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Return revised to change cash balance /Income may face Scrutiny

Income Tax - It is brought to the notice of tax payers that any instance coming to the notice of Income-tax Department which reflects manipulation in the amount of income, cash-in-hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty/prosecution ...

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No Reopening of Assessment to be made on Audit Objections: Committee Recommends

Income Tax - One of the key sources of dispute is the existing arrangement for follow up on audit objections by Internal Audit Party and the Revenue Audit Party. In terms of the existing arrangement, the Assessing Officer is required to take corrective steps following audit objections. The corrective measures take the form of rectification or reassess...

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SC issues notice to Amitabh Bachchan

Income Tax - NOTICE TO AB Sr. The Supreme Court has issued a notice to Mr. Amitabh Bachchan regarding his case for A.Y. 02-03 on a petition from the revenue. On 13th October, 2002, Mr. Bachchan filed his return for the year stating his income to be Rs. 14.99 crore, later on 31st March, 2003, he filed a […]...

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Government shouldn’t reopen old tax assessment cases -Assocham

Income Tax - ASSOCHAM wants correction as FM begins pre-budget consultations Showing a grave concern over the fact that notices for reopening of assessments by the tax authorities are being issued in thousands in recent times, ASSOCHAM today said returns should not be re-opened beyond three years. As Finance Minister P Chidambaram has started his pre-...

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Section 148 Notice to Legal heirs after expiry of limitation period is invalid

Sh. Shambhu Dayal, Ravi Dutt, Gori Shankar Rajesh Rohit L/h Late Sh. Jhabar Mal (ITAT Jaipur) - Sh. Shambhu Dayal, Ravi Dutt, Gori Shankar Rajesh Rohit L/h Late Sh. Jhabar Mal (ITAT Jaipur) The undisputed facts are that the assessee, Shri Jhabar Mal Kumawat had expired on 10.10.2015 as noted by the AO in the assessment order. Thereafter, the reasons for reopening the assessment u/s 147 were re...

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Claim Allowed in Original Assessment Cannot be Amenable to Provisions of Section 147/148

TCG Development India Private Limited Vs ITO (ITAT Delhi) - The issue under consideration is whether the notice issued under section 147 for re-opening of assessment is justified in law? A claim which has been allowed in the original assessment proceedings after examination of the relevant details and facts cannot be amenable to provisions of Section 147/148...

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Re-Opening of Assessment u/s 147 Merely Relying upon Investigation Report Not Justified in Law

Eminent Computers Pvt. Ltd. Vs ITO (ITAT Delhi) - Eminent Computers Pvt. Ltd. Vs ITO (ITAT Delhi) The issue under consideration is whether the re-opening of assessment u/s 147 merely relying upon investigation report is justified in law? ITAT states that the return of income filed by the assessee has also been analyzed with reference to the informa...

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Section 147/148 proceedings on mere investigation wing information was not valid

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) - Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) In the present case the search information received from the investigation wing was used to form the reason to believe by the AO but without applying the mind. Thus the reasons were merely recorded on the borrowed satisfaction by the AO. The source for a...

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No reopening of Assessment after 4 Year if no failure of Assessee in disclosing relevant facts

CIT Vs Sterling Tree Magnum India Ltd. (Madras High Court) - CIT Vs Sterling Tree Magnum India Ltd. (Madras High Court) Learned Tribunal has categorically held that there was no failure on the part of the assessee, but disclosed the relevant facts and therefore, merely on the basis of the audit objection or change of opinion and re-assessment under Sections 1...

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Directions for giving effect to Income Tax E-assessment Scheme, 2019

Notification No. 62/2019- Income Tax [S.O. 3265(E)] - (12/09/2019) - [Notification No. 62/2019 For giving effect to the E-assessment Scheme, 2019 the Central Government hereby makes the following directions ...

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CBDT notifies Income Tax E-assessment Scheme, 2019

Notification No. 61/2019- Income Tax [S.O. 3264(E)] - (12/09/2019) - The assessment under E-assessment Scheme, 2019 shall be made as per the following procedure, namely (i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment;...

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No Reopening for mere increase in Turnover due to demonetisation

Circular No. 40/2016-Income Tax - (09/12/2016) - Mere increase in turnover, because of use of digital means of payment or otherwise , in a particular year cannot be a sole reason to believe that income has escaped assessment in earlier years....

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Reassessment’s Popular Posts

Recent Posts in "Reassessment"

Section 148 Notice to Legal heirs after expiry of limitation period is invalid

Sh. Shambhu Dayal, Ravi Dutt, Gori Shankar Rajesh Rohit L/h Late Sh. Jhabar Mal (ITAT Jaipur)

Sh. Shambhu Dayal, Ravi Dutt, Gori Shankar Rajesh Rohit L/h Late Sh. Jhabar Mal (ITAT Jaipur) The undisputed facts are that the assessee, Shri Jhabar Mal Kumawat had expired on 10.10.2015 as noted by the AO in the assessment order. Thereafter, the reasons for reopening the assessment u/s 147 were recorded and after seeking approval [&hell...

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Claim Allowed in Original Assessment Cannot be Amenable to Provisions of Section 147/148

TCG Development India Private Limited Vs ITO (ITAT Delhi)

The issue under consideration is whether the notice issued under section 147 for re-opening of assessment is justified in law? A claim which has been allowed in the original assessment proceedings after examination of the relevant details and facts cannot be amenable to provisions of Section 147/148 of the Act....

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Re-Opening of Assessment u/s 147 Merely Relying upon Investigation Report Not Justified in Law

Eminent Computers Pvt. Ltd. Vs ITO (ITAT Delhi)

Eminent Computers Pvt. Ltd. Vs ITO (ITAT Delhi) The issue under consideration is whether the re-opening of assessment u/s 147 merely relying upon investigation report is justified in law? ITAT states that the return of income filed by the assessee has also been analyzed with reference to the information received from the Investigation Win...

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Section 147/148 proceedings on mere investigation wing information was not valid

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad)

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) In the present case the search information received from the investigation wing was used to form the reason to believe by the AO but without applying the mind. Thus the reasons were merely recorded on the borrowed satisfaction by the AO. The source for all the conclusions was […]...

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No reopening of Assessment after 4 Year if no failure of Assessee in disclosing relevant facts

CIT Vs Sterling Tree Magnum India Ltd. (Madras High Court)

CIT Vs Sterling Tree Magnum India Ltd. (Madras High Court) Learned Tribunal has categorically held that there was no failure on the part of the assessee, but disclosed the relevant facts and therefore, merely on the basis of the audit objection or change of opinion and re-assessment under Sections 147 & 148 of the Income […]...

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Reopening of assessment merely based on AIR Data is invalid

Raj Kumar Maheshwari Vs ITO (ITAT Jaipur)

CIT (A) upheld the reopening of the assessment by recording the reasons on incorrect facts. Hence in the facts and circumstances of the case, we find that the reopening of the assessment by the AO is without application of mind and simply going by the information received as per AIR Data. Hence the reopening of the assessment is quashed b...

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Reopening based on mere AIR Information without Application of Mind is Invalid

Raj Kumar Maheshwari Vs ITO (ITAT Jaipur)

The issue under consideration is whether the re-opening of assessment u/s 147 by AO is justified in law? The reopening of the assessment by the AO is without application of mind and simply going by the information received as per AIR Data. Hence the reopening of the assessment is quashed being invalid....

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Conditions Precedent for Reopening of Assessment beyond 4 Year- Section 147

In view of the Proviso to s. 147, merely having a reason to believe that income had escaped assessment is not sufficient to reopen assessments but it must be specifically alleged by the AO in the recorded reasons that the escapement was on account of the failure of the assessee to make a full and true disclosure of material facts. In the ...

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Posted Under: Income Tax |

In absence of new facts reopening of already examined issue was invalid

Mina Kumari Sahoo Vs ITO (ITAT Cuttack)

Assessing Officer has taken into consideration the facts and estimated the profit taking into deposits in the bank accounts. Thereafter, there were no new facts before the Assessing Officer which could justify the reopening. On these facts, it was nothing more than change of mind by the Assessing Officer, and a reopening of assessment on ...

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Issue examined under original assessment proceeding cannot be reexamined

DCIT Vs Manav Realty (ITAT Pune)

DCIT Vs Manav Realty (ITAT Pune) It is evident from the reasons recorded by the AO that the initiation of reassessment proceedings was premised on the fact that the commencement took place at a date in variance with the one stated by the assessee in the original assessment proceedings. The ld. CIT(A) has aptly recorded […]...

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No Recourse with Revenue to Reconsider Similar Facts & Evidences

PCIT Vs Goyal Builders (Punjab & Haryana High Court)

The issue under consideration is whether the re-opening of assessment is justified if it is based on the similar issues and evidences which have been already considered in original assessment?...

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Section 147 Reassessment justified for Cash Deposit in Bank but not disclosed in ROI

Shri Pillu Ram Sahal Vs ITO (ITAT Jaipur)

The issue under consideration is whether the re-opening of assessement u/s 147 is justified in law?...

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Reopening of Assessment for mere Difference in Valuation Report Not Justified

Mukul Kumar Singh Vs CIT (Patna High Court)

The issue under consideration is whether the issue of notice u/s 147 for re-opening of assessment on the basis of difference in valuation report is justified in law?...

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Re-opening of concluded assessment not valid if no failure on the part of petitioner to disclose fully & truly all material facts

State Bank of India Vs. Vineet Agrawal, ACIT (Bombay High Court)

State Bank of India Vs. Vineet Agrawal (Bombay High Court) we are of the considered opinion that no reasonable view can be taken that there was failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year 1990-91. If that be so then […]...

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Reopening not justified when all aspects were examined in original assessment proceedings

Nishit Fincap Pvt Ltd. Vs ITO (ITAT Delhi)

Nishit Fincap Pvt Ltd. Vs ITO (ITAT Delhi) Query No. 7 is in relation to share capital and share application money received. This means that specific query was raised in respect of share application money and vide reply dated 16.11.2009, the assessee furnished all details as required by the Assessing Officer. Pursuant to the reply [&helli...

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Reopening of Assessment not allowed to Form Change of Opinion

PCIT Vs Safe Corrugated Containers Pvt. Ltd. (Madras High Court)

The issue under consideration is whether the reassessment proceeding u/s 147 initiated to form change of opinion which clearly amount to reviewing the original order of assessment is justified in law?...

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Reopening without bringing out any fresh material on record is unjustified

ACIT Vs Shiv Offset India Pvt. Ltd. (ITAT Indore)

ACIT Vs Shiv Offset India Pvt. Ltd. (ITAT Indore) In the instant case the Ld. A.O had passed the original assessment taking into consideration of all the documents and facts of the case and again he had reopened the case without bringing out any fresh material on record and thus there was a mere change […]...

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AO cannot reopen a case to re-examine issue examined during original assessment

DCIT Vs Indian Metals & Ferro Alloys Ltd (ITAT Cuttack)

DCIT Vs Indian Metals & Ferro Alloys Ltd (ITAT Cuttack) In this case there is nothing to suggest that all the primary facts were not disclosed by the assessee at the time of original assessment completed u/s 143(3) of the Act nor any failure on the part of the assessee to disclose fully and truly […]...

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Assessment cannot be reopened u/s 147 Based on Material Assessed by AO in Original Assessment

Shri Dinesh Kumar Gupta Vs ITO (ITAT Agra)

The issue under consideration is whether reopen assessment u/s 147 based on the same material which is examined by AO in original assessment is justified in law?...

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Reopening in case of previously completed scrutiny cannot be taken up after 4 years

HLG Memorial Hospital Pvt. Ltd. Vs ACIT (ITAT Kolkata)

HLG Memorial Hospital Pvt. Ltd. Vs ACIT (ITAT Kolkata) In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income […]...

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Reopening to assess Income under different head due to change of opinion is invalid

ACIT Vs. Shri Rajendra Bhararia (ITAT Visakhapatnam)

Reopening of assessment to assess the remuneration under the head ‘income from salary’ instead of ‘income from other sources’ constitutes difference of opinion and the AO is not permitted to reopen the assessment on difference of opinion...

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Second Re-Assessment Notice Issued against Johnson & Johnson is Rejected by ITAT

Johnson & Johnson Private Limited Vs Add. CIT (ITAT Mumbai)

The issue under consideration is whether the re-opening of assessment u/s 147 of the Act is justified in law?...

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Section 147 Assessment invalid if reasons recorded for reopening not furnished

Shri Vijaykumar L. Jain Vs ITO (ITAT Pune)

The issue under consideration is whether Non-furnishing of reasons recorded for reopening of assessment made the entire assessment u/s 147 invalid in law?...

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No addition for other items if addition for reopening of reassessment not survives

Naresh Kumar Garg Vs ACIT (ITAT Delhi)

Naresh Kumar Garg Vs ACIT (ITAT Delhi) When the grounds for reopening the reassessment do not exist any longer and no additions were ultimately made on that account, the addition in respect of the other items, which were not part of the ‘ reasons to believe’cannot be made. ITAT states that it is evident that […]...

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Reopening after 4 years in absence of failure of Assessee to disclose fully & truly all material facts necessary for assessment is invalid

ACIT Vs M/s Shiv Vegpro Pvt. Ltd. (ITAT Jaipur)

ACIT Vs Shiv Vegpro Pvt. Ltd. (ITAT Jaipur) Reopening after 4 years in absence of failure of Assessee to disclose fully & truly all material facts necessary for assessment is invalid AO has even not mentioned as on what account or transactions the assessee has taken the accommodation entry from Shree Ram Trading Co. It […]...

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Reopening of Assessment for Mere Change of Opinion is unjustified

PCIT Vs Shri. K. R. Jayaram (Madras High Court)

Whether the Tribunal was justified in holding that the reopening of assessment was a result of mere change of opinion, even when there is no opinion formed or expressed by the Assessing Officer on this issue in the original assessment?...

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Onus on Revenue to prove Assessee Paid Donation to College in Cash

Shri Sulekh Chand Singhal Vs ACIT (ITAT Delhi)

The issue under consideration is whether the addition made by AO merely based on the statement recorded under section 132(4) of the I.T. Act is justified in law?...

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Assessment cannot be Reopened if Assessee disclosed fully & Truly All Material Facts during Original Assessment

DCIT (LTU) Vs Gail (India) Ltd (ITAT Delhi)

The issue under consideration is whether the AO is correct in re-opening of the assessment under section 147 even though the assessee has disclose fully and truly all the material facts during original assessment?...

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Reassessment not sustainable when reasons for initiation of proceedings Seized to Survive

Raj Bala Vs ITO (ITAT Delhi)

Aince the AO has accepted the returned income for which reasons were recorded, therefore, for making any other addition, he should have issued fresh notice...

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Assessment reopening based on Wrong Appreciation of Facts is unsustainable

RMP Holding (P) Ltd. Vs ITO (ITAT Delhi)

The issue under consideration is whether the re-opening of assessment u/s 147 on the basis of wrong appreciation of facts can be sustained in law?...

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Issues in Respect of Reopening of Assessment

Mr. Jay Kishor Mishra, IRS (IT: 1993) CIT (DR)(ITAT)-4, Delhi jkmishrairs@gmail.com Mr. Jay Kishor Mishra is an officer of the 1993 batch of the Indian Revenue Service. He is a Graduate in Economics and Post Graduate in Sanskrit. He is an LLB and also holds Post Graduate Diploma in Management. Ms Sushama Singh, IRS (IT: […]...

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Posted Under: Income Tax |

Assessment cannot be Reopened based on data already disclosed in scrutiny assessment

Gateway Leasing Pvt. Ltd. Vs ACIT (Bombay High Court)

Gateway Leasing Pvt. Ltd. Vs ACIT (Bombay High Court) The issue under consideration is whether the re-opening of the assessment u/s 147 is justified in law? In the present case, after referring to the information received following search and seizure action carried out in the premises of Shri Naresh Jain, it was stated that information [&...

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AO recorded reasons on same returned income- Reassessment Invalid

Raj Bala Vs ITO (ITAT Delhi)

AO recording reasons on same returned income considering escaped assessment but making various other additions of other than accepted returned income declared invalid and deleted in light of Explanation 3 and held issuance of fresh notice u/s 148 on other issues is mandatory....

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HC denies relief in section 147 proceedings for not replying notice for 6 Months

Kuldip Kumar Goel Vs ACIT & Anr. (Delhi High Court)

he Supreme Court in GKN Driveshafts (India Ltd.) v. Income Tax Officer 259 ITR 19 (SC) has clarified that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file a return and if he so desire, to seek reasons for issuing notices....

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Section 54/54F exemption: ITAT directs AO to consider additional evidence

Hemalatha Mallapuram Vs ITO (ITAT Hyderabad)

The issue under consideration is whether the tribunal can give fresh opportunity to the assessee to submit evidence which assessee might not have been able to provide at the time of hearing?...

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Merely reason to believe not sufficient to reopen assessments beyond 4 year period

Amrabathi Investra (P) Ltd. Vs ITO (ITAT Kolkata)

Amrabathi Investra (P) Ltd. Vs ITO (ITAT Kolkata) In the assessee`s case in the reasons supplied to the assesseee, as noted in above para, there is no whisper, what to speak of any allegation, that the assessee had failed to disclose fully and truly all material facts necessary for assessment and that because of this […]...

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Comprehensive Guide to Reopening of Assessments Under the Income Tax Act, 1961

Reopening of an assessment is one of the weapons in the armoury of the Income tax Department, it empowers assessing officer to reassess or recompute the income of an assessee which has escaped assessment.  Section 147 to 153 of the Income tax Act, 1961 [ Act] deals with the provisions of reassessment proceedings.  The said […]...

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Posted Under: Income Tax |

Section -147 Reopening of Assessment / Reassessment – Horrendous journey for assessee!

This blog covers an extensive analysis on the reassessment provisions in light of landmarks judgement which will help professional to face dispose the litigations hastily. I am not inserting bare sections here to increase the size of blog, it is written keeping in mind to provide less, solid and crux content about the matter. It includes ...

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Posted Under: Income Tax | ,

Reopening of assessment merely on Internal Audit Objection Not Justified

Lionbridge Technologies P. Ltd. Vs ACIT (ITAT Mumbai)

Whether the re-opening of assessment u/s 147 initiated by AO is justified in law? Re-opening of assessment on basis of Internal Audit Objection Not Justified....

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AO cannot disallow Sum credit in books under Section 68

Shri Hitesh Kumar Gupta Vs ITO (ITAT Jaipur)

The issue under consideration is whether the addition made by AO u/s 68 of Income tax Act, 1961 is justified in law?...

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Reassessment | Section 148 | Decoding Judicial Angle | Issues & controversies

Q1. Whether fresh tangible material is required for reopening the case u/s 148 even when the case is earlier processed u/s 143(1) simply and reopening is done within four years of the end of the assessment year? Ans.  There are more than two views. One set of view from Bombay, Gujarat high court is that […]...

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Posted Under: Income Tax |

Section 148- Revenue cannot travel beyond reasons recorded & same cannot be supplemented at the Later stage

Gateway Leaisng Pvt Ltd Vs ACIT (Bombay High Court)

Gateway Leaisng Pvt Ltd Vs ACIT (Bombay High Court) Section 148- Revenue cannot travel beyond reasons recorded & same cannot be supplemented at the Later stage. Reasons which are recorded by the Assessing Officer for re-opening an assessment are the only reasons which can be considered when the formation of the belief is impugned; suc...

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Section 148 notice unsustainable as very basis of notice was invalid

Aberdeen Asia Pacific Including Japan Equity Fund Vs DCIT (Bombay High Court)

High Court states that if the Assessing Officer had no jurisdiction to initiate re- assessment proceeding, the mere fact that subsequent orders have been passed would not render the challenge to jurisdiction infructuous. If the very basis for re- opening assessment does not survive, orders on such re-opening would not survive too. Hence,...

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Assessee can claim Section 54F deduction during Section 147 Proceedings

Pyare Lal Saini Vs ITO (ITAT Jaipur)

Whether AO is correct in rejecting the claim of assessee regarding the deduction u/s 54F, which was made first time during Reassessment Proceedings?...

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Section 68: Sales declared as Income in books cannot be treated as cash credit

Bhagwant Merchants Private Limited Vs ITO (ITAT Kolkata)

ITAT states that the assessee has disclosed the sale of shares in its books of account. Once the sale is declared as income by the assessee, the question of treating the same amount as a cash credit u/s 68 of the Act results in double addition. Thus, the addition is also bad on merits. Hence, the appeal of the assessee is allowed....

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Mere bald assertions by AO in reasons for reopening would confer valid jurisdiction to AO to Reopen?

Each aspect of Section 147 has been a subject matter of careful scrutiny by the court of law. One such main issue is with respect to the validity of the assumption of jurisdiction by the AO to reopen the assessment beyond four years, merely by making a Bald Assertion in the reasons as to the failure of the Assessee to disclose fully and t...

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Posted Under: Income Tax |

Reopening of assessment to deny Section 80IB is without jurisdiction if no failure of Assessee to disclose information during Original Assessment

International Flavours and Fragrances India Private Limited Vs DCIT (Madras High Court)

International Flavours and Fragrances India Private Limited Vs DCIT (Madras High Court) The issue under consideration is whether the notice issued u/s 147 for re-opening the assessment is justified in law? Petitioner is engaged in manufacture of flavour essences, mixed seasoning powders (dry mix) and formulated perfumery compounds etc. Th...

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Re-Assessment justified against former Cricketer Srikanth

Shri K. Srikanth Vs ACIT (ITAT Chennai)

Reassessment was justified by the income tax department against former Indian Cricket Team Captain Krishnamachari Srikanth and non compete fee of Rs. 7.50 crores was exempt from tax being capital receipt;...

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No reassessment after 4 years in case there was no disclosure failure on the part of assessee

PCIT Vs SKI Retail Capital Ltd. (Madras High Court)

AO was not justified in reopening of assessment after four years as on an independent application of mind and on thorough consideration of material aspects and legal position,there was no failure on the part of assessee....

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Reopening of assessment without bringing any fresh material on record is not justified

Chordia Buildcon Pvt. Ltd. Vs DCIT (ITAT Jaipur)

Chordia Buildcon Pvt. Ltd. Vs DCIT (ITAT Jaipur) The issue under consideration is whether the action taken by the AO u/s 147 r.w.s 148 is justified in law? The case of assessee was originally selected for scrutiny and a detailed questionnarie was issued alongwith notice u/s 142(1). The AO asked specific queries with regard to […]...

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Reassessment u/s 147 without any tangible material to support escapement of income not justified

SPR & RG constructions Pvt. Ltd. Vs ACIT (ITAT Chennai)

SPR & RG constructions Pvt. Ltd. Vs ACIT (ITAT Chennai) The issue under consideration is whether the reasons for reopening of assessment u/s 147 are justified? The reasons recorded for reopening are on the basis of the audited accounts of the assessee i.e., specifically perusal of Schedule 30 of the profit and loss account and [&helli...

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A.O. bound to dispose off objections filed by assessee by passing a speaking order

Redington India Ltd. Vs ACIT (Madras High Court)

The issue under consideration is whether the Assessing officer is correct in rejecting the objections filed by the petitioner against the reasons for reopening the assessment without passing speaking order?...

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Section 148: Reason for issue of notice can be claimed before Return Filing

Assessee Can Claim Reasons For Issue Of Notice under section 148 Before Filing Of Return under section 148 of Income Tax Act, 1961. We all are aware that notice under section 148 for reassessment can be issued by income tax department upto sixteen years from the end of the relevant assessment years, if there is […]...

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Posted Under: Income Tax |

A New Light on Reassessment Under Income Tax Act, 1961

New Delhi Television Ltd. Vs DCIT (Supreme Court of India)

In our view this is not a fair or proper procedure. If not in the first notice, at least at the time of furnishing the reasons the assessee should have been informed that the revenue relied upon the second proviso. The assessee must be put to notice of all the provisions on which the revenue relies upon....

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Mere Outstanding loan in books cannot be reason for reopening of assessment

Vanita Sanjeev Anad Vs ITO (Delhi High Court)

In the given case, the Petitioner who is a regular income tax assessee filed her return of income for the AY 2011-12. The Assessing Officer issued under section 133(6) of the Act, called for certain information from the assessee....

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Principles of law governing re-assessment under Income Tax

Principles of law governing re-assessment under Income Tax Law (Section 147 and 148) (i) The Court should be guided by the reasons recorded for the reassessment and not by the reasons or explanation given by the Assessing Officer at a later stage in respect of the notice of reassessment. To put it in other words, […]...

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Posted Under: Income Tax |

Reopening of Assessment after 4 years only if some new Tangible material

Arun Munshaw HUF Vs ITO (Gujarat High Court)

Arun Munshaw HUF Vs ITO (Gujarat High Court) Thus, having regard to the position of law and the materials emerging from the record of the case, it cannot be said that there was no full and true disclosure at the end of the assessee of the material facts. In such circumstances, it could be said […]...

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Reopening Based on change of opinion and in absence of any adverse tangible material was invalid

DCIT Vs Surat Urban Development Authority (SUDA) (ITAT Ahmedabad)

In such cases, assessments can be reopened only if an income assessable to tax has escaped on account of failure of the assessee to disclose all the material facts fully and truly. In other words, the AO has to demonstrate that income of the assessee has escaped assessment on account of its failure to disclose all material facts of the as...

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Section 148 Notice issued in the name of dead person was invaild

Urmilaben Anirudhhasinhji Jadeja Vs ITO (Gujarat High Court)

Notice under section 148 issued to a dead person could not be continued against the legal representatives and moreover, section 292B also could not be resorted to....

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Section 148 notice can be challenged before HC only after following procedure

S.M. Sarveswaran (HUF) Vs ITO (Madras High Court)

The writ petition is not maintainable challenging the notice issued under Section 148 of the Income Tax Act. The Hon'ble Supreme court in GKN Drive Shafts' case reported in 259 ITR 19 (SC), clarified the procedure to be followed, when notice is issued under Section 148. Therefore, the petitioner has to follow such procedure including by a...

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Reopening invalid if reasons for same not speaks of escapement of income

DCIT Vs. Aryan Mining & Trading Corporation Ltd. (ITAT Kolkata)

As there was no whisper about escapement of income, i.e., loss created by misusing client’s code modification, in the reasons for reopening conveyed to the assessee, therefore, no addition in respect of this could be made without making any addition in respect of the item shown to have escaped assessment in the reasons recorded....

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No reassessment can be made solely on basis of statement recorded u/s 133A

A. Thangavel Nadar Stores Vs ITO (Madras High Court)

Reassessment was not justified wholly on the basis of a sworn statement recorded in the course of survey in the absence of any other tangible evidence available with the Assessing Officer as the materials collected and the statement obtained under Section 133A would not automatically bind upon the assessee....

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Mere Change of Opinion Cannot be Basis for Re-Opening of Assessment

DCIT Vs K.V. Mohana Rao and Co. Pvt. Ltd. (ITAT Visakhapatnam)

The issue under consideration is whether the re-opening of assessment u/s 147 is justified if the details on the basis of which case is re-opened was already available at the time of original assessment?...

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Non-disposal of objections to re-opening of assessment are not mere procedural lapse

Aarti Industries Ltd. Vs DCIT (ITAT Mumbai)

Non-disposal of objections challenging the validity of re-opening of assessment under section 147 is not a mere procedural lapse but affects the jurisdiction of AO to pass assessment order under section 143(3) read with section 147....

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Reopening of assessment justified if notice issued in the name of surviving entity only

Experion Developers Pvt. Ltd. Vs ACIT (Delhi High Court)

Reopening of assessment was justified in case of EDPL as there were sufficient 'reasons to believe' that income had escaped assessment and the bar to reopening of proceedings after expiry of four years from the date of final assessment order, under the proviso, did not apply in assessee's case and there was no requirement to issue two sep...

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How to opt for Online Assessment and Submit Online response

Presently, notice u/s 143(2) is generated by CASS in ITBA. Also, AO issues the statutory notice including notice u/s 142(1) with Questionnaire of the IT Act 1961 from the ITBA assessment module to the assessee’s designated email ID. Similarly, there are many proceedings of the Income Tax Act which require notice or correspondence betwee...

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Posted Under: Income Tax |

Reopening of assessment after expiry of limitation period & based on change of opinion is invalid

Krutika Developers P. Ltd. Vs ITO (ITAT Ahmedabad)

The interdiction in the proviso appended to section 147 puts an embargo in the exercise of power at the end of the AO in cases where scrutiny assessment has taken place and four years have expired from the end of relevant assessment year. In such cases, the assessment cannot be reopened unless it its demonstrated that income has escaped a...

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No reassessment for breach of provisions of section 80IB If disclosed during Original assessment

Anand Developers Vs ACIT (Bombay to Goa High Court)

Anand Developers Vs ACIT (Bombay to Goa High Court) It is the case of the Petitioner that Petitioner, vide letter dated 20th February, 2015, in the course of Original assessment proceedings before the AO had itself submitted that a few flats may have been allotted to persons in violation of clause 10(f) of section 80IB of the […]...

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Importance of Notice in Income Tax Reassessment Proceedings

Many times in Reassessment proceedings very little importance & attention is paid to the timing of issue of notice under section 143(2). Section 143 of Income Tax Act is about Assessment, subsection 2 of section 143 talks about issue of notice in cases where return of income has been filed within the time limits specified […]...

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Posted Under: Income Tax |

Income Escaping Assessment Under Section 147/148 of Income Tax Act

Section 148 stands for reassessment or income escaping assessment. Nowadays income tax department is scrutinizing more returns under Section 148 of the Income Tax Act. So we are here to discuss about section 148 of the Income Tax Act, 1961. Article explains Time limit for issuance of notice u/s 148, Issuance of show cause notice […...

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Posted Under: Income Tax |

Notice to Amalgamated Company which ceased to exist is without jurisdiction

Gayatri Microns Ltd. Vs ACIT (Gujarat High Court)

Gayatri Microns Ltd. Vs ACIT (Gujarat High Court) The Gujarat High Court set aside Reassessment Notice issued to the amalgamated company which ceased to exist after approval of the composite scheme of arrangement. The controversy in the present petition, is no longer res integra. The Apex Court in the case of Principal Commissioner of Inc...

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S. 147/148 AO cannot review his decision & reopen on a change of opinion

BPTP Limited Vs PCIT (Delhi High Court)

BPTP Limited Vs PCIT (Delhi High Court) Section 147 of the IT Act does not allow the reassessment of an income merely because of the fact that the assessing officer has a change of opinion with regard to the interpretation of law differently on the facts that were well within his knowledge even at the […]...

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Section 147: Mere ‘Yes’ on approval not amounts to due application of mind

Blue Chip Developers (P) Ltd. Vs. ITO (ITAT Delhi)

Approval given by approving authority for reopening of assessment u/s 147 of the Income Tax Act, 1961 was without due application of mind and in mechanical manner - reassessment should be quashed....

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Validity of Approval for Reopening by CIT for wrong application of Law by AO

ITO Vs Krish Homes Private Limited (ITAT Jaipur)

The question that arises for consideration is where there is no new material brought on record by the Assessing subsequent to completion of original proceedings u/s 143(3) and where the matter was duly examined during the original assessment proceedings, whether the Assessing officer can still acquire jurisdiction by exercising powers u/s...

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Mere participation in section 147 proceedings not confers jurisdiction upon AO

Attar Singh Vs ITO (ITAT Delhi)

Mere participation in proceedings or acquiescence would not confer jurisdiction upon AO who otherwise was not the AO of assessee, therefore, notice issued under section 148 was quashed and since  reopening was quashed,  subsequent orders passed on account of such reopening were also quashed....

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In absence of valid notice, AO has no authority to assume jurisdiction U/s. 147 

Late Bharti Harendra Modi By Her Legal Heir Nikhilharendr Modi Vs ITO (Gujarat High Court)

Late Bharti Harendra Modi by Her Legal Heir Nikhilharendr Modi Vs ITO (Gujarat High Court) The notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has […]...

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Fresh information in investigation report form- Reassessment notice valid

Chetan Sabharwal Vs ACIT (Delhi High Court)

Fresh information in the form of investigation report clearly demonstrated that initial disclosure regarding price of shares was not true and there was whole ‘live link’ between material in the form of investigation report and formation of belief that income had escaped assessment, therefore, reassessment notice was sustained as valid...

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NSEL Transaction: Reopening of assessment not permissible for Mere verification or for fishing inquiry

Mridulla Badarmal Jain Vs ACIT (Gujarat High Court)

 Re-assessment even if in case where return was not scrutinized before the income chargeable to tax had escaped before acceptance originally could not be made unless AO has reason to believe that the income chargeable to tax had escaped, therefore, for mere verification or for fishing inquiry, reopening of assessment was not permissible....

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Why Effective Documentation a must for Income Tax Assessment Procedures?

Documentation can play a pivotal role in ensuring correct tax impact. It reduces great amount of time and energy of the company, advisors, auditors and most importantly the judiciary system....

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Posted Under: Income Tax |

Approval for Section 148 notice by mere “YES” word is invalid

Blue Chip Developers (P) Ltd. Vs ITO (ITAT Delhi)

In the present case the approving authority has given approval to the reopening of assessment in a mechanical manner without due application of mind by only mentioning in Column No. 12 'YES', in the Reasons for Initiating Proceedings u/s. 147 and For obtaining the Approval of the Addl. Commissioner of Income Tax. On this count the reasses...

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Section 147/ 151: Sanction granted by superior officer is not relevant

Pr. CIT Vs Khushbu Industries (Bombay High Court)

Court held that where the Act provides for sanction by the Joint Commissioner of Income Tax in terms of section 151, then the sanction by the Commissioner of Income Tax would not meet the requirement of the Act and the reopening notice will be without jurisdiction....

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Mere signing against a particular column of format is nothing but a mechanical approval

Shri Ram Niranjan Tibra Vs ITO (ITAT Jaipur)

Ld. CIT acted mechanically in order to discharge his statutory obligation when he merely wrote on the format Yes, I am satisfied. In the case in hand, the Id. CIT has even not written any affirmative sentence or word but has just signed against the column which was pre-typed Yes....

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Reopening of Assessment merely based on department advisory is invalid

Ravindra Kumar (HUF) Vs CIT (Patna High Court)

In view of the clear fact situation available on the record where such reopening is simply founded on the advisory dated 10.03.2016 issued by the department and where the reasons so present for the formation of belief is not resting on any tangible material, in possession of the Assessing officer as confirmed from the discussions above, i...

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Reassessment proceedings on basis of change of opinion was invalid

City Union Bank Limited Vs ACIT (Madras High Court)

Reassessment could not be reopened on basis of change of opinion in case the matter of dis allowance had already been considered during the original assessment proceedings because the authority could not take advantage of their own wrong if they failed to perform their statutory duty....

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Reopening of Assessments after 4 Years -Section 148 -Income Tax Act – Special Considerations

The reopening of an assessment is carried out by the Assessing Officer by first issuing a notice under Section 148 of the Income Tax Act, 1961 (the Act) and thereafter proceeding to make a reassessment order under Section 147 of the Act. Yet, in certain circumstances, the assessee is advised or he decides to challenge […]...

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Posted Under: Income Tax |

Approval to issue Section 148 notice has to be given by JCIT & not by PCIT

Miranda Tools Pvt.Ltd. Vs ITO (Bombay High Court)

In the present case the Chief Commissioner of Income tax is not the officer specified in section 151 of the Act. There is thus a breach of requirement of section 151(2) of the Act regarding sanction for issuance of notice under section 148 of the Act. Consequently, the impugned notice and the impugned order cannot be sustained in law. The...

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Reassessment notice issued to dead person not valid merely because PAN was active

Durlabhai Kanubhai Rajpara Vs ITO (Gujarat High Court)

Merely because PAN is active, it cannot be presumed that the assessee is alive and notice for reassessment be issued in the name of dead person, more particularly, when the department was made aware about the death of the assessee prior to issuance of the notice....

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Reopening of assessment for non-existent and factually incorrect reasons was invalid

Shri Ram Mohan Rawat Vs ITO (ITAT Jaipur)

Shri Ram Mohan Rawat Vs ITO (ITAT Jaipur) Reasons recorded by the AO for formation of belief that income assessable to tax has escaped assessment are based on two counts. One, the assessee has made bogus purchases and the second, that the purchases are not verifiable as the as the  assessee has not filed the […]...

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AO cannot reject Section 54 exemption if amount was deposited in capital gain deposit account

Dr. Jaya Narayan Naik Vs JCIT (ITAT Ranchi)

whether AO is correct in holding that the assessee was not entitled exemption u/s.54 of the Act by rejecting the claim of the assessee to have deposited in capital gain deposit account?...

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After conclusion of proceedings u/s 147 AO cannot take aid of Exp. 3 to Section 147 to make any addition

M/s JDC Traders Pvt. Ltd. Vs DCIT (ITAT Delhi)

M/s JDC Traders Pvt. Ltd. Vs DCIT (ITAT Delhi) A careful reading of Section 147 clearly shows that it empowers the learned AO to assess or re-assess the income in respect of any issue which had escaped the assessment irrespective of the fact that whether such aspect was adverted to in respect of the reasons […]...

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Reassessment not valid if assessee’s objections to reasons for reopening not disposed

Nimitaya Hotel & Resorts Ltd. Vs ACIT (ITAT Delhi)

Not passing a speaking order rejecting the objections of assessee to reopening of assessment but passing an order under section 147 making the additions based on reasons recorded had caused serious prejudice to interest of assessee. Thus, reopening had not been done in accordance with the law by AO and, therefore, reassessment order was s...

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Non-quoting of reasons for reopening in reassessment notice would not vitiate entire proceedings

Seshasayee Paper & Boards Ltd Vs UOI (Madras High Court)

Mere non quoting of the reasons for reopening by AO in the impugned notice would not vitiate the entire proceedings. Department had to furnish the reasons to assessee and on receipt of the reasons, if assessee were of the opinion that there were no additional material or new materials were available then they could submit their objections...

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All About Income Tax E-Assessment Scheme 2019

The CBDT on 12th September 2019, notified the much talked about e-assessment procedure vide Notification no. 61/2019. The stakes were high, as it was expected to reduce the red-tapism in the country, during an assessment proceeding. This notification was quickly followed up by another notification vide 62/2019, giving effect to the Income...

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Posted Under: Income Tax |

Reassessment proceedings invalid if officer issuing notice & recording reasons are different

Pankajbhai Jaysukhlal Shah C/o. Meena Agency Ltd. Vs ACIT (Gujarat High Court)

Pankajbhai Jaysukhlal Shah C/O. Meena Agency Ltd. Vs ACIT (Gujarat High Court) It is the officer who records the reasons who has to issue the notice under section 148(1) of the Act whereas in the present case the reasons have been recorded by the jurisdictional Assessing Officer, whereas the notice under section 148(1) of the […]...

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Directions for giving effect to Income Tax E-assessment Scheme, 2019

Notification No. 62/2019- Income Tax [S.O. 3265(E)] (12/09/2019)

[Notification No. 62/2019 For giving effect to the E-assessment Scheme, 2019 the Central Government hereby makes the following directions ...

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CBDT notifies Income Tax E-assessment Scheme, 2019

Notification No. 61/2019- Income Tax [S.O. 3264(E)] (12/09/2019)

The assessment under E-assessment Scheme, 2019 shall be made as per the following procedure, namely (i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment;...

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Notice U/s. 143(2) invalid if issued without application of mind

Satish Kumar Vs ITO (ITAT Delhi)

Satish Kumar Vs ITO (ITAT Delhi) It is an admitted fact that assessee filed reply in response to the notice under section 148 of the I.T. Act and submitted before A.O. that original return filed before him may be treated as return filed in response to the notice under section 148 of the I.T. Act. […]...

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Reopening of assessment- Section 147 of Income Tax Act, 1961

Reopening of assessment u/s 147 of the IT Act , 1961 on the basis of information from Investigation Wing of the department On the basis of information received from the investigation wing of the department, the Assessing officer cannot issue notice u/s 148 of the act mechanically, without using his own mind. He has to […]...

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Posted Under: Income Tax |

L&T Case: Classic example of change of opinion

DCIT Vs M/s Larsen & Toubro Limited (ITAT Mumbai)

The assessee had challenged reopening of assessment on two grounds. The CIT(A) had accepted the arguments of the assessee, in light of provisions of section 147 of the Act, and the assessment order passed by the AO u/s 143(3) of the Act, dated 29/12/2018 and came to the conclusion that the assessment has been reopened on change of opinion...

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