Indian Oil Corporation v. Income Tax Officer

159 ITR 956Supreme Court of India1986#2614 most cited

What is Indian Oil Corporation v. Income Tax Officer authority for?

For an addition to income or issuance of a reassessment notice under Section 148, there must be a valid 'reason to believe' that income has escaped assessment; mere suspicion cannot form the basis for such action, as 'reason to believe' is not the same as 'reason to suspect'.

44

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2008 to 2026.

Also referred to as

Indian Oil Corporation v. ITO · 159 ITR 956 · Section 147 · Section 148 · reason to believe · reason to suspect · mere suspicion · income escaping assessment · reassessment validity · basis of addition

Sections most often in play

Section 143(3)Section 147Section 148Section 132Section 10(38)Section 133(6)Section 148(2)Section 263
Read the full judgment

Issues it is cited on

first proviso to section 147section 131(1)material facts necessary for assessmentkelvinatorsanctioning authoritymere change of opinionincome escaping assessmentreason to believeborrowed satisfactionlive linktangible materialescapement of income

Judgments citing Indian Oil Corporation v. Income Tax Officer

Director of Income Tax vs. Rolls Royce Industrial Power India Ltd

The appeals are dismissed, but with no order as to costs

ITA/1061/2011HC Delhi18 May 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 143(3)Section 148Section 195(3)Section 260A

…Page 11 of 11 material relevant to the assessment, "it is for the Income-tax Officer to draw the proper inferences of fact and law therefrom and the Assessee cannot further be called upon to do so for him." In Indian Oil Corporation v. ITO [1986] 159 ITR 956. the Court pertinently observed "it is for the taxing authority to draw inference. It is not necessary for the Assessee to draw inference.” These observations apply on all fours to the case on hand. Here the Assessee had discharged its burden of disclosing fully and truly all the material facts before the AO during the original assessments.…

Director of Income Tax vs. Rolls Royce Industrial Power India Ltd

The appeals are dismissed, but with no order as to costs

ITA/1058/2011HC Delhi18 May 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 143(3)Section 148Section 195(3)Section 260A

…Page 11 of 11 material relevant to the assessment, "it is for the Income-tax Officer to draw the proper inferences of fact and law therefrom and the Assessee cannot further be called upon to do so for him." In Indian Oil Corporation v. ITO [1986] 159 ITR 956. the Court pertinently observed "it is for the taxing authority to draw inference. It is not necessary for the Assessee to draw inference.” These observations apply on all fours to the case on hand. Here the Assessee had discharged its burden of disclosing fully and truly all the material facts before the AO during the original assessments.…

Shri S L Basavaraj (HUF) vs. The Asst Commissioner of Income Tax

Appeals stand allowed

ITA/336/2009HC Karnataka07 Aug 2015

Bench: The Tribunal. By A Common Order Dated 30.1.2009, Tribunal Has Allowed The Appeals Of The Revenue. Aggrieved

Section 143(1)Section 148Section 260

…of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The Apex Court in the case of Indian Oil Corporation –vs- ITO (1986) 159 ITR 956 has observed that ‘reason to believe’ is not the same thing as ‘reason to suspect’. 12 11. From the aforesaid decisions it is clear that there are sufficient safeguards for a concluded assessment to be re-opened. This is to prevent arbitrariness in the action of the Assessing Officer while issuing notice under Section 14…

Commissioner of Income Tax vs. Gupta Abhushan P.Ltd

The appeals are dismissed

ITA - 908 / 2008HC Delhi20 Oct 2008
For Appellant: Ms Prem Lata BansalFor Respondent: Mr C. S. Aggarwal with Mr Prakash Kumar
Section 133ASection 143Section 147Section 148Section 260ASection 68

…this fact, the Assessing Officer was of the view that discrepancy in the stock was also likely to occur in the years in question and that he was satisfied that income to that extent had escaped assessment. In Indian Oil Corporation v. Income Tax Officer: 159 ITR 956 (SC), the Supreme Court had observed that a mere reason to suspect cannot be equated with a reason to believe. What we note from the reasons recorded is that the Assessing Officer had a mere suspicion that there was a likelihood of there being a discrepancy in the stocks in the earlier years also based on the fact that there was a discrepan…