Landmark Cases on Assessment Procedure
1,443 decisions, ranked by how many judgments on BharatTax rely on them.
The case of SMW Ispat (P.) Ltd. v. ACIT is cited as authority for certain legal propositions in subsequent judgments, although the specific nature of those propositions is not detailed in the provided passages.
A Special Bench decision of the Tribunal rendered prior to a Supreme Court decision is subordinate to the Supreme Court ruling.
The High Court's decision in Balasubramaniam, 269 ITR 1 (Bom), established that the Assistant Commissioner has the power to reopen assessments under Section 147 of the Income Tax Act, 1961, based on a failure to disclose material facts. This implies the Commissioner of Income-tax v. Mayur Foundation, 193 ITR 624 (Bom), reinforces the principle that assessments can be reopened if crucial information was not presented by the assessee.
Failure to comply with a statutory requirement is fatal to an assessment.
The assessment process is an integrated one, commencing with the filing of a return or issuance of a notice and concluding with the demand notice.
Assessments under Chapter XIV B of the Income-tax Act involve an element of guesswork, similar to best judgment assessments, but this guesswork must not be arbitrary.
The scope of adjustment under Section 143(1)(a) is limited and has been well-settled by judicial pronouncements.
The Central Processing Centre cannot make adjustments under section 143(1)(a)(iv) that go against a jurisdictional High Court ruling in favour of the assessee, even if the ruling was made after the adjustment.
An assessment recorded in the order sheet, even if not communicated to the assessee, amounts to an order under Section 144 and does not invalidate reassessment proceedings under Section 147, especially when validly reopened under Explanation 2(c) to Section 147.
When a valid revised return is filed under Section 139(5), the assessment must be completed solely based on that revised return. Failure to do so, such as not issuing a notice under Section 143(2) for the revised return, renders the assessment order liable to be annulled.
The principle of consistency requires that the Assessing Officer or First Appellate Authority must follow decisions made in earlier years, unless there are good and sufficient reasons to deviate. An assessee's status should not be altered arbitrarily without assigning reasons or distinguishing facts.
An assessee can make a claim of deduction for the first time before the appellate authorities.
Disallowance under Section 14A and Rule 8D requires the Assessing Officer to record specific satisfaction regarding the nexus between expenditure and exempt income, and cannot be mechanically applied without such satisfaction.
An Assessing Officer (AO) must specifically record dissatisfaction with the assessee's claim for disallowance under Section 14A before applying Rule 8D for computation. The dissatisfaction of the CIT(A) or ITAT does not automatically make Rule 8D applicable.
A Hindu Undivided Family (HUF) continues to exist even if it has only one coparcener remaining, as long as the Karta acknowledges its existence by filing returns. The existence of a HUF is not automatically dissolved upon the death of a member if other conditions for its existence remain.
An assessment made on an assessee under a different status than what was specified in the notice is illegal and without jurisdiction. The assessee must be put on notice and invited for objections if the Assessing Officer proposes to assess them under a different status.
Statutory provisions, particularly in taxing statutes, must be strictly construed. No words should be added to a statute, nor should new stipulations be read into it, beyond what is expressly prescribed.
The Department cannot be blamed for delay in completing an assessment if the Assessing Officer could not perform their duties due to the assessee not furnishing evidence.
The Assessing Officer must state in the reasons recorded for reopening an assessment that the appellant failed to disclose all material facts, that the AO had reasons to believe income had escaped assessment, and that there was fresh tangible material justifying the belief.
An assessment order is null and void and without jurisdiction if the Assessing Officer fails to follow the statutorily mandated procedure, such as issuing a draft order under section 144C(1) before issuing a notice of demand and initiating penalty proceedings.
Judicial decisions do not create new law but merely restate existing law. Subsequent decisions clarifying earlier ones can have a retrospective effect.
The High Court, when exercising powers under Section 260A of the Income Tax Act, cannot interfere with a finding of fact unless it is demonstrated to be perverse. This principle is crucial in appeals before the High Court where the existence of a substantial question of law is a prerequisite.
The Commissioner (Appeals) may pass an order on the basis of material available on hand if the assessee fails to comply with notices despite sufficient opportunity. However, the Tribunal may restore appeals to the AO if similar cases on similar facts were restored.
A prior decision of the Bombay High Court, confirmed by the Supreme Court in P.K. Badiani v. CIT (105 ITR 642), is applicable to the facts of a subsequent case, even if it involves different assessment procedures. This establishes the precedent value of a Supreme Court judgment.
An association of persons requires volition on the part of its members. Merely receiving income jointly without such volition does not constitute an association of persons.
The Assessing Officer can admit additional evidence during assessment proceedings if it is necessary to determine the true total income of the assessee.
The purpose of assessment proceedings is to correctly assess tax liability according to law, and acquiescence by an assessee in an earlier year cannot justify taxing income under the wrong head or denying a legal claim in the current year. Procedural rules should serve the cause of justice.
Section 148 notices can be issued at any time for assessments or reassessments made in consequence of or to give effect to any final finding, direction, or order of any higher authority.
The signing of a notice or document by the specified authority is a mandatory requirement under section 282A(1) of the Income Tax Act, 1961, and cannot be treated as an empty formality. Approval under section 151 requires the signature, name, and designation of the specified authority.
The Assessing Officer can scrutinize the valuation report submitted by an assessee and may, if necessary, determine a fresh valuation using the Discounted Cash Flow (DCF) method, even if the assessee opted for a different method, provided the assessee fails to substantiate their projections.
An assessee is eligible to raise an additional ground before the ITAT if the relevant details are on record and no new facts need to be investigated.
Sanction for issuing a reassessment notice under Section 148 is a prerequisite for the Assessing Officer to assume jurisdiction. The specified authority under Section 151(i) could grant sanction only until the expiry of the prescribed period, considering any extensions provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
Decisions of the jurisdictional ITAT are binding on the Assessing Officer, meaning they must be followed when facts are identical. Therefore, interference with an AO's decision based on such binding precedents is inappropriate.
Courts and Tribunals cannot grant relief beyond statutory provisions.
A revised return filed beyond the period of limitation under section 139(5) can still be considered valid if it rectifies an omission, such as a discrepancy in turnover due to market price changes.
The Tribunal has comprehensive jurisdiction to deal with issues in an appeal and can allow a new ground to be raised, assimilating issues from the CIT (Appeals) order.
A non-jurisdictional High Court judgment is generally binding on the Income Tax Appellate Tribunal, even if it conflicts with a Special Bench decision.
A statutory notice issued in the name of a non-existent entity renders the entire assessment a nullity in the eyes of law.
A protective assessment cannot be made without a prior substantive assessment.
The meaning and intention of a statute must be gathered from its plain and unambiguous language, rather than from the court's notions of what is just or expedient. The scope of what is covered must be determined by a fair and straightforward reading of the statutory text.
An assessment framed under Section 147/143(3) is invalid if the Assessing Officer's reasons for reopening are based on incorrect facts, such as a wrongly recorded belief that no return of income was filed. The approval for reopening under Section 151 must be granted by the specified authority with due application of mind to the reasons provided.
A decision is supported by earlier judgments when it is listed among other relevant case law, indicating a consistent legal principle or application.
The Assessing Officer's belief that income has escaped assessment must be based on some material, a nexus between that material and the belief, an application of the officer's mind to the material, and a tentative inference drawn from reasons.
The expression 'reason to believe' in Section 147 requires a stronger basis than 'is satisfied' and must be recorded before reopening an assessment, especially after four years. If an original assessment was made under section 143(3), the first proviso to section 147 restricts reopening after four years from the end of the relevant assessment year.
Chapter VI-A deductions are applicable to assessments made under section 153A, and the character of income does not change due to a search.
A decision by the Gujarat High Court in CIT v. C-Sam (India) Pvt Ltd. does not support the case of a party relying on it, particularly when other High Courts have made contrary findings.
Accounts can be rejected only if cogent reasons are assigned by the Assessing Officer and it is not permissible to reject accounts based on a fall in GP rate or absence of a day-to-day stock register.
