Landmark Cases on Assessment Procedure

A tribunal can permit an additional ground to be raised in second appellate proceedings, even in section 153A assessments initiated after search action, if all relevant facts are on record, to determine the correct tax liability.

The High Court should not entertain writ petitions when an efficacious alternative remedy under the Income Tax Act is available, as the Act provides a complete machinery for assessment and reassessment. This is a rule of self-imposed limitation, policy, convenience, and discretion.

The court considers the application of Section 145 of the Income Tax Act regarding accounting methods and the implications of cancellation clauses in agreements, including compensation to lessees.

A notice under section 143(2) is not mandatory for assessments framed under section 153A/153C, as the Supreme Court's decision in Hotel Blue Moon was specific to block assessments under the erstwhile Chapter XIV-B.

The Assessing Officer is presumed to have considered all relevant case law when passing an assessment order, particularly in cases involving Computer Aided Scrutiny (CAS) assessments.

Judicial precedents, including this case, support the dismissal of revenue's grounds of appeal concerning the disallowance of year-end provisions.

An assessment order is not erroneous if the Assessing Officer has accepted the explanations made by the assessee. The revisional order is not proper if the Tribunal views that the Assessing Officer did not make proper inquiries.

A High Court order allowing a writ petition may be subject to the outcome of a pending Supreme Court appeal by the Revenue against a related earlier decision, with parties granted liberty to approach the court based on the Supreme Court's ruling.

The Income Tax Appellate Tribunal has the jurisdiction to entertain an assessee's additional ground of appeal, even if the claim was not made before the Income Tax Officer or the Appellate Assistant Commissioner, provided the additional grounds are legal and based on facts already on record without requiring fresh investigation.

Where an assessee's account books are found to be incorrect or incomplete due to unverifiable purchases and sales, lack of vouchers, and absence of a stock register, the Assessing Officer can estimate the profits.

The Commissioner of Income Tax (Appeals) can restore an issue to the Assessing Officer for decision in light of a specific tribunal ruling, and this action is justified if reasonable.

The Finance Minister's speech introducing a bill can be relied upon to clarify the object and purpose of newly introduced provisions, particularly when the language of the section is ambiguous.

The Delhi High Court decision in Gookluck Automobils P. Ltd. v. ACIT is cited for a proposition, but the provided passages are incomplete and do not reveal the specific holding.

A draft assessment order under section 144C(1) must be issued before a final assessment order, and a corrigendum cannot cure the failure to issue a proper draft order.

A mere change of opinion by the Assessing Officer is not a valid ground for reassessment under Section 147 of the Income Tax Act, 1961, particularly when the original assessment under Section 143(3) was made after considering the relevant material.

An enhancement of income made by the Commissioner (Appeals) is not sustainable and liable to be deleted if it is not properly justified.

The Settlement Commission must hear applications where delay in disposal before March 31, 2008, is not attributable to the applicant. Section 245HA(1)(iv) is arbitrary and unreasonable if an applicant faces hardship due to the Settlement Commission's inability to dispose of applications by a specified date.

Procedural rules are the handmaid of justice and should not obstruct the assessment of tax liability in accordance with law. The purpose of assessment proceedings is to correctly determine an assessee's tax liability.

The approval process for reopening assessments is standard, and the PCIT's discussion with the Assessing Officer satisfies procedural requirements.

In proceedings initiated under Section 153A of the Income Tax Act, no addition can be made in the absence of incriminating material found during the search.

An addition for unexplained cash credits or purchases based solely on statements recorded during a survey and a perfunctory enquiry is unsustainable. The Assessing Officer must conduct a proper investigation before making additions.

Where an order of assessment is passed within the period of limitation, the date on which the assessment order and demand notice are served is not relevant.

Where additions are made to income on an estimation basis, the revenue cannot contend that such additions are not real income for the purpose of taxation. It is illogical to argue that an addition is for taxation purposes but not true income.

A decision made in disregard of binding Supreme Court pronouncements is per incuriam and not good law.

The ITAT decision in Surinder Pal Verma V. ACIT is cited as authority for a legal principle, along with several other cases, in proceedings related to income tax law. The exact legal principle is not explicitly stated but implied to be in line with the other cited judgments.

The Assessing Officer can proceed based on information supplied by the department, including material collected during a search, which prima facie suggests suppression of income, provided it is placed at the assessee's disposal.

Advances made by a company to an assessee are treated as deemed dividends on the dates withdrawals are permitted, even if the account is adjusted before the year-end. Subsequent adjustments do not change the fact that notional dividends were received on various dates.

The Supreme Court's dismissal of a Special Leave Petition confirms the Delhi High Court's decision in Pr. CIT v. Adamine Construction (P.) Ltd., establishing a legal precedent.

An Assessing Officer cannot allege a failure to disclose material facts if they did not advert to or utilize such material during the original assessment. The reasons for reopening an assessment cannot be supplemented by subsequent affidavits or oral submissions.

When an Assessing Officer issues a notice for reopening an assessment, the assessee has the right to demand the reasons, the Assessing Officer must supply these reasons, the assessee can raise objections, and the Assessing Officer must dispose of these objections by passing a speaking order.

This case is cited as authority for the principle that income must be sustained in the year of receipt.

A final assessment order is vitiated and cannot be sustained if the Assessing Officer fails to adhere to the mandatory requirement of first passing a draft assessment order under Section 144C(1) of the Income-tax Act. This failure constitutes an illegality, not merely a procedural irregularity, nullifying the entire proceeding.

The High Court held that the Assessing Officer cannot proceed with the assessment under Section 143(3) once a notice under Section 153A has been issued and satisfied the conditions for its invocation, as the broader scope of Section 153A assessment supersedes the limited scope of Section 143(3).

Reassessment proceedings are invalid if the Assessing Officer proceeds without disposing of the assessee's preliminary objections.

Res judicata does not strictly apply to income tax proceedings, but a consistent finding of fact across assessment years, if not challenged, should generally be followed in subsequent years.

Reopening of assessment under Section 147 is invalid if mandatory sanction or approval under Section 151 is not obtained from the prescribed authority. The AO must apply their mind and not proceed in a mechanical manner.

A reassessment notice issued to a non-existent entity, after the entity has ceased to exist, is vitiated. Such a notice is not a curable procedural defect under section 292B.

An assessment made on an invalid return, such as one not signed or verified as required by Section 140, cannot be cured by Section 292B of the Income-tax Act, 1961, as the defect is fundamental and affects jurisdiction.

An omission of a provision by an amending Act amounts to a repeal of that provision. This includes repeals by express omission.

When a statute mandates a specific procedure for performing an action, that procedure must be followed strictly without deviation.

Approval for reassessment under section 151 of the Income Tax Act, 1961, requires the issuing authority to apply their mind to the facts and not grant approval mechanically. A blank subsequent column in the approval form for section 151 may not invalidate the approval if the substance of the reassessment is considered.

Assessment proceedings initiated against a deceased person are void ab initio, and such proceedings cannot be continued against their legal heirs if no notice was served during the assessee's lifetime or on the legal heir as a "deemed assessee" within the prescribed time.

The Assessing Officer must record reasons for not being satisfied with a suo motu disallowance made by an assessee under section 14A, and this satisfaction must be based on the assessee's accounts.

Sanction for reassessment proceedings under Section 151(i) must be obtained from the specified authority within the extended timeline provided by Section 3(1) of TOLA, especially when the three-year period for initiating reassessment expires during the COVID-19 lockdown period. Failure to obtain sanction from the correct authority renders the reassessment proceedings invalid.

In cases involving a committee with divergent opinions, a decision should be taken by majority to avoid stalemate, as intended by the court to ensure the committee acts unanimously. This principle applies to clarifying prior judgments and ensuring consistency in committee decisions.

Courts should give a statute a purposeful or functional interpretation, considering the object and purpose of the amendment, to remove mischief and defects.

Adjustments under section 143(1)(a) are limited to prima facie admissible or inadmissible claims and cannot alter the nature of income or involve detailed examination.

An intimation under Section 143(1) of the Income-tax Act, 1961, even after its substitution with effect from June 1, 1999, is not an 'assessment'. Acknowledgement of a return by ministerial staff, where no tax is payable or refund is due, does not constitute an assessment.

Assessments cannot be made based on mere presumptions and assumptions; corroborative material is required to support any additions.