Landmark Cases on Assessment Procedure

The distinction between the passing of an order and the issuance or communication of an order is a relevant legal consideration.

The absence of prior approval from the Joint Commissioner of Income Tax under section 274(2) does not automatically render the Assessing Officer's order void ab initio. The matter can be decided afresh after obtaining the necessary approval.

Reasons recorded for reassessment must be based on material that has a live nexus with the belief of escapement of income.

The Assessing Officer cannot use the same books of accounts that were rejected for the purpose of making other additions. This principle is established through multiple High Court decisions.

The rule of consistency should not be applied to perpetuate an anomaly or a patently wrong view taken in the past.

Income-tax authorities are bound by the sales tax authorities' acceptance of an assessee's sales tax returns and cannot scrutinize them without a difference or variation in closing stock by the competent sales tax authority.

A reference to the Director of Valuation (DVO) under section 142A cannot be the foundation for rejecting the books of account if the Assessing Officer (AO) has not already rejected them. If the AO makes a reference to the DVO without first rejecting the books of account, the reference is invalid.

Deductions allowed in earlier assessment years should not be withdrawn unless circumstances have changed, adhering to the principle of consistency in tax matters.

An amending legislation's scope and retrospectivity are discussed, holding that vested rights exist in substantive law, but not in procedural law. Laws concerning forum and limitation are procedural, while the right of appeal is substantive.

Assessments under Sections 153A and 153C of the Income Tax Act are now affirmed by the Supreme Court, following the object and purpose of their insertion.

The Delhi High Court in CIT v. Lahsa Construction P. Ltd. is cited as a precedent by other courts and tribunals when deciding similar circumstances in favor of the assessee.

An Assessing Officer who has allowed a deduction under section 80-IB cannot later withdraw or withhold it in a subsequent assessment year. The Assessing Officer is restricted from re-examining the question of eligibility for relief once it has been granted.

The Assessing Officer cannot estimate income without rejecting the assessee's books of accounts. This principle emphasizes the importance of challenging and rejecting accounting records before resorting to estimation.

Incriminating material is required for additions in unabated assessment years. Statements recorded cannot be treated as incriminating material.

Non-compliance with notices issued under section 133(6) alone is not a sufficient basis to deny the genuineness of expenditure incurred by a company. The assessee's obligation extends to providing correct names and addresses of parties, not ensuring their response.

Appellate authorities, including the CIT(A) and potentially the Assessing Officer on remand, have the jurisdiction to consider additional grounds or claims raised by the assessee during appellate proceedings, even if not originally made before the Assessing Officer.

An assessment framed by an officer not empowered to exercise the functions of an Assessing Officer is illegal and void ab initio, especially in the absence of a specific order under Section 120(4)(b) authorizing concurrent jurisdiction.

Allowing losses to be considered in a return of income filed under section 153A is permissible.

Where an assessee provides a computation of inadmissible expenditure under Section 14A, the Assessing Officer (AO) must discuss this computation in the assessment order. If the AO fails to do so, their disallowance based on Rule 8D may be considered unsustainable.

An appellate authority cannot re-characterize an addition made by the Assessing Officer under one section of the Act to another section without issuing a show cause notice. A reference to the Departmental Valuation Cell for determining investment in construction cannot be deemed to be without the authority of law.

Where an initial assessment is processed under section 143(1), the Assessing Officer is not required to find fresh tangible material to form a belief that income has escaped assessment for the purpose of reopening.

Amendments to Section 153C of the Income Tax Act, 1961, do not affect vested substantive rights, and no liability is automatically imposed once conditions are met; proceedings must follow due process.

A revised return cannot be used to rectify a deliberate omission or wilful mistake made in the original return.

A penalty notice under section 271(1)(c) is not invalid solely because the assessing officer failed to strike off the inappropriate portion of the notice describing the alleged offense, provided the assessee understood the nature of the offense.

A notice for reassessment issued in the name of a deceased person is void ab initio and cannot be validated by curative provisions like Section 292B or 292BB, as issuing notice to the correct person is a fundamental jurisdictional requirement.

The signing of an assessment order by the Assessing Officer is a mandatory requirement and failure to do so constitutes a curable procedural defect.

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 Assessing Officer has the discretion to select an accounting method and the assessee cannot compel the department to adopt a particular method.

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.

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

An Assessing Officer's assumption of jurisdiction under section 153A is invalid if it is predicated on an assessment year for which the AO is precluded from making further additions.

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's decision to allow a writ petition is subject to the outcome of a Supreme Court appeal on a related prior decision, and parties are granted liberty to approach the court further.

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.

An order remanding an issue regarding the write-off of temporary shade to the Assessing Officer for decision in light of the Bangalore Bench Tribunal's ruling in Bhima SSK Ltd. v. DCIT (22 TTJ 21) is justified.

Block assessments for undisclosed income are independent of regular assessments and operate in a separate field. Undisclosed income under Chapter XIV-B is classified and assessed separately at a higher tax rate.

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.

An Assessing Officer cannot enhance income beyond what was originally assessed when giving effect to a set-aside order, unless specifically directed by the appellate authority. The powers of an appellate authority are confined to the subject matter of the appeal.

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.

The validity of assessment proceedings cannot be challenged during penalty proceedings.

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 High Court may not enhance the quantum of purchases beyond that of the Assessing Officer, especially when the purchases corresponded to sales reflected in the assessee's returns and books of account.

Where an assessment order is passed within the period of limitation, the date of service of the assessment order and demand notice 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.