Landmark Cases on Assessment Procedure

An Assessing Officer cannot reject accounts under section 145(3) solely on the grounds that the assessee, a builder and developer, followed the completed contract method instead of the percentage completion method mandated by AS-7.

A litigant is entitled to know the reasons for the acceptance or rejection of their prayer, as this reasoning is subject to examination at higher forums. Without knowing the reasons, the remedy of appeal is not meaningful.

An assessment order is invalid if the assessee is not granted a reasonable opportunity of being heard before the transfer of their case, even if Section 127 uses the word 'may'. The word 'may' in Section 127 should be interpreted as 'shall'.

The Assessing Officer accepting the assessee's submission by not rejecting it during assessment proceedings amounts to forming an opinion, and reopening on the same issue would be without jurisdiction.

The Tribunal's decision in ACIT v. Haware Construction (P.) Ltd. is authority for the principle that the profit rate, when restricted by the CIT(A), should be reasonable and cover the profits of the appellant, avoiding excessive additions.

The Assessing Officer must assign reasons for rejecting an assessee's explanation to disallow expenses under Section 14A, otherwise, the addition will be deleted.

An assessment order passed based on a draft assessment order issued to a non-existent entity is void ab initio. This applies where a draft assessment order under section 144C was passed in the name of an amalgamating company that was no longer in existence on the date of the order.

An Assessing Officer's decision allowing a claim based on the assessee's detailed written explanation and inquiries made during assessment cannot be deemed erroneous simply because the order lacks elaborate discussion on the matter.

A challenge to the very jurisdiction of the assessing authority to make an assessment can be raised for the first time before any appellate authority.

An order under Section 163, deeming a person as an agent of a non-resident, must be passed after providing that person an opportunity to be heard. Such an opportunity must be given before initiating reassessment proceedings.

An administrative decision can be supported by reliance on Supreme Court decisions.

An opportunity to be heard must be given to the assessee before making any adjustment or disallowance under section 143(1)(a) of the Income Tax Act, 1961.

Where a return is filed in response to a notice under section 148, even if delayed, a notice under section 143(2) must be issued for the assessment proceedings to be valid, following the decision in Hotel Blue Moon.

The ITAT decision in Smt. Jamnadevi Agarwal &Ors (2010) 328 ITR 656 (Mum) is cited in subsequent judgments, indicating its relevance in income tax proceedings. Its specific holding requires further analysis of the full text.

The Commissioner (Appeals) cannot enhance the income of an assessee by introducing a new source of income not considered by the Assessing Officer. Such enhancement is bad in law.

The validity of a reassessment can be challenged in collateral proceedings, even if the original assessment was completed under section 143(3).

Reassessment proceedings initiated based on documents already on record are invalid and void ab initio.

The absence of a pre-generated DIN, or the failure to record reasons and obtain prior approval for manual issuance of a DIN, is fatal to the validity of an assessment order. Compliance with the DIN protocol is a jurisdictional prerequisite, not a curable irregularity.

Concurrent jurisdiction means two authorities have equal powers to deal with a situation in its entirety, not that the same work can be divided between them.

A Commissioner is not justified in not admitting and adjudicating claims made by an appellant under sections 54B and 54F, especially when the Bangalore Tribunal's decision in Rakesh Singh v. ACIT (2012) is relevant.

An intimation issued under Section 143(1) of the Income-tax Act, 1961, does not survive once a notice under Section 143(2) has been issued, and the AO is divested of jurisdiction to issue an intimation under Section 143(1) after issuing a notice for regular assessment under Section 143(2).

A revised return can be filed in respect of an original return that claimed carry forward of loss under Section 139(3). Once a revised return is filed, the original return is considered withdrawn and substituted.

An assessment made without a valid notice under Section 143(2) of the Income Tax Act, 1961, is void ab initio. Section 143(2) mandates service of notice on the assessee to ensure correct income computation.

Additions made by the Assessing Officer are liable to be deleted if similar additions have already been deleted for assessment years. Additions made purely on a notional basis without independent corroboration are also liable for deletion.

A reference to the Director of Valuation under Section 132(9D) is invalid if it is made without rejecting the assessee's books of account, and a subsequent DVO report is also unsustainable if it's based on such an invalid reference.

Procedural rules are intended to aid the administration of justice and should not be used to obstruct or defeat the cause of justice. Substantial compliance with procedural requirements is sufficient when the underlying purpose of the rule has been met.

The omission of a statutory provision is legally equivalent to its repeal, as the terms 'delete' and 'omit' are used interchangeably in legislative language.

The rule of consistency dictates that a position adopted by the tax authorities in a prior year should generally not be changed in a subsequent year, unless there are specific reasons to do so.

A question of an Assessing Authority's jurisdiction cannot be disputed after assessment proceedings are completed. Such disputes can only be decided by the Commissioner or the Board, not by an appellate authority under Section 246.

There is no mandatory requirement to issue a notice under Section 143(2) for assessment proceedings under Section 153A of the Income-tax Act, 1961, as the principles of natural justice are satisfied by other means.

A 'non obstante' clause gives the enacting part of a section an overriding effect in case of conflict with other provisions of the Act or a contract, ensuring its full operation.

In set-aside proceedings, the Assessing Officer's jurisdiction is limited to issues that were before the Tribunal. The Assessing Officer cannot re-examine or examine issues that were not before the Tribunal.

The Assessing Officer may be directed to grant an assessee another opportunity to furnish requisite evidence, especially in the interest of substantial justice.

Approval for reassessment under Section 151 requires the higher-ranking official to apply their mind to the facts and law, not merely provide a ritualistic or formal confirmation. A printed format approval without specific reasons does not satisfy the statutory requirement.

The High Court's power to issue writs under Article 226 is wide but discretionary, and the High Court may refuse relief if an alternative remedy is available.

An appeal is not maintainable if the Assessing Officer accepts the assessee's claim after due verification of documents, especially when the decision is based on an agreement or the assessee has not provided an explanation for the nature and source of credits.

The case is cited for the proposition that Section 247 of the Act lays down the right and power of APL, as confirmed by a Division Bench judgment dated 23.08.2012.

High Courts, in the exercise of powers under Section 260A of the Income Tax Act, cannot interfere with findings of fact made by the Tribunal unless such findings are demonstrated to be perverse.

A return filed under section 153A is to be considered as a return under section 139(1). The obligation to file a return under section 153A remains suspended until the notice under clause (a) of such sub-section is issued.

When an assessment is abated under section 153A, an assessee is entitled to claim deductions or exemptions in the return filed in response to the notice. The ITAT Special Bench has held that a deduction under section 80-IA is permissible in such a scenario.

Reassessment proceedings can be quashed if the reasons recorded do not mention the first proviso to section 147, particularly concerning full and true disclosure of material facts.

The Assessing Officer's disallowance under Section 14A is not vitiated by the mere absence of an express recital of dissatisfaction if a detailed analysis and statutory procedure were followed in computing the disallowance.

The definition of 'eligible assessee' under section 144C(15)(b) delineates two distinct categories of persons, rather than imposing two conditions.

A taxpayer can raise additional claims before appellate authorities, even if not raised during assessment or in a revised return. The Assessing Officer must examine eligibility criteria for claims based on facts available in audited accounts.

An assessment order passed without a DIN, in the absence of exceptional circumstances, cannot be sustained. However, if the DIN was generated and communicated separately, the assessment order may be valid despite the absence of DIN in its body, especially if the issue is stayed by the Supreme Court.

The maximum marginal rate (MMR) of income tax is applied, and surcharge is levied separately if applicable. Surcharge is not leviable if the quantum of income is below a certain threshold.

The Revenue cannot apply different standards to different assessees when accepting the correctness of a judicial decision, without just cause.

Section 153A(1) provides for abatement of pending assessments. If pending and completed assessments were treated the same, there would be no need for the second proviso to Section 153A(1) regarding abatement.

The case is cited for the proposition that the Tribunal's jurisdiction to hear appeals can be invoked by parties who are not directly assessed but have a substantial interest in the assessment proceedings.

An Assessing Officer must pass an order under Section 142(2C) of the Income Tax Act on or before the expiry of the first extension period. Failure to do so may invalidate subsequent proceedings.