Landmark Cases on Assessment Procedure
1,443 decisions, ranked by how many judgments on BharatTax rely on them.
An order transferring the jurisdiction for an assessment is required under section 127 of the Income Tax Act, 1961, for an assessment to be validly initiated by an officer without territorial jurisdiction.
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.
A revised return obliterates the earlier return filed by the assessee. The assessment must be completed considering only the revised return.
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 reopening an assessment, the Assessing Officer must dispose of any objections filed by the assessee by passing a speaking order before proceeding with the assessment.
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.
Reassessment proceedings are invalid if the Assessing Officer proceeds without disposing of the assessee's preliminary objections.
Where a question of law or fact was decided in an assessee's own case for an earlier assessment year, the Tribunal is justified in relying on that earlier decision for a subsequent year, even if res judicata doesn't strictly apply.
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.
When a legal provision is omitted, action taken based on that omitted provision is invalid, as illustrated by the Supreme Court's explanation of previous judgments in Fiber Boards (P) Ltd.
A decision of the Supreme Court in CIT Vs Rajasthan Spinning and Weaving Mills Ltd. 224 CTR 1 (SC) is cited as authority.
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.
The court clarifies that section 292BB does not override the requirement for a valid notice under section 153C, ensuring that proceedings initiated under section 153C must be based on a proper foundation.
The appellate authority has the power to admit additional evidence if it is satisfied that such evidence was not produced in the first instance due to a sufficient cause.
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.
The Revenue cannot be permitted to reopen previously decided issues in income-tax proceedings, absent any change in the assessee's circumstances, to maintain consistency in assessment.
A notice for reassessment under Section 148 cannot be issued unless the return of income already filed has been disposed of. Reassessment proceedings cannot be initiated while assessment proceedings based on a filed return are still pending.
Service of a notice or requisition under the Income-tax Act must be made in accordance with Section 282(1), which allows for service by post or as if it were a summons under the Code of Civil Procedure, 1908. Rules 12 to 15 of Order V of the CPC are relevant, emphasizing personal service where practicable.
Service of notice by affixture is invalid if it is not done in accordance with the procedure laid down in the Code of Civil Procedure, specifically requiring the association of an independent local person.
Where no incriminating material or evidence is found during a search and seizure action, and the assessment for the relevant year has already been completed and is unabated, no addition can be made.
An assessment cannot be automatically vested with a jurisdictional officer without a formal order under Section 127 of the Income Tax Act. Even intra-city transfers require an order under Section 127.
A notice issued by an Assessing Officer lacking valid jurisdiction over the assessee is invalid. Subsequent proceedings based on such a notice are void ab initio, and cannot be validated by transferring the records or proceedings.
Reassessment proceedings initiated based on documents already on record are invalid. Sanction for reassessment proceedings under section 151, if granted mechanically, renders the proceedings bad in law.
When interpreting a provision in a taxing statute, courts must adopt a construction that preserves its purpose, workability, and efficacy, eschewing interpretations that would defeat or obliterate the provision.
Service of notice under Section 148(1) is a mandatory condition precedent for making an assessment order. Once a notice is issued within the limitation period, the Income-Tax Officer gains jurisdiction to proceed with reassessment.
Decisions of the Tribunal, including Special Benches, that have followed earlier decisions in the assessee's own case or the case of Hero Exports v. CIT, are binding on coordinate benches, especially when the revenue cannot controvert the findings. This principle of consistency is applied to allow additional grounds of appeal.
When the language of a statute is clear and unambiguous, courts must apply it as written, regardless of any perceived harsh consequences. Judges do not have the power to mitigate statutory harshness.
Sanction for reopening an assessment under Section 151 requires approval from the specified authority, and approval from a superior but different authority is invalid. Even if the reopening is within four years, the correct authority must grant approval.
A notice issued under Section 143(2) is a jurisdictional notice, and the absence of such a notice renders the assessment order invalid. Failure to issue a valid notice under Section 143(2) cannot be cured by subsequent actions or findings.
An assessment cannot be reopened merely because the Income Tax Officer forms a different opinion on the facts already examined, especially after the assessee has fully disclosed all material facts.
Proceedings before the Dispute Resolution Panel (DRP) are a continuation of the assessment proceedings, not an appeal, and the DRP acts as a corrective mechanism offering a second look at the draft assessment order before a final, appealable order is passed by the Assessing Officer.
The insurer is liable for compensation for passengers in a goods vehicle. The Supreme Court overruled its earlier decision, holding that the insurer must cover passenger liability in goods vehicles under the unamended Act.
