Landmark Cases on Assessment Procedure

Tax authorities have a duty to bring to the assessee's attention any reliefs, deductions, or refunds to which they may be entitled, especially if the assessee omits to claim them. This duty arises even if the assessee demonstrates ignorance or makes errors in their return.

An assessment made without a valid notice under section 143(2) is invalid. The issuance of a notice by a non-jurisdictional officer is equivalent to non-issuance of a valid notice.

A notice issued under Section 153C of the Income Tax Act to an entity that has already been amalgamated is invalid.

Tribunal decisions for a particular assessment year must be followed based on the principle of consistency, even if the assessee is litigating the same issue before the High Court.

The ITAT Jodhpur Bench's decision in Vishal Dembla v. DCIT is cited as supporting authority in multiple later judgments, indicating it likely deals with principles of assessment procedure, evidence, or natural justice relevant to tax proceedings.

The amendment to Section 14A of the Income Tax Act, specifically the insertion of an Explanation by the Finance Act, 2022, applies prospectively and not retrospectively.

A protective assessment must be expressly stated as such by the Income Tax Department. It is made out of abundant caution when there is doubt as to who has received the income.

An assessee can raise the question of the validity of a block assessment in an appeal against a penalty order if the block assessment itself was without jurisdiction.

Income accrues when it is earned, not necessarily when it is received or paid. This applies to options where the income is based on the time elapsed or the option being exercised.

The multiplier method is a sound and legally established principle for calculating compensation in motor accident claims.

A notice issued by an Assessing Officer without jurisdiction is void ab initio. The intention of the legislature can only be ascertained from what it has chosen to enact, not from speculative opinions.

In a best judgment assessment, there is an inherent degree of guesswork involved, and the assessee is responsible for this if they fail to submit proper accounts. The High Court cannot substitute its own judgment for that of the assessing authority.

An Assessing Officer must make independent inquiries to form a belief that income has escaped assessment; initiating reassessment based solely on information from another officer without independent verification or forming their own opinion is not permissible.

Where an assessee dies while assessment proceedings are pending, the Assessing Officer must bring the legal representative on record in compliance with section 159(2) before passing any orders, otherwise the assessment order is not justified.

Section 148 is a substantive provision, while Section 158BC (and by analogy, Section 153C) is a procedural one. Section 153C's non-obstante clause grants broad powers to reopen assessments without the 'reason to believe' safeguard of Section 147.

An award can be set aside for patent illegality if it is contrary to substantive provisions of Indian law, the Arbitration and Conciliation Act, 1996, or the terms of the contract. Such illegality must go to the root of the matter and cannot be trivial.

The date of dispatch of a notice under section 148 is the relevant date for determining if it has been validly issued, not the date of service. However, both issuance and service are mandatory jurisdictional requirements for reassessment proceedings under sections 147 and 148.

The Supreme Court has held that the interpretation of a CBDT circular by the tax authorities, being an executive construction, must be bounded and cannot override statutory provisions or prior court judgments, unless it violates the law.

When considering appeals, Puneet Singh v. CIT has been cited in judgments where the Punjab & Haryana High Court has taken a stance in favour of the revenue, indicating a specific legal interpretation applied by that court.

The powers of an appellate authority are confined within the scope of the assessment order under appeal. A set-aside assessment must adhere to the directions provided by the appellate authority.

An assessment order directing the initiation of penalty proceedings under section 271(1)(c) is deemed to constitute the Assessing Officer's satisfaction for initiating penalty proceedings under section 271(1B). This applies even after amendments to the law.

When interpreting a statute, a non-obstante clause overrides other provisions only when there is a clear inconsistency between the non-obstante clause and the main enacting part.

The Supreme Court decision in CIT v. Modipon Ltd. (400 ITR 1) is authority for the treatment of PLA balance on excise duty and R&D cess, holding that such issues, when decided in favour of the assessee by the High Court and not appealed by the department to the Supreme Court, attain finality.

Information disclosed in a settlement application, or found during settlement commission proceedings, can be used by the assessing officer against the assessee if there is incriminating material for the disclosure. However, if no evidence supports the disclosed income, additions cannot be made based solely on the disclosure.

The assessment of enhanced compensation received by an assessee for compulsory acquisition of land falls under the provisions of Section 145B(1) of the Income Tax Act, 1961, as it represents income that has accrued or arisen in the previous year when it is received, regardless of the year in which the right to receive it accrued. This applies to enhanced compensation or enhanced compensation awarded by any court or other authority.

Trade advances in the nature of commercial transactions are not considered 'advances' under section 2(22)(e) of the Income Tax Act, 1961.

A concluded assessment is not erroneous merely because more material could have been gathered to disprove the assessee's claim, provided the Assessing Officer acted judiciously and conducted enquiries.

An assessment order passed by an officer not authorized under Section 127, or without proper authorization, is void. The Additional Commissioner is an Assessing Officer only if directed under Section 2(7A) read with other relevant provisions.

Sibia Healthcare (P) Ltd. v. DCIT is cited as a precedent in appeals concerning financial years 2014-15 and subsequent years, in conjunction with other tax cases.

Where no incriminating material is discovered during survey proceedings that pertains to the assessee, and submissions before the CIT(A) have not been considered, such non-consideration and lack of material can be grounds for appeal.

A case concerning the jurisdiction of an Additional Commissioner, it holds that an assessment order passed by an Additional Commissioner is without jurisdiction if there is no specific order under Section 127 of the Act transferring the case to that officer.

Reassessment proceedings are liable to be quashed if the Assessing Officer relies solely on third-party information without independently applying their mind to the facts and forming a belief of escapement of income.

The assessable value of imported goods is determined by the price at which such or like goods are ordinarily sold or offered for sale, and this value should not be rejected if the transaction is at the contracted value without allegations of overpayment to the supplier.

This case is cited as authority for the directions given by the Apex Court regarding the formation and purpose of the Committee on Disputes (CoD) or its predecessors, aimed at preventing the frittering away of state resources in inter-departmental litigation.

An assessment order framed in violation of the mandatory prescriptions of Section 144C is a nullity. This principle is supported by numerous judicial decisions, including JCB India Ltd. v. Dy. CIT.

Completion of assessment requires determination of tax liability and issuance of a demand notice, but not necessarily service of the demand notice on the assessee for the purpose of limitation.

An Assessing Officer cannot resort to Section 143(1)(a) of the Income Tax Act, 1961, for issues that are highly debatable.

Assessment orders based on defective notices under Section 147 read with Section 148 cannot be sustained. The issuance of a valid notice under Section 143(2) is also crucial before framing an assessment order, particularly when a return has been filed.

When an assessee surrenders undisclosed income during a search action, it is not mandatory to charge tax at the rate prescribed under section 115BBE of the Income Tax Act.

An Assessing Officer cannot refer a case to the Director of Valuation under section 142A without first rejecting the assessee's books of account.

An assessee is permitted to correct or modify a deduction once claimed under a particular section, as the Income Tax Act does not debar such modifications. The Assessing Officer retains the authority to examine the deduction claim and make necessary additions or disallowances.

The Income Tax Appellate Tribunal (ITAT) considers arguments regarding additions made under Section 68 of the Income Tax Act, concerning loans and share application money, and arguments against such additions on merits. The tribunal's decisions often rely on the findings of lower authorities, including the Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)).

A special bench of the ITAT held that an assessee can claim an enhanced deduction under Section 153A proceedings, which are comparable to Sections 147/148, even if the original return was filed under Section 139(1). This is because Section 153A proceedings provide an opportunity for making fresh claims.