Landmark Cases on Assessment Procedure

An assessee can choose the Discounted Cash Flow (DCF) method for share valuation under Rule 11UA(2), and the Assessing Officer cannot discard this method to adopt another, like the Net Asset Value (NAV) method, unless the assessee's chosen method or its assumptions are challenged with sound reasoning.

During reassessment proceedings initiated for an escaped income, an assessee cannot seek a review of items that were already concluded in the original assessment, if those items are unrelated to the escaped income.

If a statute prescribes a specific method for performing an action, that method must be followed exclusively, and no other procedure is permissible.

The Income Tax Appellate Tribunal is bound to follow its earlier decisions on identical facts and circumstances. If a bench is not willing to follow an earlier order, it must refer the matter to a larger bench.

The Assessing Officer's satisfaction for reopening a case under section 148 only requires that the information or material leading to the satisfaction be communicated to the assessee, not the disclosure of any specific document. The existence of a possibility of a different view does not prevent the Assessing Officer from exercising jurisdiction when there is material for a reasonable belief of escaped income.

A High Court's opinion expressed in a prior decision is binding on the Income Tax Appellate Tribunal within its jurisdictional territory, even if the Tribunal believes there might be a divergence of opinion.

When a legal heir participates in assessment proceedings after the original assessee has died, a notice issued in the name of the deceased assessee is considered a curable procedural irregularity, not a nullity, and the defect is automatically cured.

An assessment is bad in law and must be quashed if the Assessing Officer fails to dispose of objections against the notice for reassessment by passing a speaking order.

The High Court held that a CBDT circular, if beneficial to the assessee and not withdrawn, is binding on the Assessing Officer and other revenue authorities. This reiterates the principle that such circulars have statutory force and must be followed.

Failure by the Assessing Officer to issue a notice under Section 143(2) after a notice under Section 148 is fatal to the reassessment proceedings, rendering the assessment order invalid.

The Commissioner of Income Tax (Appeals) may rely on previous High Court judgments, including CIT vs. Bank of Punjab Ltd., when deciding appeals.

The Assessing Officer cannot reject a registered valuer's report without providing specific reasons or making a reference to the valuation, and in such cases, the registered valuer's report shall be accepted.

Reopening an assessment based on a mere change of opinion by the Assessing Officer (AO) is not permissible after the substitution of Section 147. The AO can reopen an assessment only if there is tangible material indicating escapement of income, and any such reopening must have a live link to the reasons provided.

An assessment order passed under Section 143(3) of the Income Tax Act, 1961, prevents the initiation of fresh proceedings under Section 147 based solely on a change of opinion.

The appellate authority can consider additional evidence submitted by the assessee under Rule 46A(1)(b) of the IT Rules to decide on the deletion of additions made by the Assessing Officer.

Circulars issued by the Central Board of Direct Taxes are generally applicable to pending proceedings, even if initially argued to be prospective. However, a specific instruction (Instruction 3/11) was held to be prospective in nature.

Courts cannot legislate by supplying words or creating legal fictions not present in a statute, as their role is to interpret existing law.

A High Court decision is cited for its propositions regarding the valuation or fair market value in assessment proceedings. The specific holding is found in paragraphs 22, 23, 24, and 28 of the Arjun Malhotra v. Commissioner of Income-tax judgment.

Adjustments under section 143(1)(a) of the Income-tax Act, 1961, cannot be made for issues where divergent views are possible or the issue is debatable. Such adjustments are permissible only for clear mistakes apparent from the record.

This case is cited as authority for various legal propositions related to income tax law, as evidenced by its inclusion in multiple lists of cited case laws in subsequent judgments.

New facts, circumstances, or changes in law that arise after an Assessing Officer completes an assessment can be considered in subsequent proceedings.

An Assessing Officer's re-assessment should not be set aside entirely if the assessee was properly served with a Section 143(2) notice within the statutory time limit, particularly if no objection regarding service was raised.

A reference under Section 142A can be made even without rejecting the books of account, particularly after the amendment effective from October 1, 2014. Prior to this amendment, the rejection of books of account was a prerequisite for such a reference.

A draft assessment order passed by the Assessing Officer after the final assessment order is not a valid draft assessment order and therefore, the DRP cannot propose any adjustments to such an order.

An assessee is not estopped from claiming that a single assessment should have been made under Section 26(1) even if they previously filed separate returns for parts of a single accounting period, as there cannot be an estoppel against a statute.

An additional ground for claiming deduction cannot be raised before an appellate authority if the necessary evidence was not on record at the time of the original assessment and the assessee cannot demonstrate that the ground could not have been raised earlier for good reasons.

Income offered to tax under a settlement application with the Income Tax Settlement Commission cannot be taxed again in the hands of the assessee, as the settlement order by its statutory scheme is final.

The Assessing Officer cannot invoke Rule 8D to compute expenditure related to exempt income without first recording dissatisfaction with the assessee's suo motu disallowance.

A Supreme Court judgment dismissed by a non-speaking order does not constitute a declared law and is not binding under Article 141 of the Constitution of India.

When determining the date of receipt of Directions from the Dispute Resolution Panel (DRP) by the Assessing Officer (AO) for the purpose of limitation, the date of uploading the DRP's directions is considered the date of receipt, even if the AO claims to have received it later through email. This interpretation prevents parties from exploiting a later date to their advantage and adheres to a singular, unambiguous approach to reckoning limitation.

Double addition of the same amount in two different assessment years is not permissible in law. If an assessee offers an amount in one assessment year, the Assessing Officer cannot tax the same amount in a different assessment year.

The validity of assessment proceedings can be examined during penalty proceedings, even if the assessment itself was not challenged. This is because issues of jurisdiction go to the root of the matter.

The term 'individual' in tax law is not limited to a single human being but can encompass a group of persons forming a unit.

A non-obstante clause in a statutory provision, such as Section 144C(1) of the Income Tax Act, has overriding effect over other provisions in the Act, implying it prevails in case of conflict.

An appellate authority has the power to consider a larger amount in support of a claim if the materials for that claim are already on record, even if the assessee is revising the claim during assessment proceedings.

Courts can examine the circumstances surrounding the enactment of a law, including the Statement of Objects and Reasons, to understand the purpose or object of the legislation.

When no return is filed in response to a notice under section 148 of the Income Tax Act, a separate notice under section 143(2) is not required to make the assessment.

Attachment means taking property into the custody of the law to compel appearance or to seize property for debt payment. It can also mean prohibiting the transfer or disposition of property by court order.

The Assessing Officer must record dissatisfaction regarding the correctness of the assessee's claim for expenditure to earn exempt income before invoking Rule 8D for disallowance under Section 14A of the Income Tax Act.

When an assessment comes before an Appellate Assistant Commissioner (AAC), their jurisdiction extends to the entire assessment, not just the issues raised by the assessee. The AAC can correct errors made by the Income Tax Officer (ITO) even on matters not appealed by the assessee.

Reopening an assessment does not constitute a change of opinion if the original assessment order was silent on the specific issue that forms the basis for the reopening.

Section 139(5) is partly substantive and partly procedural, meaning the right to revise a return under this section should extend to returns filed in response to a notice under Section 148.

An assessment order is void ab initio (non-est) if the Assessing Officer fails to follow the binding directions of the Dispute Resolution Panel (DRP). This failure constitutes a violation of Section 144C(13).

The proposition of law for which this case is cited is not clearly ascertainable from the provided passages, as they only list it as a cited case without detailing the specific legal point decided. However, its prominent placement with sections 147, 148, and 132 suggests it relates to reassessment or search and seizure proceedings.

The taxpayer's appeal is allowed if the Assessing Officer fails to issue a notice under Section 143(2) within the prescribed time limit, rendering the reassessment proceedings invalid.

An assessment order is invalid if the Assessing Officer lacked pecuniary jurisdiction to frame it and failed to issue a notice under Section 143(2).

Where an assessee dies during original assessment proceedings and the AO is aware of this, a reassessment notice issued in the deceased assessee's name and PAN, rather than their legal representative's, is illegal. Consequently, all orders passed pursuant to such notice are void and must be quashed.

Reassessment orders are liable to be quashed if the approval for issuing notice under section 148 was not obtained from the specified authority under section 151(ii).

The issuance of a draft assessment order does not extend the time limit for completing the assessment. If no variations are proposed in the returned income, a draft assessment order is not required.

Additions to income made on a notional basis, based on an alleged foreign bank account that is under serious challenge, are liable to be deleted. This is especially true if prior year additions have already been deleted.