Landmark Cases on Assessment Procedure

A subsequent reassessment order under section 147 effaces the original assessment order, requiring a fresh assessment of the entire income of the assessee. The original assessment order is deemed to be superseded by the reassessment order.

A disallowance under section 143(1)(a) for delayed deposit of employee's contribution to PF/ESI is invalid as it constitutes a debatable issue, which falls outside the scope of summary processing under section 143(1)(a).

A High Court's decision can be considered even if another High Court has taken a different view, especially if a Full Bench of the court has analyzed both conflicting decisions.

The Commissioner (Appeals) is not required to record elaborate reasons when upholding an Assessing Officer's order, provided the reasons are clear and explicit, demonstrating consideration of the issue.

The decision in Shree Khedut Sahakari Khand Udyog Mandli Ltd. v. ITO (2019) 108 taxmann.com 258 (Surat-Trib.) is binding authority on identical facts, even when the figures of additions/disallowances vary.

Disallowance under Section 14A cannot exceed the amount of income claimed as exempt.

The exercise of power under Section 131(1A) of the Income Tax Act is contemplated in a situation that arises before the exercise of power under Section 132.

An assessing officer is duty-bound to compute the income of an assessee in accordance with the law, irrespective of any admission made by the assessee. The purpose of assessment is to correctly determine taxable income as per the Act.

The Assessing Officer must record satisfaction regarding the inadequacy of the assessee's claim before invoking Section 14A read with Rule 8D for disallowance of expenditure related to exempt income.

An order passed under section 153C of the Income Tax Act is invalid in the absence of a valid show cause notice.

An Assessing Officer cannot make additions to income based on alleged bogus purchases solely on suspicion from sales tax authority information without conducting an independent inquiry and providing the assessee an opportunity to controvert the seller's statements.

An Assessing Officer can reopen a case under Section 147 even if the reasons for reopening arise from the same record that was part of the original assessment, as long as the initial assessment did not involve a full and true disclosure of all material facts.

Income tax authorities must follow the principle of consistency, meaning that identical issues decided in favour of the assessee in earlier years should be followed in subsequent years, absent any change in facts. This principle is upheld even if the earlier decision was based on specific facts applicable to those years.

An assessee cannot challenge the issue of jurisdiction after the expiry of one month from the date of service of notice. This time limitation is stipulated under section 124(3) of the Income-tax Act.

An assessment order is not bad in law solely for failing to specify the section under which an addition is made, provided the addition is justified on merits.

Delay in filing Form 10-IC, which is a procedural requirement for claiming the benefit of section 115BAA, should not invalidate the assessee's substantive right to such benefit.

A department cannot revisit a matter on identical facts on which the Tribunal has already passed an order that has been followed by multiple coordinate benches.

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.

The court's decision in CIT v. B. Lakshminathan is cited in relation to proceedings under Section 153A of the Income Tax Act, 1961, particularly concerning the assessment of income in search cases.

If a statute specifies a particular manner for doing something, it must be done in that way and no other. Deviating from the prescribed method is impermissible.

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.

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.

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 will not interfere with the orders of the CIT(A) or DRP if the parties have not provided any basis or material to controvert or rebut the findings, except by relying on their previous stands.

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

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.

Facts and circumstances arising after the Assessing Officer completed an assessment can be considered, even if they develop subsequently.

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, following an amendment effective from 2014.

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.

An assessment made on a non-existent entity is invalid. The existence of the person sought to be taxed at the point of assessment is a condition for the validity of the assessment.

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.

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.