Landmark Cases on Assessment Procedure

Reopening of assessment proceedings based on an audit party's observation is valid, provided there is prima facie material to support the reopening.

An Assessing Officer can initiate reassessment proceedings under Section 147 even if a scrutiny notice under Section 143(2) was not issued within the prescribed time, provided the conditions for Section 147 are met. An intimation under Section 143(1)(a) does not preclude recourse to Section 147.

Disclosure of primary and material facts necessary for assessment is the assessee's duty, not to draw legal or factual inferences for the Assessing Officer.

A consistent position adopted by the tax authorities in prior assessment orders should generally be maintained in subsequent years, absent new contrary evidence or circumstances. This principle of consistency aims to prevent arbitrary changes in tax treatment.

A satisfaction note under Section 153C of the Income Tax Act is not invalid on hyper-technical grounds for incorrect terminology, provided the Assessing Officer was satisfied with the seized documents' contents.

The judgment of Sarla Handicrafts (P.) Ltd. v. Addl. CIT, 296 ITR 94 (P&H) was relied upon by revenue authorities. However, this decision, along with others cited by the revenue, was subsequently overruled.

A finding of fact by the Income-tax Appellate Tribunal can be challenged as erroneous in law under section 66(1) if it is not supported by any evidence or is perverse.

A protective assessment is permissible when there is doubt regarding the ownership of income. However, a protective assessment cannot be made if the Assessing Officer has already arrived at a definite conclusion regarding taxability and ownership.

An additional ground on the issue of subsidy can be raised for the first time before the Tribunal and admitted.

If the language of a statute is plain and capable of only one meaning, that obvious meaning must be given to the provision. This principle applies to statutory interpretation, including provisions like Section 14A which cannot be extended to Section 115JB.

The powers of the Commissioner (CIT) exercising revisional jurisdiction under section 264 of the Income Tax Act, 1961, cannot override statutory provisions like sub-section (5) of section 80A, which mandate specific conditions for claiming deductions.

An Assessing Officer cannot delegate their powers and functions to a special auditor or chartered accountant under Section 142(2A) of the Income Tax Act. Scrutinizing and verifying entries is within the Assessing Officer's own purview and does not necessitate engaging external professionals for the audit.

Tribunals need not reproduce the detailed and reasoned findings of the Commissioner of Income-Tax (Appeals) if they concur with the CIT(A)'s view. This procedural rule prevents unnecessary repetition of detailed analysis.

Where an assessee's books of account are audited and the auditor provides no adverse comments, the Assessing Officer is generally wrong to reject the books and make additions to income.

The taxpayer has a duty to disclose all primary and material facts necessary for assessment fully and truly. The determination of what constitutes material or primary facts depends on the specific facts and circumstances of each case, and no universal formula can be applied.

Where the Assessing Officer has consistently followed a particular view in previous assessment years, they cannot depart from that view in a subsequent year if there has been no change in law or facts.

Confidential information disclosed to the Income Tax Settlement Commission in an application that is not admitted under section 245D(1) cannot be used by the Assessing Officer to make additions to income.

An appeal before the Tribunal is not maintainable if the Assessing Officer has accepted an issue in the remand report furnished before the Commissioner (Appeals).

In the absence of comparable cases or any evidence on record, the Assessing Officer cannot make additions to the income.

Section 2(22) of the Income-tax Act creates a legal fiction, treating certain receipts or parts thereof as dividends for income tax purposes, and it must be interpreted strictly due to its scope.

An assessment order is bad in law if a notice under section 143(2) is not issued. However, if the assessee does not file a return within the time specified in a notice issued under section 148, and the return is treated as invalid, the Assessing Officer may not need to issue a notice under section 143(2).

The Assessing Officer is bound to complete an assessment within the time limit prescribed under Section 144C(13) of the Income Tax Act, 1961, after receiving directions from the Dispute Resolution Panel.

The period of limitation for passing an assessment order under section 144C(13) is computed from the date the Dispute Resolution Panel's (DRP's) directions are deemed to have been received, which is when they are uploaded on the ITBA portal.

Once an officer exercises jurisdiction in a matter, it excludes the jurisdiction of all other officers.

Courts interpret the law as it stands and cannot legislate. If a law is misused or subject to abuse, it is for the legislature to amend it, not the judiciary to supply a casus omissus.

Payments from a closely held company to a concern in which a shareholder has substantial interest may be treated as deemed dividend under section 2(22)(e) of the Income Tax Act, 1961, if the conditions are met. However, if such amounts are repaid and the subsidiary's ledger account becomes a debit balance reflecting as sundry debtors, it supports the assessee's case.

An assessment based solely on incomplete or incorrect third-party information without proper independent inquiries by the Assessing Officer is not valid. The Assessing Officer must controvert the direct material presented by the assessee.

An income tax officer can deviate from an assessee's regularly employed accounting method only if, in their opinion, profits and gains cannot be properly deduced from that method. Even if the accounts don't show the true figure, the true figure can still be accurately deduced from them.

This case is cited as precedent in discussions of various tax matters, including assessment procedures and specific sections like 132 and 153C, often in conjunction with other cited cases.

The Assessing Officer's (AO) order is liable to be set aside if the AO merely follows the Transfer Pricing Officer's (TPO) order without properly considering directions from the Dispute Resolution Panel (DRP). This principle applies even when comparables used by the TPO are identical to those in the assessee's case.

For assessments under section 153C read with section 153A, normal assessments are abated and the assessment is completed under section 153C.

This case is cited as authority for issues related to additions made during assessment proceedings, forming part of a list of precedents referenced in subsequent judgments.

The court cites Amarjit Singh v. Income-tax Officer, Ward-1, Phagwara for a proposition related to the assessment procedure, as indicated by its inclusion in a list of cases presented for a Delhi tribunal matter concerning assessment years 2009-10 to 2015-16. The specific holding cannot be determined from the provided text.

The tribunal considers the facts and circumstances of the case, submissions of the appellant, and the assessment order when deciding a matter.

The appellate authority (AAC) cannot enhance an assessee's income by considering new sources not examined by the Assessing Officer. The power of enhancement is limited to the income sources already subject to the Assessing Officer's consideration.

A plaint cannot be rejected based on the defendant's allegations in a written statement or an application under Order VII Rule 11 CPC. The court must consider only the averments made in the plaint itself.

Where the Assessing Officer correctly decides that Section 144C is not applicable because there is no variation in the returned income, a draft assessment order is not required.

An Assessing Officer can rely on original assessment records when recording reasons to believe income has escaped assessment, even if the initial assessment was processed under Section 143(1).

Reopening an assessment without providing the assessee with the sanction obtained under section 151 of the Income Tax Act, despite a written request, violates principles of natural justice and can be fatal to the reopening.

A direction contemplated by Section 153(3)(ii) must be an express direction that is necessary for the disposal of the case before the authority or court.

The date of handing over documents to the AO of a non-searched person is considered the date of search for the purpose of Section 153C, determining the six-year block period for reassessment.

An Assessing Officer cannot interfere with accounts of an assessee engaged in life insurance business if they are drawn up in accordance with the First Schedule to the Income Tax Act and satisfy the Insurance Act's requirements. The figures in such accounts are binding on the Assessing Officer.

An assessee can be subjected to reassessment proceedings even if the original reassessment proceedings were not completed or concluded, provided that fresh notice is issued for the subsequent reassessment.

An order for the transfer of a case, even within the same city, must be on record. The explanation to Section 127 of the Income Tax Act clarifies that all proceedings, pending or future, stand transferred upon such an order.

An incorrect allowance in an earlier assessment year does not bind the revenue in subsequent years, as each assessment year is independent. The assessing officer has a duty to ensure correct computation of taxable income.

A definition under Section 3 of the Income Tax Act is not permissible if it is inconsistent with other provisions. The interpretation of 'any previous year' refers to the previous year relevant to the assessment year concerned.

An Assessing Officer has 'reason to believe' that income has escaped assessment if there is a direct nexus between the tangible material available on record and the belief formed.

Distance is measured by road, not straight line, from the outer limits of a municipal jurisdiction. A 25-kilometer distance for tax purposes is calculated from the outer limit of the Brihanmumbai Municipal Corporation (BMC).

The Supreme Court has established that compensation for loss of love and affection should be a uniform amount, often cited as ₹25,000, to ensure consistency across judgments.

Administrative instructions issued by the Central Board of Direct Taxes (CBDT) under section 119 of the Income-tax Act are binding on income-tax officers. These instructions, when issued under section 119(2)(a), can extend timelines for actions like issuing notices under section 143(2), and non-compliance with these binding instructions can render subsequent actions invalid.