Landmark Cases on Assessment Procedure

A High Court decision, Pr. CIT v. Manoj Kumar Vipin Kumar (Rajasthan HC), is cited as a precedent. The court's specific holding is not detailed in the provided snippets, but it is referenced alongside cases discussing the validity of assessment proceedings and the admissibility of evidence.

A non-obstante clause is appended to a section to give its enacting part overriding effect over other provisions in case of conflict. The provisions of the section will operate fully, or the provisions in the non-obstante clause will not impede its operation.

Excess stock found during a survey under section 133A is not automatically taxable as unexplained investment under section 69B if it is part of the assessee's business stock and subsequently included in the closing inventory.

Where an assessee files a return of income in response to a notice under section 148, the Assessing Officer must issue a notice under section 143(2) to frame the assessment, and failure to do so is fatal to the reassessment order.

Income under section 56(2)(viib) cannot be added by rejecting the assessee's valuation report if the AO fails to provide fresh tangible material. Reassessment proceedings initiated without proper basis are invalid.

An order passed under section 148A(d) of the Income Tax Act is invalid if it fails to consider the submissions made by the assessee. This failure amounts to a violation of natural justice and a contravention of the mandatory procedures required for inquiry proceedings under section 148A.

The Dispute Resolution Panel (DRP) should entertain a fresh claim made by the assessee, even if it's presented as an objection, as long as it affects the taxability. This principle is established by following decisions of the ITAT and the Gujarat High Court.

The appellate authority's power to enhance income is restricted to the income that was the subject-matter of the assessment by the Income Tax Officer.

For a precedent to be binding, there must be a conscious consideration of the issue involved. The 'date of regular assessment' is relevant for determining interest payable or receivable by the assessee.

An Assessing Officer can proceed on the basis of a postal department's remark that the assessee has 'left', even if the reason for the remark is not clear. Reassessment cannot be terminated solely on the ground of non-service of notice if the postal department's remark indicates non-delivery.

An Assessing Officer must ascertain bank accounts related to the assessee and work out the peak credit by arranging transactions datewise when making a fresh assessment as directed by a coordinate bench.

Turnover is generally understood as the sale proceeds of goods sold. For purposes of Section 44AB, if an assessee is engaged in speculative transactions where no delivery has taken place, no turnover is effected, and thus no audit under Section 44AB is required.

Jurisdiction under section 153C can be invoked based on a statement recorded under section 132(4) by a "searched person", even if the statement relates to income earned by the assessee.

A revised return cannot be filed solely to make a debatable claim or to seek condonation of delay in filing returns to claim deductions.

The Assessing Officer is not empowered to reject the books of accounts under section 145(3) of the Income-tax Act, 1961, without substantiating the defects and deficiencies.

Books of account are those whose main purpose is to provide credible data and information for filing tax returns. An Assessing Officer must demonstrate discrepancies or errors to reject them.

An assessment order is considered erroneous if it is passed without making any inquiries. However, if an assessment is made after a detailed inquiry and issuing a show cause notice, and the assessing officer takes one of two permissible views, the order is neither erroneous nor prejudicial to the revenue.

A transaction of sale of goods must be under a contract that is consensual. Property in materials does not pass to the other party in a building contract as it does in a contract for the sale of movable property, meaning sales tax does not arise.

An order passed by an officer without jurisdiction is void ab initio and cannot be rectified. Such a defect is incurable and the order deserves to be annulled.

An Additional Commissioner of Income-tax cannot assume authority to make an assessment and pass an assessment order if no specific allocation of such powers has been made in their favour. Such an officer is not competent to act as an Assessing Officer without proper assignment or notification under Section 120 of the Act.

An assessment order under section 143(3) cannot be passed if there has been a non-compliance with a material requirement, such as failing to file a return in the proper statutory format. Non-compliance with a summons might at best lead to a penalty, which if not imposed, indicates no such non-compliance occurred.

A firm and its partners are considered separate legal entities for the purposes of the Income Tax Act.

The Assessing Officer must record their satisfaction before applying Rule 8D for disallowance under Section 14A, as the Supreme Court's decision in Maxopp Investment Limited did not dispense with this procedural requirement.

Appellate authorities cannot sustain a protective assessment order, especially when there is no doubt about the assessee liable for assessment. While parallel proceedings can be taken when there's doubt about who is liable, an appellate authority must arrive at a definite conclusion.

An assessee's intention regarding a temporary vs. final parting with a factory is a factual determination. This determination is not subject to res judicata, allowing authorities to reach different conclusions in subsequent years based on new evidence.

Section 153C of the Income Tax Act, 1961 requires that if the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to the assessee, then the Assessing Officer shall proceed to assess or reassess the income of the assessee under section 153A, 153C.

Where an Assessing Officer (AO) seeks to reject an assessee's book results and make an assessment based on best judgment, they must first identify specific defects in the books of account and seek an explanation from the assessee. If the assessee fails to explain these defects, the AO may then compute income by estimation. Ad hoc disallowances are not justified if no defects in the books are pointed out.

A notice or proceeding under the Income Tax Act will not be considered invalid due to a defect or omission if it serves its intended purpose and causes no prejudice to the assessee, as provided by Section 292B.

The Assessing Officer must conclude that the assessee's books of account are incorrect, incomplete, or unreliable, and formally reject them, before proceeding to make an assessment based on their own estimation.

An assessment notice issued under Section 148 to a deceased assessee without impleading their legal representative is invalid and the proceedings are void ab initio. The notice must be served on the legal representative as per Section 159(2)(b) of the Income Tax Act.

The Assessing Officer must provide the assessee with a copy of the reasons recorded for reopening the assessment, the approval of the competent authority, and the information based on which the notice under section 148 was issued.

The submission of an audit report is directory, not mandatory. The claim for deduction under Section 32AB is contingent on depositing the qualifying amount within the specified time, not solely on the timely submission of the audit report.

The meaning of 'land' under the Punjab Security of Land Tenures Act, for the purpose of determining 'permissible area', is subject to statutory definitions, and definitions from other Acts should not be relied upon if a statutory definition exists.

When there is a conflict between a specific tariff entry and a residuary entry, the specific tariff entry is preferred. Goods should only be brought under the residuary entry if they cannot be classified under any specific entry.

The existence of jurisdictional facts is essential before any authority assumes jurisdiction, and the application of mind to such existence is required. If a jurisdictional fact is absent, the authority cannot act, and any action taken erroneously can be challenged.

Where an assessee makes a suo-moto disallowance under section 14A read with rule 8D, any further disallowance by the Assessing Officer on the same grounds is not sustainable without recording specific satisfaction regarding the assessee's claim.

Ad hoc disallowances and additions based on unserved notices under section 133(6) are not legally tenable. The necessity of purchases like magazines and journals for a business must be considered.

If an application for settlement before the Settlement Commission is allowed and the case is settled, the entire assessment for the relevant assessment years is settled and cannot be reopened.

Tribunal orders are binding on similar facts, and the revenue cannot distinguish them without evidence.

Once an application for settlement is made under Section 245C(1) and accepted by the Income Tax Settlement Commission (ITSC), and a final order is passed under Section 245D(4), the Assessing Officer loses jurisdiction to reopen the assessment. An order under Section 245D(4) is distinct from a regular assessment under Sections 143(1), 143(3), or 144.

The Assessing Officer must conduct independent verification and inquiries to support additions, rather than relying solely on the assessee's claims. The AO's failure to do so can lead to the invocation of specific clauses related to assessment procedure.

A High Court decision on a specific tax issue can be affirmed by the Supreme Court, making it binding precedent.

A notice issued to a deceased assessee in his own name, served on the legal representative, is not void merely because it omits to state that it was served in the capacity of a legal representative.

An order appointing a person as an agent of a non-resident must be in writing, and the agent must be given an opportunity of being heard, to comply with the principles of natural justice and the procedural requirements of Section 163(2).

Where an assessee submits additional evidence before the Commissioner (Appeals) and the matter is remanded to the Assessing Officer for verification but the officer fails to examine the evidence, the case should be remanded again for readjudication.

A person cannot be treated as the statutory agent of a non-resident unless the Assessing Officer has given them an opportunity to be heard regarding their liability.

The Commissioner of Income-tax (Appeals) [CIT(A)] has powers co-terminus with the Assessing Officer (AO) and possesses plenary powers to dispose of an appeal, including the ability to do what the AO could have done and direct the AO to act on matters previously neglected.

An appeal does not lie against an addition to income if the assessee has agreed to it before the Assessing Officer, unless the assessee proves coercion or mala fide.

An additional ground of appeal can be admitted for adjudication even if it raises a legal issue, provided it is not frivolous and does not prejudice the revenue.

Proceedings initiated against a non-existent entity are invalid.