Landmark Cases on Assessment Procedure

The revenue cannot issue an intimation under Section 143(1)(a) after a notice for regular assessment has been issued under Section 143(2). This is because issuing a notice under Section 143(2) implies that a regular assessment is underway, making a subsequent intimation under Section 143(1)(a) inappropriate.

The law applicable to tax is the law in force on the 1st day of April of the relevant previous year. Later amendments, even if declaratory, do not apply retrospectively to prior assessment years if they alter the fundamental tax liability.

The residential status of an assessee is determined by the control and management of its affairs during the previous year in which the income arises. Objections regarding the place of assessment cannot be raised in an appeal against the assessment order under the Income Tax Act.

Assessment or reassessment under Section 153C need not be based on incriminating material found during the search, provided the Assessing Officer is satisfied that the seized or requisitioned materials belong to another person.

An Assessing Officer cannot reopen an assessment based solely on the dictates of another person or authority; the reasons for reopening must originate from the Assessing Officer's own evaluation of the law and facts.

Enquiries conducted through foreign references, even if ongoing for an extended period, do not automatically render subsequent assessment proceedings invalid, especially when no adverse findings are made.

The Commissioner of Income-tax (Appeals) is not competent to give directions to the Assessing Officer concerning assessment years that are not under appeal before him.

Loans or advances given in earlier years, which have been assessed as deemed dividend, should be reduced from the accumulated profits when determining the amount taxable under section 2(22)(e) of the Income Tax Act.

A notice issued under section 147 or 148 is bad in law if it is issued to a person who is not the principal officer of the company or if the Assessing Officer has not applied their mind to the facts and reasons before seeking approval under section 151.

When an appeal is filed against an assessment order, the assessment case is thrown open, and appellate proceedings are considered a continuation of the assessment proceedings, allowing assessees to raise grievances not previously agitated.

An assessment order passed under section 153A read with section 143(3), after obtaining approval under section 153D, cannot be revised under section 263.

The Gujarat High Court decision in Pr. CIT vs. Shardaben Arvindbhai Patel serves as authority on principles that have been subsequently followed and reiterated by other High Courts, including Gujarat, Delhi, and Bombay.

The reopening of a tax assessment under Section 147(b) is valid if based on factual information provided by an audit party that highlights a fact overlooked by the Assessing Officer, rather than a question of law.

Where an assessee files a return in response to a notice under section 148, even if delayed, the Assessing Officer cannot dispense with the requirement to issue a notice under section 143(2). A delayed return filed in response to a section 148 notice is not invalid or non-est.

Section 153A of the Income Tax Act, 1961, allows for assessment or reassessment of income of a person based on documents found during a search or requisition. For Section 153C to be attracted, a document must be 'speaking' and prima facie incriminating.

Failure to file Form 10-IE by the due date does not automatically disentitle an assessee from opting for the new tax regime under Section 115BAC if the form is available with the CPC at the time of processing the return. The requirement of filing Form 10-IE is considered procedural and directory, not mandatory.

Approval granted under section 153D of the Act and assessment framed under section 153A of the Act are invalid if the ratio laid down in the cited decisions is followed.

An assessee cannot revise their income tax return by filing a revised statement of income after the original return has been filed, except through the mechanism provided under Section 139(5) of the Income-tax Act, 1961.

A valid satisfaction of the Assessing Officer is a mandatory prerequisite for initiating proceedings under section 153C of the Income-tax Act, 1961.

Action under Section 153C can only be taken for assessment years that are likely to be influenced or impacted by the material discovered during a search.

Reassessment proceedings initiated by an Assessing Officer who does not exercise their jurisdiction independently but acts at the behest of a superior authority are invalid due to the non-satisfaction of a condition precedent.

A later authority cannot unsettle an earlier finding if no fresh facts were available, especially when all relevant facts were considered in the earlier decision. This principle applies when the nature of the assessee's business, accounts, and payments remain unchanged.

ACIT v. Viacom18 Media (P.) Ltd. is authority for the proposition that certain decisions are in favour of the assessee.

Reopening an assessment is invalid if the Assessing Officer does not state that the assessee failed to disclose all material facts fully and truly. The absence of such a specific point in the reasons recorded renders the reopening bad in law.

A singular different fact or point can alter the precedential value of a judgment. Provisions of a statute must be read as they are, without adding or removing anything, when the language is clear and unambiguous.

An adjudication is conclusive not only regarding the actual matter determined but also all other matters that parties might have litigated and had decided, including those incidental or essentially connected to the subject matter of the litigation.

In matters of taxation, the principle of res judicata does not apply because each year's assessment is final only for that specific year and does not govern subsequent years.

A decision is distinguished when it is considered inapposite to the facts of a later case, not when there is a conflict in legal principles. This court's decision in Spice Enfotainment does not conflict with Skylight Hospitality LLP.

The Gujarat High Court's decision in Jayantibhai Patel v. CIT is distinguished by other High Courts, indicating it is a significant ruling that has been considered in subsequent analyses of tax law.

An additional ground of appeal relating to a legal plea can be raised at any stage, and there is no prohibition on the jurisdiction of an authority to consider fresh claims made by the assessee.

When an assessment order is vacated due to an irregularity, proceedings are restored to the stage before the error, allowing the Assessing Officer to reconsider the matter afresh.

The court repels the revenue's contention that a case pertains to central charges, indicating this factor does not automatically override other considerations in assessment proceedings.

Instructions and guidelines issued by tax authorities cannot override specific provisions of the Income Tax Act.

A CBDT circular or explanatory memorandum cannot modify or curtail the clear meaning of a statutory provision under the Income Tax Act. Such circulars cannot override the law.

An earlier year's appellate decision on a matter is binding for subsequent assessment years if there are no changes in circumstances, as per the ratio laid down in Taraben Ramanbhai Patel v. ITO.

An assessment under section 143(3) read with section 153A/153C of the Income Tax Act is invalid if section 143(2) of the Act is not followed.

Decisions of a High Court are binding only within its territorial jurisdiction. A decision of a non-jurisdictional High Court has persuasive value but is not binding on another High Court or Tribunal.

Proceedings are a nullity when the authority initiating them lacks the fundamental power to do so. Conversely, an order is not a nullity if it arises from an irregular exercise of existing jurisdiction, such as failing to confront the assessee with evidence.

Central Board of Direct Taxes (CBDT) circulars are binding only on departmental authorities and do not restrict the discretion of income tax authorities in making assessments.

A claim or allowance cannot be made in completed assessments, as doing so indirectly would permit what cannot be done directly.

An assessment order passed under section 143(3) is bad in law and liable to be quashed if statutory notices initiating assessment were issued by treating the assessee in a particular status, and this status is changed while framing the assessment.

An assessee cannot claim a deduction by way of a letter before the Assessing Officer unless a revised return is filed. The Supreme Court's decision in this case was limited to the assessing authority's power to entertain claims otherwise than by revised return and did not affect the Tribunal's powers.

A partnership firm is not a legal entity distinct from its partners and therefore cannot be a partner in another partnership firm. An individual, HUF or firm entering into a partnership must be a person recognised by law.

Interest on securities is taxable only on the specified dates when it becomes due for payment, not on an accrued basis, especially after the deletion of Section 18 of the Income-tax Act, 1961, and insertion of the third proviso to Section 145(1).

Clarificatory circulars issued by the Central Board of Direct Taxes are relevant for interpreting statutory provisions. The court also indicated that legislative intent, rather than literal interpretation, should guide statutory construction, referencing a 'doctrine of purposive construction'.

Proceedings under Section 127 of the Income Tax Act are independent of assessment proceedings, and remedies for grievances arising from a Section 127 order lie elsewhere.

A best judgment assessment cannot be invoked solely because a business has made low profits in a particular year. The Assessing Officer must demonstrate specific errors or deficiencies in the books of account before rejecting them and resorting to estimation.

An Additional Commissioner of Income-tax cannot pass an assessment order if no specific allocation of powers has been made in their favour for conducting such an assessment.

A statutory provision is presumed to have prospective effect unless it is expressly stated or clearly implied to have retrospective effect.

An assessment made by the Assessing Officer is invalid if no notice under Section 143(2) has been served upon the assessee within the prescribed period.