Landmark Cases on Assessment Procedure

The initiation of reassessment proceedings under Section 147/148 is invalid if the required prior approval from the competent authority under Section 151 is not obtained, rendering the entire proceeding void ab initio.

Forms provided by a rule-making authority, being delegates of the legislature, cannot override a statutory provision and are subservient to legislation. Forms facilitate implementation and cannot supplant the law. Also, interest under section 234B, being compensatory, cannot be charged if taxes have already been paid.

The situs of the Assessing Officer at the time of framing an assessment determines the jurisdictional High Court for entertaining an appeal. Orders under Section 201 are considered akin to an assessment.

The case is cited for the principle that the Assessing Officer (AO) should consider the assessee's plea regarding genuine transactions made through cheque, particularly when relying on judicial pronouncements concerning the failure of the assessee to establish genuineness.

Service of notice by affixture is a nullity in the absence of a local witness.

The facts of NTUC Income Insurance Co-operative Ltd. v. DDIT were distinct from the present appeal, as in the former, the Assessing Officer had communicated reasons for reopening and confirmed compliance with GKN Driveshafts India Ltd. conditions.

A revised income tax return offering additional income is not acceptable if the assessee cannot establish an inadvertent mistake or omission in the original return, and instead appears to be a change of opinion to correct a deliberate omission.

A reference under section 142A cannot be resorted to unless contingencies are reflected on the record. This principle has been upheld in subsequent judgments.

A regular assessment order passed under section 143(3) raises a presumption that it was passed after due application of mind. Similarly, judicial and official acts are presumed to have been regularly performed.

A surcharge imposed by the Finance Act is a special addition to taxes on income, and its legislative history traces back to its recommendation in the report of the Committee on Indian Constitutional Reforms.

A decision that disregards an earlier binding precedent from a coordinate bench is considered per incuriam and lacks precedential value. Such a decision cannot form the basis for referring a matter to a special bench, as this is reserved for cases with conflicting binding precedents.

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.

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.

The Assessing Officer's failure to consider an assessee's objections before passing an order under Section 148A(d) violates natural justice and mandatory procedures 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.

ITAT decisions in favour of the assessee on identical issues should be affirmed, especially when the revenue does not dispute the proposition or provide contrary decisions.

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.

The assessment order can be remanded to the Assessing Officer for reconsideration if necessary facts for deciding the issue are available in the paper book.

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.

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 passed without conducting proper enquiries is considered erroneous.

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.

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 Rent Act prioritizes the landlord's personal necessity, allowing for swift eviction of tenants by cutting delays and plugging loopholes. This classification of landlords with personal needs is a special class for special treatment in the public interest.

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 entry should be preferred. Resort cannot be had to the residuary item if goods can be brought under any specific item by any reasonable process of reasoning.

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.

Once a settlement is allowed and the case is settled by the Settlement Commission, the entire assessment for the relevant assessment years stands settled and cannot be reopened by the Assessing Officer.

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.

A High Court decision affirmed by the Supreme Court regarding income tax issues has persuasive value.