Landmark Cases on Assessment Procedure

A jurisdictional fact is a prerequisite for a court or tribunal to assume jurisdiction, and if it is wrongly assumed, the order can be challenged through a writ of certiorari.

Reassessment proceedings under Section 147/148 are invalid if the time for issuing a notice under Section 143(2) for regular assessment has not yet expired.

The Appellate Assistant Commissioner's (AAC) power to enhance an assessment is broad and not limited to the specific items of appeal, but it is restricted to income that was originally before the Income Tax Officer and cannot introduce entirely new sources of income.

Proceedings before the Dispute Resolution Panel (DRP) are a continuation of the assessment proceedings, not an appeal. The DRP's role is to act as a correcting mechanism, providing a second review of the proposed assessment order.

Assessment proceedings initiated against a deceased person are void. Once an assessee dies, assessment proceedings can only continue in the name of their legal representative, to the extent of the deceased's estate.

Minor irregularities in books of account cannot be the sole basis for rejection of the books or for making an estimated trading addition, especially when the assessee has provided explanations for discrepancies. The case distinguishes itself by focusing on receipts not brought into account rather than expenses claimed.

The faceless assessment regime under section 151A is a jurisdictional imperative. If jurisdiction is statutorily vested in the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is void ab initio.

The validity of notice service is a question of fact, and procedural irregularities in service by affixture do not automatically render the service non est if the assessee had knowledge of the proceedings and suffered no prejudice.

An assessment order that is not served on the assessee before the assessment's time-barring date is considered non-est, meaning it is void and without legal effect.

Failure by the Assessing Officer to record reasons demonstrating how seized material relates to the determination of another person's total income invalidates notices issued under Section 153C and all subsequent proceedings. The Supreme Court's dismissal of the department's SLP affirms this.

The selection of cases for scrutiny must be completed within the time prescribed by CBDT instructions. The department is bound by its own standards and cannot act with discrimination or selectively apply them.

The High Court decision in Commissioner of Income Tax, Kolkata v. Veerprabhu Marketing Limited (2016) is cited as part of a legal position regarding assessments under sections 153A and 153C, which has been affirmed by the Supreme Court.

An assessment for an earlier year can be reopened based on a finding of fact made from fresh material discovered during the assessment for a subsequent year. This is permissible even if the earlier assessment involved a full and true disclosure.

The omission of a correct section number in assessment orders does not invalidate additions made by assessing authorities, particularly when the amounts relate to unexplained investments under Section 69B.

A coordinate bench decision in the assessee's own case for earlier assessment years is relevant to the current issue.

An Assessing Officer (AO) is expected to conduct a detailed inquiry during assessment proceedings under Section 143(3) and should not accept the assessee's claims at face value. A failure to investigate glaring issues amounts to a lack of proper inquiry.

A statute enacted for the benefit of the community as a whole may be considered retrospective in nature, even without an express provision for it.

Fresh legal claims can be made during assessment or appellate proceedings, and the Assessing Officer should consider these claims for correct deductions after verification.

The Assessing Officer accepted the assessee's claim of being in the construction business and its use of the project completion method, and the Revenue did not take remedial measures under sections 263 or 147, indicating acceptance of the assessment.

Proceedings under section 153C are invalid if the seized material mentioned in the satisfaction note does not relate to the specific assessment year under consideration. This requirement was upheld by the Bombay High Court and the Supreme Court.

The established principle of interpreting tax laws in favour of the assessee does not apply to deductions, exemptions, and exceptions, which are only allowed when plainly authorised by law.

An Assessing Officer's assumption of jurisdiction under Section 147 is invalid if the officer does not independently apply their mind but merely acts at the behest of a superior authority. The satisfaction recorded must be independent, not borrowed or dictated.

Passing journal entries to record liabilities does not constitute acceptance of a loan or deposit and therefore falls outside the ambit of Section 269SS, preventing penalties under Section 271D.

An association of persons (AOP) is constituted when individuals voluntarily combine for a common purpose or action, aiming to produce income. Merely sharing income or jointly owning property is insufficient to form an AOP.

Once an assessment is reopened for a valid reason under Section 148(2), the Assessing Officer can bring to tax any escaped income that comes to their notice during the reassessment, even if it was not the original basis for reopening.

The court references Kanhaialal Jangid v. ACIT as part of a list of High Court judgments, indicating its authority or relevance within the context of the preceding statement, which is truncated in the provided snippets.

Tribunals must follow their own prior decisions unless the prior decision was plainly erroneous and a vital point was not considered or a statutory provision was not brought to the court's notice. An erroneous order does not create a binding precedent.

The Assessing Officer must record proper satisfaction before invoking the provisions of Rule 8D for disallowance of expenditure relatable to exempt income.

Failure to follow the procedure laid down in Section 144C(1) of the Income-tax Act, 1961, constitutes a breach of mandatory provisions, rendering the final assessment order void.

An Income Tax Officer issuing a notice under Section 148 of the Income Tax Act, 1961, must have jurisdiction, and such jurisdiction can be affected by CBDT instructions regarding the territorial jurisdiction of income-tax authorities.

The Supreme Court may not interfere in an appeal if the High Court followed a precedent on similar facts, particularly when that precedent has been further upheld.

A casus omissus (an omission that should have been included) should not be readily inferred when interpreting a provision of the Income Tax Act.

An Income Tax Appellate Tribunal, regardless of its location, must respect a High Court's decision from another state, provided no contrary High Court decision exists. This principle applies to following established precedents.

A High Court appeal will be dismissed if the Tribunal has already made a finding of fact, meaning no substantial question of law arises for consideration.

An Assessing Officer who initiates reassessment proceedings under section 148 based on specific reasons cannot reassess income on issues unrelated to those reasons.

If an assessment order passed under section 143(3) does not reflect any consideration of a specific issue raised during the regular assessment proceedings, it implies that no opinion was formed by the Assessing Officer on that issue.

An assessee's participation in assessment proceedings does not confer jurisdiction on an Assessing Officer who inherently lacks it, even if the assessee failed to object to jurisdiction within the time prescribed under Section 124(3). Waiver applies to rights and privileges, not to the conferral of jurisdiction.

Tax cannot be levied if it is not permitted under the Act, even if the doctrine of estoppel might otherwise apply. No tax can be levied or collected except by authority of law.

Section 153A proceedings encompass the scope of abated proceedings, allowing for fresh legal claims that could have been raised in regular assessment proceedings.

An explanation inserted into Section 14A of the Income Tax Act, 1961, is clarificatory and retrospective in nature, meaning it applies from the date the original provision was enacted.

Failure to follow the prescribed procedure can invalidate an assessment. The definition of 'Assessing Officer' and the applicability of Section 143(2) to Chapter XIV-B proceedings are key considerations in assessment validity.

The case is cited for the proposition that certain tax matters have been decided similarly in various High Court decisions, including Commissioner of Income Tax v. Leader Valves Ltd., indicating a consistent legal view on the subject.

The same income cannot be assessed substantively in multiple hands. However, this principle does not prevent a single consolidated assessment order for multiple legal representatives.

The Income Tax Act provisions prevail over accounting principles for computing taxable income, and each assessment year is a self-contained unit. Income cannot be shifted between assessment years.

The term 'assessment' in income tax law can refer to the computation of income, the determination of tax payable, or the entire procedure for imposing liability on a taxpayer.

The doctrine of res judicata does not apply to income tax assessments, meaning a decision on a question of fact or law in one assessment year is not binding in another assessment year. Findings of fact in an earlier year can be cogent evidence, but are not conclusive for subsequent years.

The Income Tax Department cannot initiate fresh reassessment proceedings based on new views on facts or new inferences simply because the law was not known or properly applied during the original assessment. Allowing such actions would lead to endless litigation.

The limitation period for reassessment proceedings under Section 147 of the Income Tax Act, 1961, should be reckoned from the date of intimation under Section 143(1), not from the order passed under Section 143(3) read with Section 147. This principle affects the validity of revisionary orders under Section 263 and consequent assessment orders.

A disclosure of additional income during a survey, which is subsequently offered to tax, is the subject of controversy. The case is cited in conjunction with other judgments concerning the disclosure of additional income during survey proceedings.

A procedural defect in serving notices, such as issuing them after the assessee's death without proper service on legal representatives, can invalidate reassessment proceedings and render assessment orders void. However, an omission or defect in serving notices does not erase a tax liability created by substantive provisions, though it may render an order irregular.