Landmark Cases on Assessment Procedure

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.

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.

Judicial discipline requires consistency in applying a legal view taken in a prior year, especially when no contrary material is presented. Finality to litigation is a principle that must be followed.

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.

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.

A notice issued by an Assessing Officer without proper jurisdiction renders all subsequent proceedings void. The authority for issuing such a notice must be the Assessing Officer alone.

A tax cannot be levied if it is not permitted under the Act, even if the doctrine of estoppel might otherwise apply. There can be no estoppel against a statute, and a party is entitled to relief if tax is levied or collected without legal authority.

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.

This case is cited for the procedural aspects of tax assessments, particularly concerning the interpretation and application of reassessment provisions and related sections.

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.

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.

An assessee cannot be treated as an Association of Persons (AOP) if the beneficiaries have not come together with a common purpose of earning income.

Amendments made to Section 14A by the Finance Act, 2022, inserting a non-obstante clause and an explanation, are prospective from April 1, 2022, and cannot be applied retrospectively. Further, where no exempt income is earned, Section 14A read with Rule 8D cannot be applied.

An assessment order is vitiated if the approval granted by the approving authority was mechanical and demonstrated a non-application of mind.

Assessment proceedings are vitiated if approval under section 153D is not obtained for the income and tax computation. The approval requirement under section 153D mandates that the Joint Commissioner of Income Tax must approve not only the assessment order but also the computation of income and tax.

Circulars or instructions issued by the CBDT cannot override the express provisions of the Income Tax Act or modify the clear meaning of statutory language.

A later Supreme Court decision retrospectively clarifies the law, superseding earlier incorrect interpretations, as judges discover and find the correct law rather than make it.

The Commissioner of Income Tax (Appeals) must provide a speaking order, stating the points for determination, the decision, and the reasons for the decision, even when dismissing an appeal for non-prosecution.

Reassessment proceedings are invalid if the assessment order is passed within four weeks of the disposal of objections, as this does not provide the assessee with adequate time. The assessment order is bad in law and void in such circumstances.

Jurisdiction under Section 153C of the Income Tax Act is invalid if no documents belonging to the assessee are found. The satisfaction note must be based on objective facts, and the non-obstante provisions of Sections 153A and 153C do not override the mandatory provisions of Sections 142(2) or 143(2).

Sanction for prosecution under Section 197 of the Code of Criminal Procedure is required for public servants who were or are in service, distinguishing it from Section 19 of the Prevention of Corruption Act, which does not require sanction for those who have ceased to be public servants.

The Assessing Officer must record dissatisfaction with the correctness of an assessee's expenditure claim with cogent reasons. A failure to articulate dissatisfaction and the basis for it renders the assessment invalid.

Circulars issued by the Board under Section 37-B of the Central Excise Act, 1944, are binding on the tax authorities, and the revenue cannot repudiate such circulars even if they are perceived to be inconsistent with statutory provisions.

The Commissioner of Income Tax (Appeals) can make enhancements to an assessment during appellate proceedings, provided such enhancements do not amount to introducing an entirely new head of income.