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“escapement of income”

ReassessmentSection 147Section 1473,765 judgments

The decision most relied on for escapement of income is CIT v. Kelvinator of India Ltd. (320 ITR 561), cited in 1,673 judgments on BharatTax.

Leading authorities on escapement of income

CIT v. Kelvinator of India Ltd.
320 ITR 561 · 2010 · Supreme Court
1,673
citing judgments

An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.

ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd.
291 ITR 500 · 2007 · Supreme Court
1,030
citing judgments

For initiating reassessment proceedings under Section 147, the Assessing Officer needs only prima facie material providing a reason to believe that income has escaped assessment. Conclusive proof or the sufficiency/correctness of the material is not required at the stage of issuing the notice under Section 148.

Raymond Woollen Mills Ltd. v. ITO
236 ITR 34 · 1999 · Supreme Court
862
citing judgments

For reassessment proceedings under Section 148, the Assessing Officer only needs prima facie material to have a reason to believe income has escaped assessment. Conclusive proof or evaluation of the sufficiency and correctness of such material is not required at the stage of issuing the notice.

CIT v. Sun Engineering Works (P) Ltd.
198 ITR 297 · 1992 · Supreme Court
814
citing judgments

A court's pronouncement derives its scope and color from the specific questions involved in the case, thus, due regard must always be given to the questions framed before the court when interpreting its judgment.

ITO v. Lakhmani Mewal Das
103 ITR 437 · 1976 · Supreme Court
721
citing judgments

For reassessment proceedings, the 'reason to believe' that income has escaped assessment must be based on some material and not mere suspicion, establishing a live link between the information and the belief. Furthermore, for reassessment beyond four years, there must be a specific finding of the assessee's failure to disclose fully and truly all material facts.

Hindustan Lever Ltd. v. R.B. Wadkar
268 ITR 332 · 2004 · High Court
695
citing judgments

The validity of reassessment proceedings initiated under Section 147, by issuing a notice under Section 148, must be judged solely on the reasons originally recorded by the Assessing Officer. These recorded reasons cannot be supplemented, improved upon, or modified at any later stage.

CIT v. Jet Airways (I) Ltd.
331 ITR 236 · 2011 · High Court
694
citing judgments

The Assessing Officer loses jurisdiction and the entire reassessment becomes invalid if no addition is made in respect of the income that formed the basis of the reopening. Explanation 3 to Section 147 does not permit assessing other escaped income unless an addition is made for the original income forming the reason to believe.

PCIT v. Meenakshi Overseas Pvt. Ltd.
395 ITR 677 · 2017 · High Court
471
citing judgments

Reassessment proceedings initiated solely based on an investigation wing/appraisal report, without the Assessing Officer's independent application of mind to form a 'reason to believe' that income has escaped assessment, are beyond jurisdiction, bad in law, and void ab initio.

Judgments citing escapement of income

Vicky Rajesh Jhaveri, Ahmedabad vs. The Dy. CIT, Cent. Circle-1(1), Ahmedabad

In the result, all the four appeals of respective assessees are partly allowed

ITA 11/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad22 Oct 2024AY 2011-12

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Makarand V. Mahadeokar (Accountant Member)

For Appellant: Shri Deepak R. Shah, A.RFor Respondent: Shri Prateek Sharma, Sr. D.R
Section 145Section 147Section 148

invoked in respect of investigation report as well as the independent finding/reasons given by the Assessing Officer in respect of escapement of income as per Assessing Officer’s belief. The contention of the ld. A.R. is that he was not given cross-examination of the persons whose statement was recorded ... third party and not on the basis of case specific material/evidence found in case of the appellant seated and since there is no escapement of income at all defined in section 147 of the Act which is a condition precedent for issuing notice u/s.148

Sagar Rajesh Jhaveri, Ahmedabad vs. The Dy.CIT, Cent. Circle-1(1), Ahmedabad

In the result, all the four appeals of respective assessees are partly allowed

ITA 10/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad22 Oct 2024AY 2011-12

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Makarand V. Mahadeokar (Accountant Member)

For Appellant: Shri Deepak R. Shah, A.RFor Respondent: Shri Prateek Sharma, Sr. D.R
Section 145Section 147Section 148

invoked in respect of investigation report as well as the independent finding/reasons given by the Assessing Officer in respect of escapement of income as per Assessing Officer’s belief. The contention of the ld. A.R. is that he was not given cross-examination of the persons whose statement was recorded ... third party and not on the basis of case specific material/evidence found in case of the appellant seated and since there is no escapement of income at all defined in section 147 of the Act which is a condition precedent for issuing notice u/s.148

Slv Royal Estate, Nellore vs. ITO., Ward-1, Nellore

In the result, the appeal of the assessee is allowed

ITA 403/HYD/2024[2018-19]Status: DisposedITAT Hyderabad21 Oct 2024AY 2018-19

Bench: Shri K. Narasimha Chary & Shri Madhusudan Sawdia

For Appellant: Shri GVN Hari, AdvocateFor Respondent: : Shri P. Dhivahar, CIT-DR
Section 143(2)Section 143(3)Section 263Section 45(3)

lieu of the introduction of land and development expenses are concerned. The Ld. AR submitted that there cannot be any ITA No.403/Hyd/2024 6 escapement of income in the hands of the partnership firm as far as this issue is concerned. Therefore the Ld. AR submitted that ... concerned, if any capital gain has not been offered by the partner in their respective return of income, then there will be escapement of income in the hands of the partner and not in the hand of the assessee. Therefore, if partners have not shown the capital gain in their

Kalindee Estates Private Limited, Jaipur vs. Income Tax Officer, Jaipur

ITA 770/JPR/2024[2010-2011]Status: DisposedITAT Jaipur21 Oct 2024AY 2010-2011
For Appellant: Sh. Tarun Mittal, CAFor Respondent: Sh. Anup Singh, Addl. CIT
Section 143(3)Section 147Section 68

same. It simply shows that Ld.AO himself was not sure while forming his belief for re-opening, as to whether there was actually escapement of Income or not. On perusal of aforesaid para, it is relevant that Id. AO formed belief regarding escapement of income solely on the basis ... failed to disclose fully and truly all material facts necessary for assessment and because of its failure there had been an escapement of income chargeable to tax, reopening of assessment after expiry of four years from end of relevant assessment year was without jurisdiction. It is further relevant to state

Dharambir, Gurgaon vs. Pr, CIT, Faridabad

In the result, appeal of the assessee is allowed

ITA 787/DEL/2022[2012-13]Status: DisposedITAT Delhi21 Oct 2024AY 2012-13

Bench: Shri Pradip Kumar Kedia & Shri Yogesh Kumar Usdharambir Vs. Pr. Cit Village-Nakhrola, Naharpur, C.R. Building, Faridabad, Gurgaon, Haryana. Haryana. Pan No.Aumpd4924E (Appellant) (Respondent)

differently, in the light of material placed in the reassessment proceedings by the assessee, the belief initially formed towards alleged escapement of income by the AO for exercise of powers under s. 147 of the Act were not applied adverse to the assessee and no additions were consequently made

ACIT, Central Crcle-18, New Delhi vs. Shimmer Developers P.Ltd, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 1497/DEL/2018[2011-12]Status: DisposedITAT Delhi21 Oct 2024AY 2011-12

Bench: Pradip Kumar Kedia & Shri Anubhav Sharma

Section 132Section 143(3)Section 147Section 150Section 68

relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite ... reasons remotely indicate independent application of mind. True it is, at that stage, it is not necessary to have the established fact of escapement of income, but what is necessary is that there is relevant material on which a reasonable person could have formed the requisite belief. To elaborate

Fakroddin Dawal Patel, Latur vs. Income Tax Officer, Latur

In the result both appeals allowed for statistical purpose

ITA 1476/PUN/2024[2016-17]Status: DisposedITAT Pune18 Oct 2024AY 2016-17

Bench: Shri Satbeer Singh Godara & Dr. Dipak P. Ripoteआयकरअपीलसं. / Ita No.1475/Pun/2024&1476/Pun/2024 धििाारणवषा / Assessment Year: 2015-16& 2016-17 Fakroddin Dawal Patel, 9, D, Income Tax Officer, Latur Market Yard, Latur, Maharashtra-413512 Vs Pan No. Aqapp3436F Appellant/Assessee Respondent/Revenue

Section 69A

reopening , even in the reasons the AO has merely referred to the Information received and arrived at the conclusion of escapement of Income. 4.4) It is observed that ITAT in ITA 1477/PUN/2024 in assessee’s own case for AY 2017-18 in similar circumstances have set aside the Order

Fakroddin Dawal Patel, Latur vs. Income Tax Officer, Latur

In the result both appeals allowed for statistical purpose

ITA 1475/PUN/2024[2015-16]Status: DisposedITAT Pune18 Oct 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Dr. Dipak P. Ripoteआयकरअपीलसं. / Ita No.1475/Pun/2024&1476/Pun/2024 धििाारणवषा / Assessment Year: 2015-16& 2016-17 Fakroddin Dawal Patel, 9, D, Income Tax Officer, Latur Market Yard, Latur, Maharashtra-413512 Vs Pan No. Aqapp3436F Appellant/Assessee Respondent/Revenue

Section 69A

reopening , even in the reasons the AO has merely referred to the Information received and arrived at the conclusion of escapement of Income. 4.4) It is observed that ITAT in ITA 1477/PUN/2024 in assessee’s own case for AY 2017-18 in similar circumstances have set aside the Order

Ags Developers Pvt Ltd, Jasola Delhi vs. Income Tax Officer Ward 1 (4), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 2185/DEL/2024[2008-2009]Status: DisposedITAT Delhi18 Oct 2024AY 2008-2009

Bench: Shri Kul Bharat[Assessment Year : 2008-09] Ags Developers Pvt.Ltd., Vs Ito, H.No.47, Pocket Ii, Ward -1(4), Near Appollo Hospital, Jasola, New Delhi. New Delhi-110076. Pan-Aafca1795G Appellant Respondent Appellant By Shri Sandeep Goel, Adv. Respondent By Shri Siddharth B.S. Meena, Sr.Dr Date Of Hearing 04.09.2024 Date Of Pronouncement 18.10.2024

Section 143(1)Section 147Section 148Section 250Section 68

invalid notice issued u/s 148 of 1961 Act dated 25.03.2015 as admittedly only stated/purported search based information is made as basis to infer escapement of income, same could only be done if at all under special and specific provision of sec 153C of 1961 Act; therefore first appeal order dated ... fairly submitted that re-opening of assessment is based on the search. He submitted that therefore, the AO was having information about escapement of income. There is no embargo under the law that the AO cannot proceed u/s 147 of the Act, dehors the information or material is based

ITO, Ward- 4, Rohtak vs. Stratagem Stock Broker Pvt. Ltd., Rohtak

In the result, the appeal filed by the Revenue is dismissed

ITA 7482/DEL/2017[2009-10]Status: DisposedITAT Delhi18 Oct 2024AY 2009-10

Bench: Shri S. Rifaur Rahman & Shri Sudhir Pareek, Judicialmember Ito, Ward 4, Vs. M/S. Stratagem Stock Broker Pvt. Ltd., Rohtak. H.No.122/8, Shivaji Colony, Rohtak (Haryana). (Pan: Aakcs2610R) (Appellant) (Respondent) Assessee By : Shri Gautam Jain, Advocate Shri Lalit Mohan, Ca Shri Parth Singhal, Advocate Revenue By : Shri Vivek K. Upadhyay, Sr. Dr. Date Of Hearing : 29.08.2024 Date Of Order : 18.10.2024 O R D E R Per S. Rifaur Rahman, Am : 1. This Appeal Is Filed By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), Rohtak [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 10.10.2017 For The Assessment Year 2009-10. 2. Brief Facts Of The Case Are, Assessee Filed Its Original Return Of Income On 18.08.2009 Declaring An Income Of Rs.1,17,770/-. The Return Was Processed

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Vivek K. Upadhyay, Sr. DR
Section 143Section 143(2)Section 143(3)Section 148

consideration to the contention of the appellant and find that the gamut of full and true disclosure of facts and circumstances leading to escapement of income is very large. In the present case, on earlier occasion the fact that 4 in number of transactions there is Client Code Modification ... assessing officer must mention details of failure on the part of the assessee to disclose full and true facts which has led to escapement of income. In consideration of the discussion above, the ground of appeal is allowed. ………….. 4.2 I have given careful consideration to the contention of the appellant

Assisstant Commissioner of Income Tax - 4(1), Indore vs. Prataap Snacks Limited, Indore

In the result revenue’s appeal is dismissed and assessee’s cross-objection is allowed

ITA 374/IND/2023[2018-19]Status: DisposedITAT Indore17 Oct 2024AY 2018-19

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 143(3)Section 147Section 148Section 80I

disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable ... after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section

Assisstant Commissioner of Income Tax - 4(1), Indore vs. Prataap Snacks Limited, Indore

In the result revenue’s appeal is dismissed and assessee’s cross-objection is allowed

ITA 373/IND/2023[2020-21]Status: DisposedITAT Indore17 Oct 2024AY 2020-21

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 143(3)Section 147Section 148Section 80I

disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable ... after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section

Assisstant Commissioner of Income Tax - 4(1), Indore vs. Prataap Snacks Limited, Indore

In the result revenue’s appeal is dismissed and assessee’s cross-objection is allowed

ITA 372/IND/2023[2017-18]Status: DisposedITAT Indore17 Oct 2024AY 2017-18

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 143(3)Section 147Section 148Section 80I

disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable ... after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section

Assistant Commissioner of Income Tax - 4(1), Indore vs. Prataap Snacks Limited, Indore

In the result revenue’s appeal is dismissed and assessee’s cross-objection is allowed

ITA 371/IND/2023[2013-14]Status: DisposedITAT Indore17 Oct 2024AY 2013-14

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 143(3)Section 147Section 148Section 80I

disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable ... after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section

Assistant Commissioner of Income Tax - 4(1), Indore vs. Prataap Snacks Limited, Indore

In the result revenue’s appeal is dismissed and assessee’s cross-objection is allowed

ITA 370/IND/2023[2012-13]Status: DisposedITAT Indore17 Oct 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 143(3)Section 147Section 148Section 80I

disallowing the claim of deduction u/s 80IB(11A) for the earlier assessment years i.e. 2012-13 and 2013-14 amounts to escapement of income assessable to tax. Therefore, there is direct nexus between the assessment orders passed in the subsequent years and the reason to believe that the income assessable ... after 1-4-1989 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section

DCIT-42(1)(1), Mumbai vs. Sunil Harishchandra Keni, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 4374/MUM/2024[2017-18]Status: DisposedITAT Mumbai17 Oct 2024AY 2017-18

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhailassessment Year: 2017-18

For Appellant: Shri Dharan GandhiFor Respondent: Shri Bhangepatil Pushkaraj Ramesh, Sr. DR
Section 143(3)Section 147Section 148Section 148ASection 151Section 250Section 3Section 56(2)(vii)

taxable u/s 56(2)(vii)(b) of the Income-tax Act, 1961. As per the ‘reason to believe’, there was escapement of income to the extent of difference amount of Rs.92,12,500/- as mentioned above. Consequently, the case of the assessee was reopened by issuing notice

Goodview Marketing Pvt. Ltd., Kolkata vs. ITO, Ward - 6(2), Kolkata

ITA 986/KOL/2024[2008-2009]Status: DisposedITAT Kolkata16 Oct 2024AY 2008-2009

Bench: Shri Rajpal Yadav & Dr. Manish Boradi.T.A. No.986/Kol/2024 Assessment Year: 2008-09 Goodview Marketing Pvt. Ltd. ………. Appellant 255, Canal Street, Shree Bhumi, Brijdham Housing Complex, Kolkata-700048. (Pan: Aadcg0582H) Vs. Income Tax Officer ………… Respondent Ward-6(2), Kolkata. Appearances By: Shri S. K. Tulsiyan, Advocate & Ms. Puja Somani, Ar Appeared For Appellant Shri Subhendu Datta, Cit, Dr Appeared For Respondent Date Of Concluding The Hearing : 23.09.2024 Date Of Pronouncing The Order : 16.10.2024 Order Per Dr. Manish Borad: The Appeal Filed At The Instance Of The Assessee Pertaining To The Assessment Year (In Short “Ay”) 2008-09 Is Directed Against The Order Passed U/S 250 Of The Income Tax Act, 1961 In Short The “Act”) By Ld. Commissioner Of Income-Tax, (Appeals), National Faceless Appeal Centre (Nfac), Delhi [In Short Ld. “Cit(A)”] Dated 15.03.2024 Arising Out Of The Assessment Order Framed U/S. 144/263 Of The Act By Ito, Ward-6(2), Kolkata Dated 19.03.2014. 2. Grounds Of Appeal Raised By The Assessee Are Reproduced As Under:

Section 133(6)Section 143(1)Section 144Section 147Section 148Section 250Section 263Section 68

upholding the same. 5. That on the facts and in law, the reopening u/s 147 of the Act having being done for escapement of income in relation to consultancy fees, the scope of assessment could not have been expanded u/s 263 of the Act unless provided in law. 6. That ... issued and reassessment proceedings were carried out. During the course of the reassessment proceedings apart from examining the issue of escapement of income of Rs.80,280/-, Ld. AO in view of Explanation (3) to sec. 147 of the Page 2 of 31 I.T.A. No. 986/Kol/2024 Goodview Marketing

M/S Madras Race Club, Chennai vs. DCIT, Cenral Circle-1(2), Chennai

In the result the appeal of the assessee stands allowed

ITA 688/CHNY/2024[2007-08]Status: DisposedITAT Chennai16 Oct 2024AY 2007-08

Bench: Hon’Bleshri Manu Kumar Giriand Hon’Ble Shri S.R. Raghunathaआयकर अपील सं./Ita No.688/Chny/2024 िनधा"रण वष"/Assessment Year:2007-2008 M/S.Madras Race Club, The Deputy Commissioner Of Race Course Road, Vs. Income Tax, Guindy Industrial Estate S.O., Central Circle 1(2) Guindy, Chennai Chennai 600 032. Pan: Aaacm 7640R (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/Appellant By : Shri. R. Vijayaraghavan, Advocate ""यथ"क"ओरसे/Respondent By : Shri. V. Nandakumar, Irs, Cit.

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. V. Nandakumar, IRS, CIT
Section 143(1)Section 143(3)Section 147Section 148

against the increased losses of the Assessee, the net losses will be the same as returned by the Assessee. There is no escapement of income. 8. Secondly, the ld. Counsel argued that the order of Assessment merges with that of the ld.CIT(A) on this issue and AO does ... jurisdiction to reopen an issue which has merged with the order of the First Appellate Authority and in any event there is no escapement of income. 9. The second point in the reason for reopening is that the rental income of Rs.3.90 Crores does not have the character of racing

International Transmission Ltd, Mumbai vs. Deputy Commissioner of Income Tax Circle -15(1)(2), Mumbai

In the result, the appeal by the assessee is allowed

ITA 3240/MUM/2024[2012-13]Status: DisposedITAT Mumbai16 Oct 2024AY 2012-13

Bench: Shri Om Prakash Kantshri Sandeep Singh Karhailinternational Transmission Ltd. 501, 5Th Floor, Vasudeo Chambers, Mulund Goregaon Link Road, Bhandup (W), Mumbai - 400078 ……………. Appellant Pan: Aaaci0975M V/S

For Appellant: Shri V.G. Ginde, AdvFor Respondent: Shri Virabhadra S. Mahajan, Sr.DR
Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 151Section 250Section 68

accommodation entries amounting to Rs. 50 lakh through the companies in the form of bogus share capital/share premium/unsecured loans, etc. thereby resulting in escapement of income chargeable to tax. In response to the aforesaid notice, the assessee filed its return of income on 03/04/2019. 4 After receiving the reasons recorded

Sonal Snehal Shah, Mumbai vs. ITO 19(3)(1), Mumbai

ITA 1653/MUM/2024[2012-13]Status: DisposedITAT Mumbai16 Oct 2024AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

Section 10(38)Section 143Section 147Section 148Section 68

held that: 24. We may note that the Assessing Officer after reproducing the information received from DDIT, (Investigation) Unit, drew the conclusion of escapement of income. In the case of Assistant Commissioner of Income-tax v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 161 Taxman 316/291