“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

Quadeye Securities Pvt. Ltd., Kolkata vs. DCIT, Cir. 11(1), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 792/KOL/2024[2011-12]Status: DisposedITAT Kolkata07 Oct 2024AY 2011-12

Bench: Shri Sanjay Garg & Shri Rakesh Mishrai.T.A. No.792/Kol/2024 Assessment Year: 2011-12 Quadeye Securities Pvt. Ltd..………...........………………....Appellant 184, Harish Mukherjee Road, 1St Floor, Kolkata-700026. [Pan: Aabce7790H] Vs. Dcit, Circle-11(1), Kolkata….………….…............................…..…..... Respondent Appearances By: Shri A. K. Tibrewal, Fca, Appeared On Behalf Of The Assessee. Shri Vineet Kumar, Addl. Cit- Sr. Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : July 08, 2024 Date Of Pronouncing The Order : October 07, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 29.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Is Aggrieved By The Action Of The Ld. Cit(A) In Confirming The Addition Made By The Assessing Officer On Account Of Disallowance Of Loss Of Rs.2,47,48,393/- Incurred By The Assessee In Commodities Dealing In National Multi Commodity Exchange Of India Limited (‘Nmce’) Platform & Further Making Addition Of Rs.4,92,263/- U/S 69C Of The Act On Account Of Alleged Commission That Might Have Been Paid By The Assessee In Booking The Aforesaid Bogus Loss In Commodity Trading.

Section 147Section 250Section 69C

aforesaid reason mentioned by the Assessing Officer was a vague reason and would not fall within the scope of “reasons to believe of escapement of income” of the assessee. The ld. counsel has further invited our attention to reasons recorded to submit that in the said 7 pages document ... Wing was supposed to corelate the same with the records and other facts of the case and thereafter should have satisfied himself of escapement of income. Reopening is not permissible on the basis of borrowed satisfaction of the Assessing Officer. The powers of Assessing Officer to reopen an assessment, though

Sharda Kanoria, Kolkata vs. ACIT, Cir-30, Kolkata.

In the result, appeal of the assessee isallowed

ITA 797/KOL/2023[2009-10]Status: DisposedITAT Kolkata07 Oct 2024AY 2009-10

Bench: Shri Manish Borad, Accountant Member Shri Sonjoy Sarma (Judicial Member)

Section 139(1)Section 142(3)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 250Section 68

Stock Exchanges, details of which all existed on the Stock Exchange and was thus available with the A.O and thus there was no escapement of income warranting any proceeding to reopen the assessment. 3. That, on the facts and in the circumstances of the case

Gemco International, Jaipur vs. Income Tax Officer Ward 2(1), Jaipur

In the result, the appeal filed by the assessee stands partly allowed with no order as to cost

ITA 410/JPR/2024[2012-13]Status: DisposedITAT Jaipur04 Oct 2024AY 2012-13

Bench: SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Vivek Bhargava, CAFor Respondent: Shri Gautam Singh Choudhary,JCIT-DR

Section 143(3)Section 147Section 148Section 153ASection 153C

from assessment, both sections are dealing with different situations. Section 147 comes into operation when, the assessing officer believes that there is an escapement of income chargeable to tax, either from the return already filed or through some external material evidence came to his knowledge, which shows the escapement ... from assessment, both sections are dealing with different situations. Section 147 comes into operation when, the assessing officer believes that there is an escapement of income chargeable to tax, either from the return already filed or through some external material evidence came to his knowledge, which shows the escapement

Bhartiya Samruddhi Investments and Consulting Services Limited, Delhi vs. ACIT, Circle 4(2), Delhi

In the result, the Assessee’s appeal is allowed

ITA 1637/DEL/2023[2012-13]Status: DisposedITAT Delhi04 Oct 2024AY 2012-13

Bench: Shri Shamim Yahya & Ms. Madhumita Roya.Yr. : 2012-13 Bhartiya Samruddhi Vs. Acit, Circle 4(2), Investments & Consulting New Delhi Services Limited, F-5, Ground Floor, Greater Kailash, Kailash Colony, Part-I, New Delhi – 110 048 (Pan: Aaacb5336R) (Appellant) (Respondent)

For Appellant: Shri Arvind Kumar, AdvFor Respondent: Shri Raghunath, Sr. DR

Section 142(1)Section 143(3)Section 147Section 148Section 151Section 37

following grounds:- 1. There is no tangible material, which is a pre-condition, available with the AO to allege the escapement of income, the reopening tantamount to only review of original assessment based on change of opinion which is not permissible u/s. 147/148. 2. Neither there is any fresh fact ... reasons recorded or the rejection letter. There is no tangible material, which is a pre-condition, available with the AO to allege the escapement of income, the reopening tantamount to only review the original assessment based on change of opinion which is not permissible u/s. 147/148. There is no specific

Amrutbhai Ichhabhai Patel, Ahmedabad vs. The Dy.CIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 804/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad03 Oct 2024AY 2013-14

Bench: Ms. Suchitra Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 804/Ahd/2023 (िनधा"रण वष" / Assessment Year : 2013-14) बनाम/ Shri Amrut Ichhabhai The Dy.Cit Patel Circle - 3(1)(1), Vs. C/O Ketan H. Shah, Ahmedabad Advocate 512, Times Square-1, Opp. Ram Baug Bungalow, Thaltej Shilaj Road, Thaltej, Ahmedabad, Gujarat, 380059 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Acnpp1706F (Appellant) .. (Respondent) अपीलाथ" ओर से /Appellant By : Shri Ketan Shah & Shri Aman Shah, A.Rs. ""यथ" क" ओर से/Respondent By : Shri Sudhendu Das, Cit. Dr Date Of Hearing 19/09/2024 Date Of Pronouncement 03/10/2024

For Appellant: Shri Ketan Shah & Shri Aman ShahFor Respondent: Shri Sudhendu Das, CIT. DR

Section 143(3)Section 147Section 148Section 151Section 68

transpired that the reason was recorded afterwards on 09.06.2020. He further submitted that the AO had not recorded any independent reason for escapement of income on the part of the assesse and that the reason was based on only change of opinion. He has drawn our attention to the reason ... Investigation Directorate. Further that the AO had applied his mind on the information as received and thereafter recorded his independent reason for escapement of income. He placed strong reliance on the order of the AO as well as the Ld. CIT(A). 7. We have carefully considered the rival submissions

M/S Inland World Logistics Pvt. Ltd., Kolkata vs. PCIT(Cen.)- Kolkata-2, Kolkata

In the result, the appeal of the assessee is allowed

ITA 935/KOL/2024[2018-19]Status: DisposedITAT Kolkata03 Oct 2024AY 2018-19

Bench: Shri Rajpal Yadav, Vice-(Kz) & Shri Rakesh Mishrai.T.A. No. 935/Kol/2024 Assessment Year: 2018-2019 M/S. Inland World Logistics Pvt. Limited,…Appellant P-221/2, Strand Bank Road, Burrabazar, Kolkata-700001 [Pan:Aaaci5607C] -Vs.- Principal Commissioner Of Income Tax (Central), Kolkata-2,…………………………………………..…Respondent Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Rakesh Jain, Fca, Appeared On Behalf Of The Assessee Shri Subhendu Datta, Cit (D.R.) & Smt. Monali Shaha Mukherjee, Jcit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: July 25, 2024 Date Of Pronouncing The Order: October 03, 2024 O R D E R

Section 132Section 139Section 139(1)Section 143(1)Section 143(2)Section 153ASection 263

held by the Court that additions under section 153A could be made if during the course of search, any incriminating material exhibiting the escapement of income was seized. In other words, nothing was seized. The item of disallowance out of PF & ESI payments was a regular issue, which could have

Subhash Runwal, Bibwewadi, Pune vs. Income Tax Officer Ward 5(4) Pune, Pune

The appeal of the assessee is ALLOWED

ITA 1279/PUN/2024[2012-2013]Status: DisposedITAT Pune01 Oct 2024AY 2012-2013

Bench: Hon’Ble Shri G. D. Padmahshali & Hon’Ble Shri Vinay Bhamoreassessment Year : 2012-13 Subhash Runwal 204, Solitari-5, Nr. Kalyan Bhel, Bibwewadi Rd., Pune-411037. Pan: Adbpr7670R. . . . . . . . Appellant

For Appellant: Mr CD Upasani [‘Ld. AR’]For Respondent: Mr BS Rajpurohit [‘Ld. DR’]

Section 133(6)Section 143(3)Section 144Section 148Section 250Section 69Section 69A

make no addition on account of cash deposits made by the assessee which was predominant element in forming the reasons to believe escapement of income, therefore any other addition in view of amended provision of section 147 of the Act r.w.s. explanations thereto is impermissible in law. To drive home ... assessee from M/s Vinod Construction represented by Mr Vinod Jain. In this case since addition towards one of the items (i.e., escaped interest income) which along-with other item also founded the reasons to believe, is made therefore the Ld. AO was well within his jurisdiction to assess any other

Vimla Devi Meena, Dausa vs. ITO Ward- Dausa, Dausa

ITA 1034/JPR/2024[2011-12]Status: HeardITAT Jaipur01 Oct 2024AY 2011-12

Bench: SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Sarwan Kumar Gupta, Advocate &For Respondent: Shri Gautam Singh Chaudhary, JCIT D/R

Section 144Section 147Section 148Section 2Section 234ASection 250

same position. 3. No income escaped: further it is submitted that the notice u/s 148 can be issued only when there is any escape of income because S. 147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment ... assessment year, here the assessee has not escaped any income because the assessee has never having the undisclosed or unexplained income. Which shows that there was no escapement of income by the assessee, as the assessee has not purchased the property during the year the same was purchased

Prabhati Devi, Dausa vs. ITO Ward Dausa, Dausa

ITA 1031/JPR/2024[2011-12]Status: HeardITAT Jaipur01 Oct 2024AY 2011-12

For Appellant: Shri Sarwan Kumar Gupta, Advocate &For Respondent: Shri Gautam Singh Chaudhary, JCIT D/R

Section 144Section 147Section 148Section 234ASection 250

Kandoi Metal Powders Manufactruing Company, Jaipur vs. DCIT, CC-3, Jaipur

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

ITA 122/JPR/2022[2012-13]Status: DisposedITAT Jaipur01 Oct 2024AY 2012-13

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. S. L. Poddar (Adv.)For Respondent: Sh. A. S. Nehra (Addl. CIT) a

Section 139Section 143(3)Section 147Section 148

/153C of the Income Tax Act, 1961 on 26.03.2015. On the basis of information received and after analyzing the fact related to escapement of income, the case of the assessee was re-reopened under section 147 of the Act. The necessary approval of the Principal Commissioner of Income Tax, (Central

M/S. Sultanpur Zilla Sahkari Bank Ltd., Sultanpur vs. Pr. Commissioner of Income Tax, Faizabad

In the result, the appeal of the assessee is dismissed

ITA 647/LKW/2019[2015-16]Status: DisposedITAT Lucknow30 Sept 2024AY 2015-16

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y.-2015-16 M/S Sultanpur Zilla Sahkari Bank Pr. Cit, Faizabad Ltd., Near Collectorate, Allahabad Vs. Road, Civil Lines, Sultanpur, U.P. Pan:Aanas6008C (Appellant) (Respondent) Assessee By: Sh. J.L. Yadav, Adv Revenue By: Sh. Mazhar Akram, Cit Dr Date Of Hearing: 21.08.2024 Date Of Pronouncement: 30.09.2024 O R D E R

For Appellant: Sh. J.L. Yadav, AdvFor Respondent: Sh. Mazhar Akram, CIT DR

Section 143(3)Section 2(24)(x)Section 263

course of assessment proceedings in, “limited scrutiny” cases, if it comes to the notice of the ld. Assessing Office that there is potential escapement of income exceeding Rs.5 Lacs (for Metro Charges) the monitory limits shall be Rs. 10 Lacs requiring substantial verification on any other issue(s), then ... same that the ld. Assessing Officer was obliged to consider the possibility of making a proposal for complete scrutiny if there was potential escapement of income above a prescribed monitory limit. The only safeguards that were placed in instruction no. 5/2016 were that while forming such a reasonable view that

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 805/CHNY/2024[2020-21]Status: DisposedITAT Chennai30 Sept 2024AY 2020-21

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita Nos.799 To 805/Chny/2024 िनधा"रण वष"/Assessment Years: 2013-14, 2014-15, 2016-17 To 2020-21 V. M/S. Metal Impex, The Acit, The Lattice, 4Th Floor, Central Circle-1(1), No.20 Waddles Road, Chennai. Kilpauk, Chennai-600 010. [Pan: Aamfm 4856 G] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

discovered during the course of search, which otherwise would not have seen the light of the day but for the search, resulting in escapement of income. 8.14 As per our discussion, is to be kept in mind that, the term ‘deposits in bank account' has to be considered with

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 804/CHNY/2024[2019-20]Status: DisposedITAT Chennai30 Sept 2024AY 2019-20

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 803/CHNY/2024[2018-19]Status: DisposedITAT Chennai30 Sept 2024AY 2018-19

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 802/CHNY/2024[2017-18]Status: DisposedITAT Chennai30 Sept 2024AY 2017-18

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 801/CHNY/2024[2016-17]Status: DisposedITAT Chennai30 Sept 2024AY 2016-17

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 800/CHNY/2024[2014-15]Status: DisposedITAT Chennai30 Sept 2024AY 2014-15

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

M/S Metal Impex, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, all the appeals in ITA Nos

ITA 799/CHNY/2024[2013-14]Status: DisposedITAT Chennai30 Sept 2024AY 2013-14

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri V. Nandakumar, CIT

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 153C(2)Section 68

Dy. Commissioner of Income Tax Circle - 3(3)(1), Mumbai vs. Small Industries Development Bank of India, Mumbai

In the result, the appeal is dismissed

ITA 2892/MUM/2023[2016-17]Status: DisposedITAT Mumbai30 Sept 2024AY 2016-17

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahayassessment Year: 2016-17 Dy. Commissioner Of M/S. Small Industries Income Tax Circle- Development Bank Of 3(3)(1) India Room No. 609, Sme Development Centre, Aaykar Bhavan, C-11, G- Block, Vs. M. K. Road, Bandra Kurla Complex, Churchgate, Bandra (East), Mumbai- 400020. Pan: Aabcs3480N (Appellant) (Respondent)

For Appellant: Shri Rakesh Joshi, A.RFor Respondent: Dr. Kishor Dhule- CIT D.R

Section 143(3)Section 147Section 148Section 250Section 36Section 36(1)Section 36(1)(viia)Section 36(1)(viii)

only to see whether there are reasonable grounds for the Income-tax Officer to believe and not whether the omission/ failure and the escapement of income is established. 4. It was held by the Hon'ble Delhi High court in AGR Investment Ltd. v. Addl. CIT 333 ITR 146 that ... ascertained the fact by legal evidence or conclusion. At that stage what is required is 'reason to believe' and not the establishment of escapement of income. Whether the materials would conclusively prove an escapement of income is not the concern at that stage. Thus, in view of the above decisions

Income Tax Office, Ward-6(2), Jaipur vs. Medical Designs India Pvt. Ltd., Jaipur

In the result the appeal of the Revenue stands dismissed

ITA 236/JPR/2024[2011-12]Status: DisposedITAT Jaipur27 Sept 2024AY 2011-12

For Appellant: Shri Ratan Lal Goyal (C.A.) &For Respondent: Shri Arvind Kumar (CIT)

Section 127Section 142(1)Section 144Section 147Section 148

wand failed to disclose capital gain accordingly.” From perusal of above, it is evident that while recording the reason for reopening, satisfaction of escapement of income has been formed that assessee has purchased immovable property, source of which remained unverified as no Return of Income was filed. The reassessment order ... aside. In this regards reliance is placed on the following judicial pronouncements: Ram Singh 306 ITR 343 (Rajasthan) Reassessment — Income escaping assessment — Income believed to have escaped investment explained by assessee — Tribunal rightly holding reassessment proceedings initiated on non-existing facts and invalid — |.T.Act