“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

Gajanand Vithoba Bankar, Solapur vs. ITO, Ward-1, Pandharpur

In the result, both the appeals filed by the assessee are allowed for statistical purposes

ITA 993/PUN/2024[2014-15]Status: DisposedITAT Pune30 Aug 2024AY 2014-15

Bench: Shri R. K. Panda & Shri S.S. Godara

For Appellant: Shri Suhas P BoraFor Respondent: Shri Keyur Patel, CIT-DR

Section 132Section 143(2)Section 147Section 148

without jurisdiction and contrary to the provisions and scheme of Income Tax Act. b. No valid satisfaction of the AO with regards to escapement of income and notice U/Sec.148 of the Act was issued merely for enquiry or verification which is not permitted as per law. c. Cash deposit ... without jurisdiction and contrary to the provisions and scheme of Income Tax Act. b. No valid satisfaction of the AO with regards to escapement of income and notice U/Sec. 148 of the Act was issued merely for enquiry or verification which is not permitted as per law. c. Cash deposit

Gajanand Vithoba Bankar, Solapur vs. ITO, Ward-1, Pandharpur

In the result, both the appeals filed by the assessee are allowed for statistical purposes

ITA 992/PUN/2024[2013-14]Status: DisposedITAT Pune30 Aug 2024AY 2013-14

Bench: Shri R. K. Panda & Shri S.S. Godara

For Appellant: Shri Suhas P BoraFor Respondent: Shri Keyur Patel, CIT-DR

Section 132Section 143(2)Section 147Section 148

DCIT, Ncc 4(1), Chennai vs. Sohan Raj Khanted Guvanth Raj, Chennai

In the result, appeal filed by the Revenue is dismissed

ITA 1652/CHNY/2023[2013]Status: DisposedITAT Chennai30 Aug 2024

Bench: Shri Aby T. Varkey & Shri S.R.Raghunathaआयकर अपील सं./Ita No.1652/Chny/2023 िनधा"रण वष"/Assessment Year: 2013-14 V. The Dcit, Shri Sohan Raj Khanted Ncc-4(1), Gunvanth Raj, Chennai. 17, Krishna Iyer Street, Sowcarpet, Chennai-600 079. [Pan: Aafpk 9519 F] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri D. Anand, AdvocateFor Respondent: Shri A. Sasikumar, CIT

Section 111ASection 136Section 142(1)Section 143(3)Section 147Section 148

disclose fully & truly all the material facts required for assessment of AY 2013-14, notwithstanding the first hurdle i.e. reason to believe escapement of income. 8. In this context, it should be borne in mind that the concept of assessment is governed by the time-barring rule; and an assessee ... there is information or evidence regarding undisclosed income or AO has information in his possession Shri Sohan Raj Khanted Gunvanth Raj :: 7 :: showing escapement of income as stipulated u/s 147 of the Act. As per Section 147 of the Act, if the AO intends to re-open the assessment, then

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2938/DEL/2023[2017-18]Status: DisposedITAT Delhi30 Aug 2024AY 2017-18

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

course of the search to the AO of the “other person” is not obliged to form any opinion with respect to escapement of income or for that matter the material likely to have an impact on the total income of the non-searched entity. At the stage of transmission

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2937/DEL/2023[2016-17]Status: DisposedITAT Delhi30 Aug 2024AY 2016-17

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2936/DEL/2023[2015-16]Status: DisposedITAT Delhi30 Aug 2024AY 2015-16

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2935/DEL/2023[2014-15]Status: DisposedITAT Delhi30 Aug 2024AY 2014-15

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

Deep Energy Resources Ltd. (Formerly Deep Industries Ltd.), Ahmedabad vs. The ACIT, Circle-1(1)(1), Ahmedabad

In the result, the matter is restored to the file of Ld

ITA 461/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad29 Aug 2024AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokar

For Appellant: Shri Sakar Sharma, A.RFor Respondent: Shri Ketan Gajjar, Sr. DR

Section 132Section 143(2)Section 143(3)Section 147Section 148Section 68Section 69C

that is required is formation of “reasons to believe” that the income has escaped assessment but not the established fact of escapement of income. Further, the Assessing Officer placed reliance on the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Deep Energy Resources Ltd. vs. ACIT Asst.Year

ACIT Ltu 2, Chennai vs. Indian Overseas Bank, Chennai

In the result, the appeal of the assessee (ITA No

ITA 946/CHNY/2018[2010-11]Status: DisposedITAT Chennai29 Aug 2024AY 2010-11

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm आयकरअपील सं./ Ita No.775/Chny/2018 (िनधा"रणवष" / Assessment Year: 2010-2011 ) Indian Overseas Bank, Vs. The Deputy Commissioner Of 763, Anna Salai, Income Tax, Chennai 600 002. Large Taxpayer Unit-2, Chennai 600 034. आयकरअपील सं./ Ita No.946/Chny/2018 (िनधा"रणवष" / Assessment Year: 2010-2011. ) The Assistant Commissioner Of Vs. Indian Overseas Bank, Income Tax, 763, Anna Salai, Large Taxpayer Unit-2, Chennai 600 002. Chennai 600 034. [Pan: Aaaci 1223J] (अपीलाथ"/Appellant) (""यथ"/Respondent) Assessee By : Shri. C. Naresh, C.A., Department By : Shri. A. Sasikumar, Irs, Cit. सुनवाई क" तार"ख/Date Of Hearing : 06.08.2024 घोषणा क" तार"ख /Date Of Pronouncement : 29.08.2024

For Appellant: Shri. C. Naresh, C.AFor Respondent: Shri. A. Sasikumar, IRS, CIT

Section 115JSection 143(2)Section 143(3)Section 148Section 263Section 36(1)(viia)

without there being any new ‘tangible material’ or fresh ‘information’ in the possession of AO to come to the conclusion that there is escapement of income. Ld.AR further submitted that the reopening was done in respect of unreconciled entries in NOSTRO account and amount received from Government under Agricultural Debt ... assessee dehors the judgment of the Hon’ble Supreme Court enquiry was not done properly. He further contended that there is escapement of income hence reopening is justified. 8. We have heard the rival submissions and gone through the record, paper books and impugned order. The reasons for reopening recorded

Indian Overseas Bank, Chennai vs. DCIT Ltu-2, Chennai

In the result, the appeal of the assessee (ITA No

ITA 775/CHNY/2018[2010-11]Status: DisposedITAT Chennai29 Aug 2024AY 2010-11

For Appellant: Shri. C. Naresh, C.AFor Respondent: Shri. A. Sasikumar, IRS, CIT

Section 115JSection 143(2)Section 143(3)Section 148Section 263Section 36(1)(viia)

Sarita Gupta, Alwar vs. PCIT(Central), Jaipur

The appeal of the assessee is partly allowed

ITA 662/JPR/2024[2018-19]Status: DisposedITAT Jaipur29 Aug 2024AY 2018-19

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

For Appellant: Sh. P. C. Parwal, CAFor Respondent: Sh. Arvind Kumar, CIT-DR

Section 115BSection 133ASection 139Section 142(1)Section 143(2)Section 143(3)Section 263Section 44A

were materials available on record which warranted exercise of jurisdiction under section 154 and the other initiated under section 147 that there was escapement of income from tax on account of the failure of the assessee from disclosing the full and correct particulars, I have no hesitation in quashing

Brij Bihari Agrawal, Jaipur vs. The Assistant Commissioner of Income Tax Central Circle - 1, Jaipur

In the result the appeal of the assessee is allowed

ITA 737/JPR/2023[2013-14]Status: DisposedITAT Jaipur29 Aug 2024AY 2013-14

For Appellant: Shri Tarun Mittal (C.A)

Section 142(1)Section 147Section 148Section 153ASection 153C

some entries found recorded with some third party, during search operation, without independent application of mind to arrive at the conclusion of escapement of income. In this regard it is humbly submitted that, the case of assessee was reopened merely for the reason that, a pen drive was found from ... power to reopen the assessment under section 147 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. Jai Hotels Co. Limited Vs. Asst

Income Tax Officer - 19(2)(2), Mumbai vs. Kuverben Kantilal Raval, Mumbai

In the result all the grounds of the appeal of the learned assessing officer are dismissed

ITA 2066/MUM/2024[2013-14]Status: DisposedITAT Mumbai29 Aug 2024AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm A.Y.2013-14 The Income Tax Officer Kunverben Ratilal Raval 7, Taldhwaj Bhavan 19 (2) (2) Mumbai 3 Road 503, 5Th Floor, Pinjrapole Lane Vs. Piramal Chambers Mumbai 400004 Lal Baug, Parel Mumbai (Appellant) (Respondent) Pan Aadpr8076L Assessee By Mr Mitesh Mehta Ca Revenue By Shri P D Chougule Adl Cit Sr Dr Date Of Hearing 14-08-2024 Date Of Pronouncement 29.08.2024

Section 131Section 143Section 144BSection 147Section 148

transaction in client code modification. Assessee also objected to reopening of assessment stating that reasons does not name the assessee, there is no escapement of income and transactions are already recorded in the books of the assessee. On NSEL commodity transaction there is no delivery of goods but same ... next assessment year 2014 – 15 and not for the assessment year 2013 – 14.Therefore, he quashed reopening of the assessment stating there is no escapement of income, there is no live link. 10. Aggrieved with the order of the learned CIT – A the learned assessing officer is in appeal before

Deputy Commissioner of Income Tax, New Delhi vs. Yellow Sapphire International Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 3467/DEL/2023[2014-15]Status: DisposedITAT Delhi29 Aug 2024AY 2014-15

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Kumar

For Appellant: NoneFor Respondent: Sh. Amit Katoch, Sr. DR

Section 2(22)Section 2(22)(e)Section 212Section 56Section 56(1)

corrective measure by treating this dividend income at the hands of the shareholders and tax them accordingly. As otherwise, it would amount to escapement of income at the hands of those shareholders.” 7. The decision of Hon’ble High Court of Delhi referred above was affirmed by Hon’ble Supreme

Deputy Commissioner of Income Tax, Aurangabad vs. Suryachandra Lalmani Dubey, Aurangabad

In the result, appeal of the Revenue is allowed

ITA 206/PUN/2024[2014-15]Status: DisposedITAT Pune28 Aug 2024AY 2014-15

Bench: SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE (Accountant Member)

Section 143(1)Section 147Section 148Section 250

that the AO had recorded the reasons for reopening the case for verification. Whereas in fact, the issue on which reasons recorded for escapement of income was not suffixed by the word "needs to verify". 3. On the facts and circumstance of the case and in law, whether the Ld.CIT ... case and in law, whether the - Ld.CIT(A)-12, Pune was justified in holding that there was no tangible material which suggests that escapement of income. Whereas in fact tangible material in the form of ledger abstract was available with AO on the basis of which he has formed

The Prudential Co-Operative Urban Bank Limited, Secunderabad vs. Dy. Commissioner of Income Tax, Circle-2(3), Hyderabad

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

ITA 101/HYD/2018[2005-06]Status: DisposedITAT Hyderabad28 Aug 2024AY 2005-06

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri A.V. Raghuram, AdvocateFor Respondent: : Shri Kumar Pranav, CIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 40

ground that the license of the assessee was cancelled by RBI on 04.12.2004 and due to cancellation of the license there was escapement of income in the hands of the assessee on account of NPA provisions, which was to be disallowed due to such cancellation. Now in the second round

Rahul Agarwal, Bengaluru vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(1), Bengaluru

In the result, the appeal of the assessee is allowed as above

ITA 765/BANG/2024[2016-17]Status: DisposedITAT Bangalore28 Aug 2024AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Shri Bharadwaj Sheshadri, Advocate &For Respondent: Shri Senthil Kumar N., CIT(DR)(ITAT), Bengaluru

Section 10(35)Section 111ASection 133ASection 143(3)Section 144C(15)(b)Section 147Section 148Section 148A

account and duly offered in his return. The AO noted that the reason to issue notice u/s. 148 is based on information regarding escapement of income based on sham dividend and fictitious losses which was not disclosed by the assessee nor available to the AO which was received after completion ... Rules & Regulations and did not file information within the due time, therefore dividend received from JM Financial and claimed as exempt income is escapement of income. He reiterated the case laws relied on by the ld. DRP. 10. Considering the rival submissions, we note that assessee was issued notice

DCIT, Cir-3(3)(1), Mumbai vs. Motech Software Pvt Ltd, Mumbai

ITA 2295/MUM/2023[2007-08]Status: DisposedITAT Mumbai28 Aug 2024AY 2007-08

Bench: Shri B.R. Baskaran & Shri Pavan Kumar Gadale

Section 69

linked to. It is well settled proposition of law that the AO is required to have reasons to believe that there was escapement of income, at the time of reopening of assessment. However, during the course of 12 Motech Software Pvt. Ltd., assessment proceedings, the AO may also come ... basis of materials examined by him. Hence the correctness or otherwise of the reasons entertained by the AO to believe that there was escapement of income can be known only when proper enquiries are made during the course of assessment proceedings. Such types of enquiries cannot be termed as fishing

DCIT, Cir-3(3)(1), Mumbai vs. Motech Software Pvt Ltd, Mumbai

ITA 2294/MUM/2023[2006-07]Status: DisposedITAT Mumbai28 Aug 2024AY 2006-07

Bench: Shri B.R. Baskaran & Shri Pavan Kumar Gadale

For Appellant: Shri F.V. Irani, &For Respondent: Smt. Sanyogita Nagpal &

Section 69

linked to. It is well settled proposition of law that the AO is required to have reasons to believe that there was escapement of income, at the time of reopening of assessment. However, during the course of Motech Software Pvt. Ltd., assessment proceedings, the AO may also come ... basis of materials examined by him. Hence the correctness or otherwise of the reasons entertained by the AO to believe that there was escapement of income can be known only when proper enquiries are made during the course of assessment proceedings. Such types of enquiries cannot be termed as fishing

Preet International Pvt Ltd, New Delhi vs. ACIT Circle-20(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3600/DEL/2019[2010-11]Status: DisposedITAT Delhi28 Aug 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Vimal Kumarpreet International Pvt. Ltd, Vs. Acit, 240, Ff, Dda Office Complex Circle-20(1), Cycle Market, Jhandewalan New Delhi Extn, New Delhi (Appellant) (Respondent) Pan: Aaaco9321J Assessee By : Shri Ved Jain, Adv Ms. Supriya Mehta, Ca Revenue By: Shri Vivek Vardha, Sr. Dr Date Of Hearing 05/06/2024 Date Of Pronouncement 28/08/2024

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Vivek Vardha, Sr. DR

Section 143(3)Section 147Section 148

case, the dispute is whether there is any tangible material to infer that by way of the client code modification, the assessee has escaped the income and evaded the Income-tax. The Learned Counsel of the assessee has referred to the various decisions mentioned above, wherein cases were reopened ... orders. The reasons do not indicate the basis for the Assessing Officer to come to reasonable belief that there has been any escapement of income on the ground that the modifications done in the client code was not on account of a genuine error, originally occurred while punching the trade