“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

Omprakash Reddy Gangidi, Ranga Reddy vs. ITO, Ward-8(2), Hyderabad

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 92/HYD/2023[2013-14]Status: DisposedITAT Hyderabad27 Aug 2024AY 2013-14

Bench: Shri Laliet Kumar & Shri Manjunatha, G.आ.अपी.सं /Ita No. 92/Hyd/2023 (िनधा"रण वष"/Assessment Year: 2013-14) Om Prakash Reddy Gangidi Vs. Income Tax Officer R.R. Distt Ward 8(2) Pan:Afapg9255J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Advocate Santi Pavan For C.A. Pawan Kumar राज" व "ारा/Revenue By:: Shri Srinath Sadanala, Dr सुनवाई की तारीख/Date Of Hearing: 27/08/2024 घोषणा की तारीख/Pronouncement: 27/08/2024 आदेश/Order

For Appellant: Advocate Santi Pavan for C.AFor Respondent: : Shri Srinath Sadanala, DR

Section 147Section 271(1)(c)

gains, the assessee has considered the market value of land as sale consideration which works out to Rs.30,28,622/-. As there is escapement of income, proceedings u/s 147 of the I.T. Act, 1961 was initiated and a notice u/s 147 of the Act was issued. The assessment was completed

Quartz Infra and Engineering Private Limited, Hyderabad vs. Shri B. R. Ramesh Deputy Commissioner of Income Tax Central Circle16-(1), Hyderabad

In the result appeal of the assessee is allowed in part

ITA 98/HYD/2021[2011-12`]Status: DisposedITAT Hyderabad27 Aug 2024

Bench: Shri K.Narasimha Chary & Shri Madhusudan Sawdiaआ.अपी.सं / Ita No.98/Hyd/2021 (निर्धारण वर्ा / Assessment Year: 2011-12) M/S Quartz Infra & Engineering P.Ltd. Vs. Dcit, Circle-16(1) Hyderabad Hyderabad [Pan :Aaacq1546N] अपीलधर्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee By: Sri Pavan Kumar Chakrapani, Ar रधजस्‍व द्वधरध/Revenue By: Sri Kumar Pranav, Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 30 /07/2024 घोर्णध की तधरीख/Pronouncement On: 27/08/2024 आदेश / Order Per K. Narasimha Chary, J.M: Aggrieved By The Order Dated 27/02/2020 Passed By The Learned Commissioner Of Income Tax (Appeals) (“Learned Cit(A)”)-4, Hyderabad In The Case Of M/S Quartz Infra & Engineering Private Ltd.(“The Assessee”) For The Assessment Year 2011-12, Assessee Preferred This Appeal, With A Delay Of 264 Days.

For Appellant: Sri Pavan Kumar Chakrapani, ARFor Respondent: Sri Kumar Pranav, CIT-DR

Section 115JSection 143(1)Section 143(3)Section 147Section 148

assessment and it works anti thesis when the learned Assessing Officer entertains an opinion that a contingency may arise in future, resulting in escapement of income. For this proposition, he placed reliance on the decision of the Hon'ble Bombay High Court in the case of DHFL Venture Capital Fund ... investigation Directorate and the learned Assessing Officer did not conduct any enquiry to reach an independent satisfaction to believe that there was escapement of income. 10. Per contra, the learned DR submitted that in this matter, pursuant to the search and seizure operations in the case of M/s JindaL Group

M/S. Krishna Nirman Pvt. Ltd., Kolkata vs. I.T.O., Ward - 7(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 155/KOL/2023[2008-2009]Status: DisposedITAT Kolkata27 Aug 2024AY 2008-2009

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

Section 131Section 133(6)Section 143(1)Section 147Section 148Section 250Section 68

form the belief that income has escaped assessment. In our opinion, before reopening of the assessment, the Ld.AO has to satisfied about the escapement of income, it is not permissible under the Act to reopening the assessment u/s 147 of the Act by issuing notice ... belief Le there must be a live link between material coming the notice of the Assessing Officer and the formation of belief regarding escapement of income. If the aforesaid requirement are not met, the Assessee is entitled to challenge the very act of re- opening of Assessment and assuming jurisdiction

Cheyur Ramakrishnan, Chennai vs. ITO, Business Ward - 2(3), Chennai

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

ITA 334/CHNY/2024[2007-08]Status: DisposedITAT Chennai27 Aug 2024AY 2007-08

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm आयकरअपील सं./ Ita No.334/Chny/2024. (िनधा"रणवष" / Assessment Year: 2007-2008) Cheyur Ramakrishnan Rajkumar, Vs. The Income Tax Officer, No.7/4, Meenakshi P.S Business Ward Ii(3) Sivasamy Road, Chennai. Mylapore, Chennai 600 004. [Pan: Accpr 4434P] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Shri. R. Subramanian, C.A., ""यथ" क" ओर से /Respondent By : Shri. Arv Srinivasan, Irs, Addl.Cit. सुनवाई क" तार"ख/Date Of Hearing : 19.06.2024 घोषणा क" तार"ख /Date Of Pronouncement : 27.08.2024 आदेश / O R D E R Per Manu Kumar Giri ()

For Appellant: Shri. R. Subramanian, C.AFor Respondent: Shri. ARV Srinivasan, IRS, Addl.CIT

Section 143(1)Section 143(3)Section 147Section 148Section 151Section 2(14)Section 54B

that the Commissioner of Income Tax (Appeals) failed to appreciate that the reasons for reopening does not indicate escapement of income and the reasons are vague and hence the reopening as well as the consequent reassessment are bad in law. 7. For that Commissioner of Income Tax (Appeals) failed ... April, 1989, the 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 link with the formation of the belief.’’ 12. If the assessing officer, after issuing intimation u/s section

Padam Kumar Goyal, Tonk vs. ITO Ward-Tonk, Income Tax Department, Tonk

In the result the appeal of the assessee is allowed for statistical purposes

ITA 581/JPR/2024[2012-13]Status: DisposedITAT Jaipur27 Aug 2024AY 2012-13

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Nikhilesh Kataria (C.A)For Respondent: Smt. Monisha Choudhary (Addl. CIT)

Section 131Section 143(2)Section 144Section 147Section 148

belief based on faithful appreciation of material which has live link to an income escaping assessment, but not the established fact of escapement of income by detailed investigation or legal analysis. In other words, at the point of time of initiating the reassessment proceedings, existence, and not adequacy of reasons ... 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

Goyal Vegoils Limited, Kasar, Kota vs. DCIT, Circle -2, Kota

In the result ground no. 2 & 3 raised by the assessee

ITA 243/JPR/2024[2012-13]Status: DisposedITAT Jaipur27 Aug 2024AY 2012-13

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. Rajendra Sisodia, CAFor Respondent: Sh. Anoop Singh, Addl. CIT

Section 143(3)Section 147Section 148Section 250

time of issuing notice under section 148, the Assessing Officer is only required to reach a tentative or prima facie belief regarding escapement of income and that requirement is satisfied in the instant case. In view of the foregoing discussion, it is held that the notice issued by the Assessing

Jet Infraventure Limited, Mumbai vs. ITO Ward-12(3)(1), Mumbai

In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for stati...

ITA 2337/MUM/2024[2013-14]Status: DisposedITAT Mumbai27 Aug 2024AY 2013-14

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh ()

For Appellant: Ms. Rajeshwari Menon, Sr. DRFor Respondent: Mr. Gunjan H Kakkad

Section 133(6)Section 147Section 148Section 68

appellan the hands of the appellant, which are essential requirement for forming t, which are essential requirement for forming belief about escapement of income when interest paid on such credit is belief about escapement of income when interest paid on such credit is belief about escapement of income when interest ... loan being accommodation to believe that said unsecured loan being accommodation to believe that said unsecured loan being accommodation entry and hence income escaped assessment. income escaped assessment. 3.1 During the course of reassessment proceedings, the Assessing During the course of reassessment proceedings, the Assessing During the course of reassessment

Balram Chainrai, Mumbai vs. Int Tax, Ward 2(1)(1), Mumbai

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

ITA 2267/MUM/2024[2016-17]Status: DisposedITAT Mumbai27 Aug 2024AY 2016-17

Bench: Ms Padmavathy S, Am & Shri Sunil Kumar Singh, Jm

For Appellant: Shri Ravikant Pathak, ARFor Respondent: Shri Anil Sant, Addl. CIT-DR

Section 144BSection 147Section 148Section 153Section 271(1)(c)

emphasis, italicised in print, supplied) 18. It is settled law that the reasons for the formation of the belief that there has been escapement of income must have a rational connection with or relevant bearing on the information. Rational connection postulates that there must be a direct nexus or live ... link between the material coming to the notice of the ITO and his view that there has been escapement of income of the assessee from assessment in the particular year. It is settled law that it is not any and every material, howsoever vague and indefinite or distant, remote

ACIT, Circle-24(1), Mumbai vs. Jasvinder Kalyan Saluja, Mumbai

In the result, the cross the result, the cross-objections of the assessee are allowed of the assessee are allowed whereas appeal of the Revenue is dismissed

ITA 1987/MUM/2024[2013-14]Status: DisposedITAT Mumbai27 Aug 2024AY 2013-14

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh () Assessment Year: 2013-14 Acit, Circle-24(1), Jasvinder Kalyan Saluja, 601, 6Th Floor, K-1, Balkrishna Chs, Jp Piramal Chambers, Lalbaug, Vs. Road, Andheri West, Parel, Mumbai-400053. Mumbai-400012. Pan No. Amgps 5143 Q Appellant Respondent

For Appellant: Mr. Ajay SinghFor Respondent: 08/07/2024

Section 69A

there is "tangible material" to come to the conclusion that open, provided there is "tangible material" to come to the co there is escapement of income from assessment. Reasons must have a there is escapement of income from assessment. Reasons must have a there is escapement of income from assessment

Jet Infraventure Limited, Mumbai vs. ITO Ward-12(3)(1), Mumbai

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

ITA 1020/MUM/2024[2013-14]Status: DisposedITAT Mumbai27 Aug 2024AY 2013-14

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh ()

For Appellant: Mr. Gunjan H KakkadFor Respondent: Ms. Rajeshwari Menon, Sr. DR

Section 133(6)Section 147Section 148Section 68

appellant and how it will constitute income in the hands of the appellant, which are essential requirement for forming belief about escapement of income when interest paid on such credit is not in disputed and also the repaid loan during the year under consideration is also not under dispute

Kissan Fats Ltd., Bathinda vs. DCIT, CC-1, Ludhiana

In the result, the appeal of the assessee is allowed

ITA 408/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh26 Aug 2024AY 2013-14

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Amanpreet Kaur, Sr. DR

Section 133(6)Section 143(3)Section 147Section 148Section 151(1)Section 250(6)Section 253

held that “the AO has power to reopen a case, provided there is tangible material to come to the conclusions that thee is escapement of income of the assessee. The reasons must have a live link with the formation of belief. At the stage when the AO reopens an assessment ... whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the material would conclusively prove the escapement of income is not the concern at that stage. The Ld. CIT()A has also placed reliance on judgement of Hon’ble Supreme Court of India

Purple Suppliers Pvt. Ltd., Surat, Gujrat vs. A.C.I.T., Circle - 5(1), Kolkata

In the result, all the three appeal for AYs 2011-12 to 2013-14 of the assessee are allowed

ITA 759/KOL/2022[2013-2014]Status: DisposedITAT Kolkata26 Aug 2024AY 2013-2014

Bench: Dr. Manish Borad & Shri Sonjoy Sarmai.T.A. Nos.757 To 759/Kol/2022 Assessment Years: 2011-12 To 2013-14 Purple Suppliers Pvt. Ltd. ………. Appellant (Pan: Aafcp2218P) Vs. Asstt. Commissioner Of Income Tax, Circle-5(1), Kolkata. ………… Respondent Appearances By: Shri Anil Kochar, Advocate Appeared For Appellant. Shri Subhendu Datta, Cit, Dr Appeared For Respondent. Date Of Concluding The Hearing : 28.05.2024 Date Of Pronouncing The Order : 26.08.2024 Order Per Manish Borad: The Captioned Appeals Filed At The Instance Of The Assessee Pertaining To The Assessment Years (In Short “Ay”) 2011-12 To 2013-14 Are Directed Against The Separate Orders Passed U/S 250 Of The Income Tax Act, 1961 (In Short The “Act”) By Ld. Commissioner Of Income-Tax, Appeal, National Faceless Appeal Centre (Nfac), Delhi [In Short Ld. “Cit(A)”] Dated 03.11.2022 Arising Out Of The Separate Assessment Orders U/S 143(3)/147 Of The Act By Acit, Circle-5(1), Kolkata Dated 31.12.2018. Since Grounds Of Appeal Raised In These Appeals Are Common & Facts Are Identical, Except Variance In Amount, With The Consent Of Both The Parties, We Proceed To Dispose Of All These Appeals By This Consolidated Order For The Sake Of Brevity & Convenience.

Section 143(3)Section 147Section 148Section 250Section 69C

assessee from Investigation Wing Member before reopening the assessment proceedings has to first form a belief about the escapement of income and that there is a failure on the part of the assessee to discharge all material facts in the regular return of income filed by it. And this could ... come to a conclusion that certain material information has not been submitted by the assessee in its return and that give rise to escapement of income. However, in the instant case all these actions which the Ld. AO should have carried out, are totally missing. It is clearly discernible from

Purple Suppliers Pvt. Ltd., Surat, Gujrat vs. A.C.I.T., Circle - 5(1), Kolkata

In the result, all the three appeal for AYs 2011-12 to 2013-14 of the assessee are allowed

ITA 758/KOL/2022[2012-2013]Status: DisposedITAT Kolkata26 Aug 2024AY 2012-2013

Section 143(3)Section 147Section 148Section 250Section 69C

Purple Suppliers Pvt. Ltd., Surat, Gujrat vs. A.C.I.T., Circle - 5(1), Kolkata

In the result, all the three appeal for AYs 2011-12 to 2013-14 of the assessee are allowed

ITA 757/KOL/2022[2011-2012]Status: DisposedITAT Kolkata26 Aug 2024AY 2011-2012

Section 143(3)Section 147Section 148Section 250Section 69C

Abhishek Gordhanlal Trivedi, Mumbai Maharashtra vs. ITO Ward 42(1)(1), Mumbai, Maharashtra

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

ITA 1841/MUM/2024[2012-13]Status: DisposedITAT Mumbai26 Aug 2024AY 2012-13

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaran: A.Y : 2012-13

For Appellant: Shri R.I. ChokseyFor Respondent: Shri Manoj Kumar Sinha, Sr.DR

Section 142(1)Section 143(2)Section 148Section 69A

which was very much higher than the income declared by the assessee. Hence, the AO entertained the belief that there was escapement of income. Accordingly, he reopened the assessment by issuing of notice u/s.148 of the Act. 3. The AO noticed that the assessee has initially made investment ... known sources of income, we are of the view that the AO was justified in entertaining the belief that there was escapement of income. During the course of hearing, the Ld A.R pointed out certain discrepancies in the reasons recorded by the AO. However, on reading of the reasons recorded

Shri Bhanvarlal Champalal Kanuga, Unjha vs. The Pr. CIT-3, Ahmeabad

In the result, the appeal filed by the Assessee is hereby dismissed

ITA 95/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad23 Aug 2024AY 2017-18

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.95/Ahd/2022 "नधा"रण वष" /Assessment Year : 2017-18 Shri Bhanvarlal Champalal The Principal Cit बनाम/ Kanuga Range-3 C/O. Ketan H. Shah, Advocate Pratyakash Kar Bhavan V/S. 512, Times Square – I Ahmedabad Opp. Ram Baug Bungalows Nr. Ravija Plaza Thaltej-Shilaj Road Ahmedabad – 380 059. (Gujarat) "थायी लेखा सं./Pan: Acmpk 0172 H अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Ketan H. Shah, Ar & Shri Aman Shah, Ar Revenue By : Shri Pushpendra Singh Chaudhary, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 07/08/2024 घोषणा क" तार"ख /Date Of Pronouncement: 23/08/2024 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Dated 29/03/2022 Passed By The Principal Commissioner Of Income Tax-3, Ahmedabad [Hereinafter Referred To As “Pcit(A)” In Short] In Exercise Of The Shri Bhanvarlal Champalal Kanuga Vs. Pr.Cit-3 Asst. Year : 2017-18

For Appellant: Shri Ketan H. Shah, AR &For Respondent: Shri Pushpendra Singh

Section 143(1)Section 143(3)Section 263

submitted to the AO at the time of assessment proceedings, and they were considered by the AO while completing the assessment, therefore, the escapement of income cannot be ground for revisional order. The assessee also stated that the facts and circumstances of decision of Ahmedabad Tribunal in the case

DCIT, Intl. Taxn., Circle 1(2), Bangalore vs. Ibm Canada Limited, Bangalore

In the result, the appeal filed by the revenue is hereby dismissed

ITA 1330/BANG/2024[2014-15]Status: DisposedITAT Bangalore23 Aug 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Yogesh Kumar Us

For Appellant: Shri Sharath Rao, CA, Dhiraj R, AdvocateFor Respondent: Shri Subramanian S, JCIT

Section 143(3)Section 147Section 148Section 201Section 9(1)(vii)

case of IBM India private limited, a notice under section 148 was issued to the assessee being a foreign company on account of escapement of income chargeable to tax in the hands of the assessee being a foreign company amounting to ₹ 2,97,69,953.00 which was admittedly chargeable ... India private limited, a notice was issued in the case of the assessee under section 148 of the Act on account of escapement of income of ₹ 2,97,69,953.00 only. However, the assessee being a foreign company has also included the income which was paid by IBM India private