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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

Mansukh Arjanbhai Sureja, Mumbai vs. DCIT, Circle 42(1)(1), Mumbai

ITA 4348/MUM/2023[2011-12]Status: DisposedITAT Mumbai23 Aug 2024AY 2011-12

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bleι.Τ.Α. No. 4348 & 4347/Mum/2023

For Appellant: Shri Hariom Tulsiyan, A/RFor Respondent: Smt. Sanyogita Nagpal & Smt. Mahita Nair, Sr. D/R
Section 69C

said date. D. The assessing officer failed to establish a live link between the materials relied upon for reopening the assessment and escapement of income in the hands of the assessee which is evident from the fact that the Ld. A.O. incorrectly stated in the reasons for reopening the assessment

Mansukh Arjanbhai Sureja, Mumbai vs. DCIT, Circle 42(1)(1), Mumbai

In the result, appeals of the assessee are allowed

ITA 4347/MUM/2023[2012-13]Status: DisposedITAT Mumbai23 Aug 2024AY 2012-13

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sandeep Singh Karhail, Hon’Ble

For Appellant: Shri Hariom Tulsiyan, A/RFor Respondent: Smt. Sanyogita Nagpal & Smt. Mahita Nair, Sr. D/R
Section 69C

said date. D. The assessing officer failed to establish a live link between the materials relied upon for reopening the assessment and escapement of income in the hands of the assessee which is evident from the fact that the Ld. A.O. incorrectly stated in the reasons for reopening the assessment ... Assessing Officer issue a reopening notice at the dictate and/or satisfaction of some other authority. Therefore, on receipt of any information which suggests escapement of income, the Assessing Officer must examine the information in the context of the facts of the case and only on satisfaction leading to a reasonable

Rehber Food Industries Pvt. Ltd, Bareilly vs. Pr. Commissioner of Income Tax, Bareilly

In the result, the appeal of the assessee is dismissed

ITA 146/LKW/2022[2017-18]Status: HeardITAT Lucknow22 Aug 2024AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguriaassessment Year: 2017-18 Rehber Food Industries Pvt Pr. Commissioner Of V. Ltd Income Tax Old Name, M/S. Marya Forzen Aayakar Bhawan, Agro Foods Pvt. Ltd. Bareilly-243005. B-51, Second Floor, Butler Plaza,Civil Lines, Bareilly- 243001. Pan:Aafcm8846E (Appellant) (Respondent) Appellant By: None (Adj. Application Filed) Respondent By: Shri. Mazhar Akram, Cit(Dr) Date Of Hearing: 20 08 2024 Date Of Pronouncement: 22 08 2024 O R D E R

For Appellant: None (Adj. Application filed)For Respondent: Shri. Mazhar Akram, CIT(DR)
Section 142(1)Section 143(2)Section 143(3)Section 263Section 4

made by the assessee. There is no application of mind by the CIT to form any specific opinion on the matter concerning any escapement of income from taxation or the prejudice caused to revenue or the error committed by the assessing authority and accordingly the impugned order deserves

Tej Organisers Pvt.Ltd., Ahmedabad vs. Income Tax Officer, Ward-4(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 50/AHD/2022[2012-13]Status: DisposedITAT Ahmedabad22 Aug 2024AY 2012-13

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Biren Shah & Shri Gulab Thakor, A.RsFor Respondent: Shri Ashok Kumar Suthar, Sr. DR
Section 143(1)Section 143(3)Section 147Section 148Section 271(1)(c)Section 274

company allegedly failed to disclose an advance of Rs. 2,85,00,000/- in its return, leading to potential escapement of income. The Tej Organisers Pvt. Ltd. vs. ITO Asst.Year –2012-13 - 5– Ld. Counsel for the assessee submitted that the transactions with Shri K.M. Thakkar were recorded ... assessee company has not shown complete details of advances to Shri Kanaiyo Thakkar in it’s return of income and hence there was escapement of income to the extent of Rs. 2,85,00,000/-. However, during the course of hearing, the Counsel for the assessee submitted that the assessee

Anchita Properties Pvt. Ltd., Kolkata vs. ITO, Ward-12(1), Kolkata.

In the result, both the appeals of the assessee are allowed

ITA 637/KOL/2024[2013-14]Status: DisposedITAT Kolkata22 Aug 2024AY 2013-14

Bench: Shri Rajpal Yadav, Vice-(Kz) & Dr. Manish Boradi.T.A. No. 637/Kol/2024 Assessment Year: 2013-2014 Anchita Properties Pvt. Limited,………………Appellant 29, Collotola Street, Kolkata-700029 [Pan:Aahca9115E] -Vs.- Income Tax Officer,………………………….……Respondent Ward-12(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 & I.T.A. No. 1067/Kol/2024 Assessment Year: 2013-2014 Anchita Properties Pvt. Limited,………………Appellant 29, Collotola Street, Kolkata-700029 [Pan:Aahca9115E] -Vs.- Principal Commissioner Of Income Tax,…Respondent Pcit, Kolkata-2, Office Of The Income Tax Officer, Ward-12(1), Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069

Section 133(6)Section 139(1)Section 143(2)Section 143(3)Section 147Section 148Section 250Section 263Section 68

without application of mind. (viii) There is no live link between the reasons recorded u/s 148 of the Act and belief of escapement of income as the facts recorded in the reasons are incorrect. 7. The ld. Assessing Officer has not disposed of the objections separately in terms ... details of assets, nature of income earned in relation to the assets. The AO must highlight that since it is a case of escapement of income in relation to assets located outside India, first Proviso to the section will not apply”. 13 & Anchita Properties Pvt. Ltd. 12. In this above

Anchita Properties Pvt. Ltd., Kolkata vs. P.C.I.T., Kolkata - 2, Kolkata

In the result, both the appeals of the assessee are allowed

ITA 1067/KOL/2024[2013-2014]Status: DisposedITAT Kolkata22 Aug 2024AY 2013-2014

Bench: Shri Rajpal Yadav, Vice-(Kz) & Dr. Manish Boradi.T.A. No. 637/Kol/2024 Assessment Year: 2013-2014 Anchita Properties Pvt. Limited,………………Appellant 29, Collotola Street, Kolkata-700029 [Pan:Aahca9115E] -Vs.- Income Tax Officer,………………………….……Respondent Ward-12(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 & I.T.A. No. 1067/Kol/2024 Assessment Year: 2013-2014 Anchita Properties Pvt. Limited,………………Appellant 29, Collotola Street, Kolkata-700029 [Pan:Aahca9115E] -Vs.- Principal Commissioner Of Income Tax,…Respondent Pcit, Kolkata-2, Office Of The Income Tax Officer, Ward-12(1), Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069

Section 133(6)Section 139(1)Section 143(2)Section 143(3)Section 147Section 148Section 250Section 263Section 68

without application of mind. (viii) There is no live link between the reasons recorded u/s 148 of the Act and belief of escapement of income as the facts recorded in the reasons are incorrect. 7. The ld. Assessing Officer has not disposed of the objections separately in terms ... details of assets, nature of income earned in relation to the assets. The AO must highlight that since it is a case of escapement of income in relation to assets located outside India, first Proviso to the section will not apply”. 13 & Anchita Properties Pvt. Ltd. 12. In this above

Thayappa Balakrishna, Bangalore vs. The Principal Commissioner of Income Tax, Bengaluru-1, Bengaluru

In the result, the appeal filed by the assessee stands allowed

ITA 1027/BANG/2024[2014-15]Status: DisposedITAT Bangalore22 Aug 2024AY 2014-15

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2014-15 Shri Thayappa Balakrishna, No. 987, 11Th Main, The Principal 1St Block, Commissioner Of 3Rd Stage, Income-Tax, Basaveshwaranagar, Bengaluru – 1. Vs. Bangalore – 560 079. Pan: Abdpb4893N Appellant Respondent : Shri Ravi Shankar .S.V, Assessee By Advocate Revenue By : Shri D.K. Mishra, Cit-Dr

For Respondent: Shri Ravi Shankar .S.V
Section 143(3)Section 147Section 148Section 263

Supreme Court dealt with the following question of law in the course of its judgment:— "Where an item unconnected with the escapement of income has been concluded finally against the assessee, how far in reassessment on an escaped item of income is it open to the assessee to seek

Ecgc Limited, Mumbai vs. ACIT 3(1)(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 352/MUM/2024[2012-13]Status: DisposedITAT Mumbai22 Aug 2024AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI RATNESH NANDAN SAHAY (Accountant Member)

Section 115JSection 143(3)Section 147Section 148

relevant assessment year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is escapement of income from assessment and that there has been a failure to disclose fully and truly material facts as per the requirement stipulated in the proviso ... years even if the Assessing Officer has some tangible material to come to the conclusion that there is an 11 M/s. ECGC Limited escapement of income from assessment, he cannot exercise the power to reopen unless he discloses what was the material fact which was not truly and fully disclosed

Netherlands Operating Company B.V., Chennai vs. The Assistant Commissioner of Income Tax, Int. Taxation 2(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 1198/CHNY/2023[2010-11]Status: DisposedITAT Chennai21 Aug 2024AY 2010-11

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.1198/Chny/2023 िनधा"रणवष"/Assessment Year: 2010-11 V. Netherlands Operating Company B.V. The Acit, Rmz Millenia (Phase-1), International Taxation -2(1), Business Park, 4Th Floor, Campus 1C, Chennai. 11, Dr. M.G.R. Road, Kandanchavadi, Perungudi, Chennai-600 096. [Pan: Aabcl 0573 D] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri Vishal Kalra, Adv. &For Respondent: Shri R. Clement Ramesh –
Section 143Section 143(2)Section 143(3)Section 144C(1)Section 144C(3)(b)Section 147Section 148

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

Mr. Ramprakash Mathuradas Dhingra, Mumbai vs. ITO, Ward 2(3), Kalyan

In the result, the appeals of the assessee for AY 2010-11 and AY 2011-12

ITA 4303/MUM/2023[2011-12]Status: DisposedITAT Mumbai21 Aug 2024AY 2011-12

Bench: Ms Padmavathy S, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Joginder Singh, Sr. DR
Section 147Section 148Section 2(14)Section 251Section 68Section 69A

relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been a failure to fully and truly disclose material fact. 7. In the background of this settled legal position

Mr. Ramprakash Mathuradas Dhingra, Mumbai vs. ITO Ward 2(3), Kalyan

In the result, the appeals of the assessee for AY 2010-11 and AY 2011-12

ITA 4302/MUM/2023[2010-11]Status: DisposedITAT Mumbai21 Aug 2024AY 2010-11

Bench: Ms Padmavathy S, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Joginder Singh, Sr. DR
Section 147Section 148Section 2(14)Section 251Section 68Section 69A

relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been a failure to fully and truly disclose material fact. 7. In the background of this settled legal position

Champion Builder Pvt. Ltd., Kolkata vs. ITO, Ward-1(3), Gurgaon

In the result, both the appeals of the assessee are partly

ITA 462/DEL/2024[2015-16]Status: DisposedITAT Delhi21 Aug 2024AY 2015-16

Bench: Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A Nos.462 & 463/Del/2024 िनधा"रणवष"/Assessment Years: 2015-16 & 2016-17

Section 144BSection 147Section 148Section 68

merits is again to prima facie belief. It is the submission of the Ld. DR that AO is not to conclusively prove the escapement of income to assume jurisdiction u/s 147 of the Act. 10. The Ld. DR in support of the above contentions relied upon various case laws ... received on accommodation entries should be tax in the case of the assessee. 6. Basis of forming reason to believe and details of escapement of income: It is pertinent to mention here that in this case the assessee has chosen to file return income for the year under consideration

Ravinder Baweja, Delhi vs. ACIT, Central Circle-27, New Delhi

In the result, these appeals are allowed as indicated above for

ITA 1731/DEL/2022[2017-18]Status: DisposedITAT Delhi21 Aug 2024AY 2017-18

Bench: Shri S Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Rikky Dua, AdvFor Respondent: Shri Vivek Vardhan, Sr. DR
Section 143Section 143(2)Section 143(3)Section 144Section 148Section 151Section 250(6)

vest in the Assessing Officer only if, there is tangible material in his possession for coming to a conclusion that there was an escapement of income chargeable to tax, from assessment and the reasons with the Assessing Officer must have a live link with the formation of belief. Testing

Ravinder Baweja, New Delhi vs. ACIT Central Circle-27 Jhandewalan Extn, Nes Delhi, Delhi

In the result, these appeals are allowed as indicated above for

ITA 1730/DEL/2022[2012-13]Status: DisposedITAT Delhi21 Aug 2024AY 2012-13

Bench: Shri S Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Rikky Dua, AdvFor Respondent: Shri Vivek Vardhan, Sr. DR
Section 143Section 143(2)Section 143(3)Section 144Section 148Section 151Section 250(6)

vest in the Assessing Officer only if, there is tangible material in his possession for coming to a conclusion that there was an escapement of income chargeable to tax, from assessment and the reasons with the Assessing Officer must have a live link with the formation of belief. Testing

Ravinder Baweja, New Delhi vs. ITO Ward 36(2), New Delhi

In the result, these appeals are allowed as indicated above for

ITA 2254/DEL/2019[2015-16]Status: DisposedITAT Delhi21 Aug 2024AY 2015-16

Bench: Shri S Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Rikky Dua, AdvFor Respondent: Shri Vivek Vardhan, Sr. DR
Section 143Section 143(2)Section 143(3)Section 144Section 148Section 151Section 250(6)

vest in the Assessing Officer only if, there is tangible material in his possession for coming to a conclusion that there was an escapement of income chargeable to tax, from assessment and the reasons with the Assessing Officer must have a live link with the formation of belief. Testing

Decent Industries P. Ltd., Bhopal vs. ITO-1(2), Bhopal

Appeal is partly allowed

ITA 356/IND/2023[2012-13]Status: DisposedITAT Indore20 Aug 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani(Virtual Hearing) Assessment Year: 2012-13 M/S Decent Industries Ito-1(2), Private Ltd, Bhopal 5Th Floor, Corporate Park, बनाम/ Db City Area Hills, Vs. Opp. M.P. Nagar Zone I, Bhopal (Assessee/Appellant) (Revenue/Respondent) Pan: Aaeca6271G Assessee By Ms. Shilpa Gupta & Shri N.K. Gupta Revenue By Shri V.K. Singh, Cit-Dr Date Of Hearing 04.06.2024 Date Of Pronouncement 20.08.2024

Section 133ASection 143(2)Section 147Section 148Section 14ASection 68

look into the existence of a valid reason and apply a reasonable mind in order to form a prima facie belief of escapement of income. In present case, these parameters are satisfied. Ld. AR for assessee could not substantiate as to how in present case it can be said that

Dhanuka Realty Limited, Jaipur vs. ITO Ward 4(4), Jaipur

In the result, the appeal of the assessee is allowed with no orders as to costs

ITA 202/JPR/2024[2009-10]Status: DisposedITAT Jaipur20 Aug 2024AY 2009-10

Bench: SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri Dheeraj Borad, CAFor Respondent: Mrs. Monisha Choudhary, Addl. CIT-DR
Section 143(3)Section 148Section 56(1)Section 56(2)

payers since last many years. 11 DHANUKA REALTY LTD. VS ITO, WARD 4 (4), JAIPUR 9. That as per reasons to belief escapement of income is mentioned as Rs. 46,20,000/-. As against this addition has been made at Rs. 49,50,000/- 10. In support of submissions made

Pankaj Surech Rach, Mumbai vs. Income Tax Officer, Int Tax Ward 4(1)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 2290/MUM/2024[2017-18]Status: DisposedITAT Mumbai20 Aug 2024AY 2017-18

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Rahul Chaudhary, Hon’Ble

For Appellant: Ms. Kinjal Bhuta, A/RFor Respondent: Shri Anil Sant, Addl. CIT D/R
Section 147Section 148Section 148ASection 149Section 151Section 50C

instructions would not help respondents' case at all.” 7. Further on perusal of the reasons recorded for re-opening the assessment, the escapement of income is only Rs. 9,00,000/- and for which alleged escapement is less than Rs.50,00,000/-, notice issued ... that one gets upon a holistic reading of the backdrop in which the new regime for reopening assessments was enacted is that where escapement of income was below Rs. 50 lakhs, the normal period of limitation, i.e., three (03) years was to apply. In comparison, the extended period

Rajesh Khanna, Neelkanth Plywood, Yamunanagar vs. Income Tax Officer, Ward-3, Yamunanagar

In the result, the assessee's appeal in ITA

ITA 62/CHANDI/2024[2018-19]Status: DisposedITAT Chandigarh19 Aug 2024AY 2018-19

Bench: SHRI A.D.JAIN (Vice President), SHRI KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Rohit Goel, CAFor Respondent: Shri Dharam Vir, JCIT Sr.DR
Section 148Section 69A

reasons, the following information, available with the Department was relied on by the AO to form satisfaction of escapement of income ; i) Tally Data ; and ITA 62, 230/CHD/2024 & S.A.11/CHD/2024 A.Y.2018-19 17 ii) Related material impounded during the search action on Shiv Shankar Plywood & Veneer Group, Indore. 15. As per notice ... Delhi High Court has laid down guidelines, inter-alia. that where the ITA 62, 230/CHD/2024 & S.A.11/CHD/2024 A.Y.2018-19 35 reasons to believe escapement of income make a reference to another document, whether as a lettr or a report, such document and/or relevant portion of such report should be enclosed alongwith

Income Tax Officer, Yamuna Nagar vs. Rajesh Khanna, Yamuna Nagar

In the result, the assessee's appeal in ITA

ITA 230/CHANDI/2024[2018-19]Status: DisposedITAT Chandigarh19 Aug 2024AY 2018-19

Bench: SHRI A.D.JAIN (Vice President), SHRI KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Rohit Goel, CAFor Respondent: Shri Dharam Vir, JCIT Sr.DR
Section 148Section 69A

reasons, the following information, available with the Department was relied on by the AO to form satisfaction of escapement of income ; i) Tally Data ; and ITA 62, 230/CHD/2024 & S.A.11/CHD/2024 A.Y.2018-19 17 ii) Related material impounded during the search action on Shiv Shankar Plywood & Veneer Group, Indore. 15. As per notice ... Delhi High Court has laid down guidelines, inter-alia. that where the ITA 62, 230/CHD/2024 & S.A.11/CHD/2024 A.Y.2018-19 35 reasons to believe escapement of income make a reference to another document, whether as a lettr or a report, such document and/or relevant portion of such report should be enclosed alongwith