“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

Gokul Fuelchem Private Limited, Mumbai vs. National Faceless Assement Centre, Delhi

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

ITA 187/MUM/2024[2015-16]Status: DisposedITAT Mumbai29 Jul 2024AY 2015-16

Bench: SHRI B.R. BASKARAN (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)

Section 144

that the client code modification done by the assessee’s broker cannot be a ground to believe that there had been any escapement of income. However, the Ld CIT(A) has also confirmed the disallowance primarily on the basis of report of the investigation wing. Since the transactions are supported

ACIT, Central Circle - 3 (3), Chennai vs. M/S Land Marvel Homes, Chennai

In the result, appeal filed by the Revenue is allowed

ITA 1055/CHNY/2022[2012-2013]Status: DisposedITAT Chennai26 Jul 2024AY 2012-2013

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 1055/Chny/2022 िनधा"रणवष" / Assessment Year: 2012-13 M/S. Land Marvel Homes, The Acit, V. 45-47, Old No. 22-23, Central Circle -3(3), 3Rd Floor, 1St Main Road, Chennai. Gandhi Nagar, Adyar, Chennai – 600 020. [Pan:Aabfl-4387-N] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/Appellant By : Shri. V. Nandakumar, Cit ""यथ"क"ओरसे/Respondent By : Shri. T. Banusekar, Advocate & Shri. Yeshwanth Kumar, Ca सुनवाई क" तारीख/Date Of Hearing : 06.06.2024 घोषणा क" तारीख/Date Of Pronouncement : 26.07.2024 आदेश /O R D E R

For Appellant: Shri. V. Nandakumar, CITFor Respondent: Shri. T. Banusekar, Advocate &

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

after 1st April, 1989, the Assessing Officer has power to reopen, provided there is tangible materialto 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 ... holding that in the absence of any tangible material available with the Assessing Officer to form the requisite belief regarding escapement of income, the reopening of the assessment made under section 143(1) is bad in law? 14. The Division Bench notes that the Supreme Court in the case

Hemant Chheda, Mumbai vs. ITO 29(1)(4), Mumbai

Appeal is partly allowed for statistical purposes

ITA 4383/MUM/2023[2010-11]Status: DisposedITAT Mumbai26 Jul 2024AY 2010-11

Bench: Ms. Kavitha Rajagopal (Jm) & Shri Omkareshwar Chidara (Am)

Section 131Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

material before him for the formation of that belief. A “reason to believe” is what is relevant, not an established fact of the escapement of income itself. Where the answer is affirmative, it is not appropriate for this Court to preempt an inquiry whatsoever by the Ld. AO, once

Asst. Commissioner of Income Tax, Central Circle-1(3), Hyderabad vs. Apurupa Infrastructure Private Limited, Hyderabad

In the result, appeal of Revenue is dismissed

ITA 7/HYD/2024[2014-15]Status: DisposedITAT Hyderabad25 Jul 2024AY 2014-15

Bench: Shri Laliet Kumar, Hon’Ble & Shri Madhusudan Sawdia

For Appellant: Shri Hari Agarwal, C.AFor Respondent: Shri Shakeer Ahamed

Section 153C

additions u/s 153C can only be made in the hands of the assessee if the seized documents show that there is an escapement of income mentioned in the said document which belongs to the assessee. In the present case, the seized document does not belong to the assessee and therefore

ACIT., Central Circle-1(3), Hyderabad vs. Tranquil Properties, Hydetrabad

In the result, appeal of Revenue is dismissed

ITA 6/HYD/2024[2014-15]Status: DisposedITAT Hyderabad25 Jul 2024AY 2014-15

Bench: Shri Laliet Kumar, Hon’Ble & Shri Madhusudan Sawdia

For Appellant: Shri Hari Agarwal, C.AFor Respondent: Shri Shakeer Ahamed

Section 153C

Syeda Mariam, Bangalore vs. Income-Tax Officer, Ward-3(1)(4), Bengaluru

In the result we accepted the legal issue and held that the assessment order dated 30

ITA 341/BANG/2024[2014-15]Status: DisposedITAT Bangalore25 Jul 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Syeda Mariam The Income Tax Officer No. 482, 14Th Main Ward - 3(1)(4) Koramangala 3Rd Block Vs. Bmtc Building, 80Ft. Road Bangalore 560034 6Th Block, Koramangala Pan – Aazpm2737P Bengaluru 560095 (Appellant) (Respondent) Assessee By: Shri Zain Ahmed Khan, Ca Revenue By: Shri V. Parithivel, Jcit-Dr Date Of Hearing: 18.06.2024 Date Of Pronouncement: 25.07.2024 O R D E R Per: Soundararajan K.,J.M. This Appeal Filed By The Assessee Challenges The Order Of The Cit(A)-11, Bengaluru Dated 28.12.2023 In Respect Of The Assessment Year (Ay) 2014-15. 2. The Brief Facts Of The Case Are That The Assessee Filed Her Return Of Income On 28.07.2014. Thereafter A Survey U/S. 133A Was Conducted At The Company M/S. Intact Developers P. Ltd., In Which The Assessee Is A Director & Based On The Survey It Was Found That The Assessee Had Lent Unsecured Loans To The Company & In Support Of The Unsecured Loans The Assessee Filed Confirmation Letters From The Company. Insofar As The Source For The Loan, The Assessee Submitted That She Got Capital Gain In Ays 2013-14 & 2014-15 & Out Of This She Offered Loans To The Company. The Ld. Assessing Officer (Ao) Verified The Details Filed By The Assessee & Came To The Conclusion That There

For Appellant: Shri Zain Ahmed Khan, CAFor Respondent: Shri V. Parithivel, JCIT-DR

Section 133ASection 139(1)Section 143(2)Section 144Section 148Section 54Section 548Section 54B

Assessing Officer (AO) verified the details filed by the assessee and came to the conclusion that there 2 Syeda Mariam is some escapement of income and issued a notice u/s. 148 of the Act on 06.02.2019, directing the assessee to file her return of income. The assessee had not responded

ACIT-2(1)(1), Mumbai vs. Kundan Jewellers, Mumbai

In the result, additional ground raised by the assessee is allowed and appeal filed by the Revenue is dismissed

ITA 4493/MUM/2023[2014-15]Status: DisposedITAT Mumbai25 Jul 2024AY 2014-15

Bench: Us Challenging The Validity Of Reopening U/S.147 On The Following Grounds:- “1.On The Facts & In The Circumstances Of The Case, The Commissioner Of Income-Tax (Appeals) Nfac Has Erred In Not Adjudicating The Ground Of The Assessee Challenging The Validity Of Reassessment, Which Is Time-Barred Considering The Provisions Of The Act. The Assessee Respectfully Submits That The Reassessment Made Is Time Barred & Therefore The Same Deserves To Be Quashed. 2 On The Facts & In The Circumstances Of The Case, The Cit (A) Has Erred In Not Adjudicating The Additional Ground Of Appeal Raised By The Assessee During The Course Of The Appeal Proceedings. The Assessee Respectfully Submits That The Issue Of Statutory Notices /S. 148 Of The Act By The Jurisdictional Assessing Officer Is In Violation Of The Provisions Of Section 151A Of The Act & The Notifications Issued Thereunder. Accordingly The Reassessment In Pursuance Of Such Notices Is Invalid & Deserves To Be Quashed.”

Section 115JSection 139(1)Section 143(1)Section 143(3)Section 147Section 148Section 151Section 151ASection 68

sale proceeds. Therefore, the cash deposits made in the bank account in the aforesaid bank is nothing but the undisclosed cash and escapement of income to that extent. 4 M/s. Kundan Jewellers In view of the above and on the basis of material available on records and on perusal

Joint Commossioner of Income-Tax(OSD), Corporate Circle-1(1), Chennai vs. Idfc Limited, Chennai

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

ITA 19/CHNY/2024[2009-10]Status: DisposedITAT Chennai24 Jul 2024AY 2009-10

Bench: Shri Mahavir Singh & Shri Jagadishआयकर अपील सं./Ita No.19/Chny/2024 िनधा9रण वष9 /Assessment Year: 2009-10

For Appellant: Shri M. Murali, CITFor Respondent: Shri Niraj Sheth, Advocate

Section 143(3)Section 147Section 148Section 36Section 36(1)Section 36(1)(viia)Section 36(1)(viiia)

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 live link with the formation of the belief. Our view gets support from the changes made to section

Joint Commissioner of Income-Tax(OSD), Corporate Circle-1(1), Chennai vs. Idfc Limited, Chennai

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

ITA 18/CHNY/2024[2008-09]Status: DisposedITAT Chennai24 Jul 2024AY 2008-09

Bench: Shri Mahavir Singh & Shri Jagadishआयकर अपील सं./Ita No.18/Chny/2024 िनधा9रण वष9 /Assessment Year: 2008-09

For Appellant: Shri M. Murali, CITFor Respondent: Shri Niraj Sheth, Advocate

Section 143(3)Section 147Section 148Section 14ASection 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 36(1)(viiia)

John Distilleries Pvt Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-1, Bangalore

ITA 983/BANG/2023[2012-13]Status: DisposedITAT Bangalore24 Jul 2024AY 2012-13

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri T.M. Shivakumar, Sr. A.RFor Respondent: Ms. Neera Malhotra

such disallowances in respect of matters which have reached finality in the original assessment and which arc not in the nature of any escapement of income within the meaning of Section 147. The learned Counsel for assessee pointed out that the original assessment was made Under Section

Shailesh K. Wadnere, Thane vs. Income Tax Officer, WD-2(2), Kalyan

Appeals are allowed for statistical purposes in

ITA 793/MUM/2024[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Omkareshwar Chidaraassessment Year: 2015-16 & Assessment Year: 2015-16

For Appellant: Shri Prakash Jhunjhunwala, A.RFor Respondent: Dr. Kishor Dhule, CIT D.R

Section 147Section 148Section 69

erred in confirming the validity of notice u/s 148, in absence of tangible material and without having reason to believe of escapement of income; 4.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition of Short term capital Shri Shailesh

Shailesh K. Wadnere, Thane vs. Income Tax Officer, WD-2(2), Kalyan

Appeals are allowed for statistical purposes in

ITA 738/MUM/2024[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Omkareshwar Chidaraassessment Year: 2015-16 & Assessment Year: 2015-16

For Appellant: Shri Prakash Jhunjhunwala, A.RFor Respondent: Dr. Kishor Dhule, CIT D.R

Section 147Section 148Section 69

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3491/MUM/2023[2014-15]Status: DisposedITAT Mumbai24 Jul 2024AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Deputy Commissioner of Income Tax Central Circle 16, Delhi vs. Umrao Hotels and Resorts Private Limited, Delhi

In the result, assessee’s appeal is allowed and the appeal preferred by the Revenue is dismissed

ITA 3045/DEL/2023[2018-19]Status: DisposedITAT Delhi24 Jul 2024AY 2018-19

Bench: Shri G. S. Pannu & Ms. Madhumita Royi.T.A. Nos. 2867 /Del/2023 (Assessment Year : 2018-19) Umrao Hotels & Resorts Vs. Acit Pvt. Ltd., The Umrao, Nh- Central Circle – 16 48, Vill Samalkha, Near Delhi Rajori Crossing, New Delhi – 110037 Pan: Aaacu 6777 D (Appellant) .. (Respondent) & I.T.A. Nos. 3045/Del/2023 (Assessment Year : 2018-19) Dcit Vs. Umrao Hotels & Resorts Central Circle – 16 Pvt. Ltd., The Umrao, Nh- Delhi-110055 48, Vill Samalkha, Near Rajori Crossing, New Delhi - 110037 Pan: Aaacu 6777 D

For Appellant: Shri S. C. Garg, C.AFor Respondent: Shri T. James Singson, CIT-D.R

Section 132Section 142(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 250

would qualify requirement of section 153C.” 16. In that particular judgment, at paragraph 20, the chart in respect of the amount of alleged escapement of income qua each Assessment Year separately commencing from 2014-15 to 2020-21 recorded in the satisfaction note under Section

Umrao Hotels and Resorts Pvt. Ltd., Delhi vs. ACIT, Central Circle-16, Delhi

In the result, assessee’s appeal is allowed and the appeal preferred by the Revenue is dismissed

ITA 2867/DEL/2023[2018-19]Status: DisposedITAT Delhi24 Jul 2024AY 2018-19

For Appellant: Shri S. C. Garg, C.AFor Respondent: Shri T. James Singson, CIT-D.R

Section 132Section 142(1)Section 143(2)Section 143(3)Section 153ASection 153CSection 250

Hero Motocorp Ltd (As Successor of Hero Investment P.Ltd), New Delhi vs. DCIT, Circle 11(1), New Delhi

The appeal is allowed

ITA 1053/DEL/2023[2011-12]Status: DisposedITAT Delhi24 Jul 2024AY 2011-12

Bench: Shri G.S. Pannu & Shri Anubhav Sharmaassessment Year: 2011-12

Section 143(3)

which the parties to this share sale transaction ‘may’ have acted upon, to ‘benefit’ the assessee was miserably insufficient to even indicate escapement of income. The same can be called ‘mere suspicion’ as there was no basis of this belief of escapement of income. The plea for recording reasons must

DCIT, Central Circle-1(3), Bengaluru vs. Coffee Day Global Limited, Bengaluru

ITA 791/BANG/2024[2018-19]Status: DisposedITAT Bangalore23 Jul 2024AY 2018-19

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Sri C. Ramesh, A.R

Section 1Section 132Section 143(3)Section 148Section 14ASection 153ASection 154Section 234B(3)Section 234D

other hand, ld. D.R. submitted that assessment was rightly reopened by invoking the provisions of section 147 of the Act as there was escapement of income due to wrong claim of disallowance u/s 14A of the Act. 10. We have heard the rival submissions and perused the materials available ... held that the final outcome of the proceedings is not Zit initial stage, what is required is 'reason to believe' but not established escapement of income. It further held chat "at the stage of issue of notice, question is whether there was relevant material pn which a reasonable person could