“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

The Mehsana Urban Co. Operative Bank Ltd., Mehsana vs. The ACIT, Mehsana Circle, Mehsana

In the result, the appeal of the assessee in ITANo

ITA 144/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad15 Feb 2024AY 2012-13

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, ARFor Respondent: Shri Sanjay Jain, Sr.DR

Section 143(3)Section 147Section 148Section 250(6)

claimed not net while calculating its provision for bad and doubtful debts. Thus, as rightly pointed out by the ld.counsel for the assessee, escapement of income as per the AO was attributable to the incorrect calculation of bad and doubtful debts. The facts, for the said purpose, of the amount

Tarun Tolaram Kapoor, Mumbai vs. Assistant Commissioner of Income Tax (OSD) Ward-26(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3395/MUM/2023[2008-09]Status: DisposedITAT Mumbai14 Feb 2024AY 2008-09

Bench: Shri Br Baskaran, Am & Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.3395/Mum/2023 (निर्धारण वर्ा / Assessment Years: 2008-09) Tarun Tolaram Kapoor बिधम/ Acit (Osc) 4/9, Vivekanand Society, Room No. 609, 6Th Floor, Vs. Th Kataria Marg, Mahim Kamaladevi Mittal (W), Mumbai – 400016. Ayurvedic Hospital Bldg, Charni Road (W), Mumbai – 400 002. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabpk3828M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Siddhesh Chaugule Revenue By: Shri P.D Chougule (Addl. Cit), Sr. Dr सुनवाई की तारीख / Date Of Hearing: 07/02/2024 घोषणा की तारीख /Date Of Pronouncement: 14/02/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) -57, Mumbai, Dated 28.07.2023 For Ay. 2011-12. 2. The Assessee Has Challenged The Validity Of The Reopening By Ao (Jurisdiction) U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”). So The Legal Issue Is Taken Up First.

For Appellant: Shri Siddhesh ChauguleFor Respondent: Shri P.D Chougule (Addl. CIT), Sr. DR

Section 147Section 148Section 3

that before reopening an assessment the AO has to record the reasons wherein he has to spell out the “Reasons to believe, escapement of income”. It is well settled that “Reasons to believe” postulate foundation based on information and belief based on reason. After a foundation based on information ... assessment because as per section 3 A.Y. 2008-09 Tarun Tolaram Kapoor 147 of the Act, AO should have “Reasons to believe”, escapement of income” and not Reasons to suspect escapement of income. Therefore, when AO receives adverse information against an assessee, he should make preliminary inquiry and collect material

Jayantilal Keshavji Chheda, Vile Parle East vs. Income Tax Officer, Ward 25(2)(4), Mumbai, Bandra Kurla Complex

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

ITA 2891/MUM/2023[2009-2010]Status: DisposedITAT Mumbai13 Feb 2024AY 2009-2010

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Jayantilal Keshavji Chheda Income Tax Officer Shop No. 1, Vireshwar Krupa, Ward 25(2)(4) Tejpal Road, Vile Parle (E), Vs. Mumbai Mumbai – 400 057

For Respondent: Shri Surendra Kumar Meena

Section 143(3)Section 148Section 250

expenses’ against interest on capital and remuneration from the partnership firm which according to the ld. A.O. has resulted in the escapement of income. The ld. AR further stated that even during the original assessment proceeding, the details of the said expenses were furnished by the assessee where the assessee ... capital and remuneration on firm partnership firm. In the absence of proper details of expenses, prima faice the allowance of expenses resulte in escapement of income to the extent of Rs.19,22,854/-. 4 Jayantilal Keshavji Chheda vs. ITO In the circumstances, I have reason to believe that the income

P.L. Goenka HUF, Kolkata vs. ITO, Ward 29/4, Kolkata

In the result, appeal of the assessee is allowed

ITA 412/KOL/2023[2013-14]Status: DisposedITAT Kolkata09 Feb 2024AY 2013-14

Bench: Shri Rajpal Yadav, Hon’Ble & Dr. Manish Borad, Hon’Ble

For Appellant: Shri K.M. Roy, C.AFor Respondent: Shri Gautam Patra, Addl. CIT, D/R

Section 143(1)Section 147Section 250

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. The above procedure be brought to the notice ... India, the LTCG claim is bogus; and the AO while recording the reason concluded that by doing the said transaction there was an escapement of income of Rs. 5,55,624/- whereas when the assessment order was framed the AO has found that assessee has made LTCG

Smt. Nirmala Venkatapathy, Madurai vs. ITO, Ward - II (1), Madurai

Accordingly, all the grounds taken by the appellant are dismissed

ITA 2492/CHNY/2019[2010-11]Status: DisposedITAT Chennai09 Feb 2024AY 2010-11

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.: 2492/Chny/2019 िनधा"रण वष"/Assessment Year: 2010-11 Late Smt. Nirmala The Income Tax Officer, Venkatapathy, Vs. Ward Ii(1), Rep. By Legal Heir, Smt. Uma Madurai. Venkatachalam No.12, Jawahar Road, Chockkikulam, Madurai – 625 002. Pan: Agcpn 9068P (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri N.Arjun Raj, Ca (Amicus Curie) ""यथ" क" ओर से/Respondent By : Shri R. Clement Ramesh Kumar, Cit सुनवाई क" तारीख/Date Of Hearing : 06.02.2024 घोषणा क" तारीख/Date Of Pronouncement : 09.02.2024 आदेश /O R D E R Per Mahavir Singh: This Appeal By The Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Appeals)-2, Madurai In Ita No.010/2013-14 Dated 08.08.2019. The Assessment Was Framed By The Income Tax Officer, Ward-Ii(1), Madurai For The Assessment Year 2010-11 U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’) Vide Order Dated 14.03.2013. 2. The First Issue On Merits Is As Regards To Assessment Of Capital Gains.

For Appellant: Shri N.Arjun Raj, CA (Amicus Curie)For Respondent: Shri R. Clement Ramesh Kumar, CIT

Section 142ASection 143(3)Section 147Section 148

reasons by assuming jurisdiction u/s.147 of the Act on account of inflation of cost of acquisition which resulted in capital loss and accordingly, escapement of income. According to AO, the fair market value of this land as on 01.04.1981 is @ Rs.14.6 per sq.ft., and the cost of acquisition

H S Impex Pvt Ltd, New Delhi vs. DCIT Circle-11(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 149/DEL/2021[2009-10]Status: DisposedITAT Delhi09 Feb 2024AY 2009-10

Bench: Shri Saktijit Dey & Shri Pradip Kumar Kedia

For Appellant: Shri Pranav Yadav, AdvFor Respondent: Shri Vivek Kumar Upadhyay, Sr.DR

Section 143(1)Section 143(3)Section 147Section 148Section 68

have reason to believe that the income of the assessee company amounting to Rs. 1,26,88,804/- has escaped assessment. The escapement of income has been clearly on account of failure on the part of the assessee company to truly and fully disclosure of all material facts necessary ... have reason to believe that the income of the assessee company amounting to Rs. 1,76,90,491/ - has escaped assessment. The escapement of income has been clearly on account of failure on the part of the assessee company to truly and fully disclosure of all material facts necessary

H S Impex Pvt Ltd, New Delhi vs. DCIT Circle-11(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 148/DEL/2021[2010-11]Status: DisposedITAT Delhi09 Feb 2024AY 2010-11

Bench: Shri Saktijit Dey & Shri Pradip Kumar Kedia

For Appellant: Shri Pranav Yadav, AdvFor Respondent: Shri Vivek Kumar Upadhyay, Sr.DR

Section 143(1)Section 143(3)Section 147Section 148Section 68

Panel Commerce Pvt. Ltd., Kolkata vs. ITO, Ward-4(1), Kolkata.

In the result, the appeal of the assessee is allowed

ITA 1116/KOL/2023[2013-14]Status: DisposedITAT Kolkata08 Feb 2024AY 2013-14

Bench: Dr. Manish Borad & Shri Sonjoy Sarma]

Section 133(6)Section 133ASection 142(1)Section 143(2)Section 143(3)Section 147Section 148

Panel Commerce Pvt. Ltd. case reopening was not valid. Accordingly, there was no plea whatsoever by the assessing officer that there was escapement of income. The ld. AO has not independently made up his mind in order to make assessment u/s 148 of the Act. The ld. AR further pointed

Lovely Promoters Private Limited, Kolkata vs. ACIT, Central Circle, Ajmer

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

ITA 770/JPR/2023[2013-14]Status: DisposedITAT Jaipur08 Feb 2024AY 2013-14

Bench: him regarding non mentioning of Document Identification Number (DIN) in the body of the order u/s. 127 of the Act dated 08-09-2021 and various other technical pleas raised in grounds of appeal regarding validity of notice u/s. 148 of the Act, thereby appellate order passed by the CIT(A) is non-speaking order and deserves to be quashed. 4. On the facts and in circumstances of the case and in law, the AO erred in issuing notice u/s. 148 of the Act as it was a search related case u/s. 132 r/w

For Appellant: Shri Mayank Taparia (Adv.)For Respondent: Shri A.S. Nehra (Addl.CIT) a

Section 127Section 127(1)Section 132Section 147Section 148Section 148ASection 151Section 153C

section 147 (as it was there in the statutory provision on the date of recording of reason) invoked for the presumption of escapement of income. Clause (b) of explanation 2 of section 147 reads as under: “Explanation 2 .-- For the purposes of this section, the following shall also be deemed ... same set of facts. There should be some tangible material with the assessing officer to come to the conclusion that there is an escapement of income. There is no new material which has come in the possession of the A.O. indicating income escaping assessment. There is no independent enquiry done

Impel Forge & Allied Industries Ltd., Ludhiana vs. DCIT, CC-1, Ludhiana

In the result, appeal of the Assessee is partly allowed for statistical purposes

ITA 465/CHANDI/2019[2009-10]Status: DisposedITAT Chandigarh07 Feb 2024AY 2009-10

Bench: The Ld. Cit(A) Who Has Since Sustained The Said Addition. Against The Said Findings & Direction Of The Ld. Cit(A), The Assessee Is In Appeal Before Us.

For Appellant: Shri Sarabjit Garg, CAFor Respondent: Smt. Amanpreet Kaur, Sr. DR

Section 143(2)Section 143(3)Section 148Section 68

completed under section 143(3) dt. 24/12/2010. Thereafter, basis certain information received from DIT (Intelligence & Criminal Investigation), Chandigarh, the AO recorded reasons regarding escapement of income and notice under Section 148 was issued to the assessee on 29/03/2014. Thereafter, the order under section 143(3) r.w.s 147 was passed

Rajatgiri Oil Industries, Kolkata vs. ACIT, Cir-28/Kol, Kolkata

In the result, appeal of the assessee is dismissed

ITA 475/KOL/2023[2011-12]Status: DisposedITAT Kolkata07 Feb 2024AY 2011-12

Bench: Shri Sanjay Garg & Dr. Manish Borad

For Appellant: Shri Somnath Banerjee, AdvocateFor Respondent: Shri B. K. Singh, JCIT, Sr. DR

Section 143(1)Section 143(3)Section 147Section 148Section 154Section 22Section 32

Hence, assessee’s admission, with regards to the non offering of commission income, proved that the belief of the Ld. AO regarding escapement of Income on the commission income was correct. Ld. CIT(A) held that Ld. AO had enough material on record i.e. ITR of the appellant, completed assessment ... pending at the appellate stage. Thus, considering all these contentions and submissions, ld. CIT(A) held that belief of the AO regarding escapement of income was correct and he had enogh material on record viz., return of the assessee, assessment orders for AY 2010-11 and 2013-14, form 26AS

Bharat De vs. Hi Dagha, Thanevs.ITO Ward 3(1), Kalyan

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

ITA 3315/MUM/2023[2009-10]Status: DisposedITAT Mumbai07 Feb 2024AY 2009-10

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2009-10 & Assessment Year: 2010-11 Bharat Devshi Dagha, Ito, Ward 3(1), 3/13, Geet Govind Chs. Rani Mansion Manpada Road, Vs. Maharashtra-421301. Dombivli East-421 201. Pan No. Aarpd 9399 Q Appellant Respondent

For Appellant: Mr. Kalpesh Khatri, CAFor Respondent: Mr. Surendra Kumar Meena, Sr. DR

Section 147Section 148

conclusion. What is required is "reason to believe" but not the is required is "reason to believe" but not the established fact of escapement of income. At the stage of established fact of escapement of income. At the stage of established fact of escapement of income. At the stage ... which a reasonable person could have formed formed the the requisite requisite belief. belief. Whether Whether material material would would conclusively prove escapement of income is not the concern at conclusively prove escapement of income is not the concern at conclusively prove escapement of income is not the concern

Bharat De vs. Hi Dagha, Thanevs.ITO Ward 3(1), Kalyan

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

ITA 3314/MUM/2023[2010-11]Status: DisposedITAT Mumbai07 Feb 2024AY 2010-11

For Appellant: Mr. Kalpesh Khatri, CAFor Respondent: Mr. Surendra Kumar Meena, Sr. DR

Section 147Section 148

Nova Estates Pvt Ltd, New Delhi vs. ITO Ward - 18(4), New Delhi

In the result appeal of the assessee is dismissed

ITA 76/DEL/2021[2007-08]Status: DisposedITAT Delhi07 Feb 2024AY 2007-08

Bench: The Ld. Ao & Despite Such Scrutiny No Addition Was Made In The Original Assessment Proceedings.

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

before issuing notice u/s 147 of the Act made no independent inquiry so as to form an opinion about the escapement of income by the appellant. The reassessment proceedings initiated solely on the basis of the directions of the investigation wing, in a mechanical manner and without application of independent

Radhey Shyam Yadav, Jaipur vs. Income Tax Officer, Jaipur

In the result, the appeal of the assesee is allowed for statistical purposes

ITA 814/JPR/2023[2011-2012]Status: DisposedITAT Jaipur06 Feb 2024AY 2011-2012

For Appellant: Ms. Nargis Parveen, CAFor Respondent: Mrs. Monisha Choudhary, Addl CIT-DR

Section 139(1)Section 144Section 148Section 69

Incometax Act, 1961 for which Notice u/s 148 was issued to assessee on 23.03.2018 after recording reasons for escapement of income in writing after approval/sanction of the competent Authority, which was duly served upon the assessee. It is also noted from the assessment order that since the assessee

Shri Shivajirao R.Chavan, Ahmedabad vs. The Income Tax Officer, Ward-13(2), Ahmedabad

The appeals of the assessee are allowed

ITA 435/AHD/2005[1996-1997]Status: DisposedITAT Ahmedabad05 Feb 2024AY 1996-1997

Bench: Smt.Annapurna Gupta & Smt. Madhumita Roy

For Appellant: Shri Sakar Sharma, A.RFor Respondent: Ms. Saumya Pandey Jain, Sr.DR

Section 147Section 148Section 148(2)Section 250(6)Section 271(1)(c)

wished to challenge the validity of the assessment so framed on the following grounds: i) The reasons recorded of escapement of income for reopening the case of the assessee was one consolidated reason for all the years involved. There was no specific finding of escapement of income ... jurisdiction to assess income u/s 147 of the Act must be year specific. Law does not permit reopening basis a consolidated belief of escapement of income for several years together, particularly which does not specify AO’s belief of income escaping assessment for the different years concerned