“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

Rajatgiri Oil Industries, Kolkata vs. ACIT, Kolkata

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

ITA 334/KOL/2023[2009-10]Status: DisposedITAT Kolkata05 Feb 2024AY 2009-10

Bench: Shri Sanjay Garg & Shri Girish Agrawal

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

Section 143(3)Section 147

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

DCIT, Circle 2(1)(1), Bangalore vs. Cicon Engineers Private Limited, Bangalore

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

ITA 973/BANG/2023[2017]Status: DisposedITAT Bangalore02 Feb 2024

Bench: SHRI GEORGE GEORGE K. (Vice President), SHRI CHANDRA POOJARI (Accountant Member)

For Appellant: Shri A.C. Raju, A.RFor Respondent: Shri Parithivel, D.R

Section 20Section 250

procedure is being consistently followed since inception of the company and the method is in compliance with accounting principles and there is no escapement of income. The assessee has further stated before NFAC that the AO has resorted to restrict the TDS on mobilization of advance for the first time

ACIT, New Delhi vs. M/S. Green Gem Estates Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 1732/DEL/2016[2011-12]Status: DisposedITAT Delhi01 Feb 2024AY 2011-12

Bench: Sh. Saktijit Dey & Sh. N. K. Billaiyaassessment Year: 2011-12 Acit Vs. Green Gem Estates Pvt. Ltd. R/O B- 4/43, 2Nd Floor, Central Circle -2 New Delhi Safdarjung Enclave, New Delhi – 110029 Pan No.Aaacg3209Q (Appellant) (Respondent) Appellant By Sh. Subhra Jyoti Chakraborty, Cit Dr Respondent By Sh. Somil Aggarwal, Advocate Sh. Deepesh Garg, Advocate Sh. Shrey Jain, Advocate Date Of Hearing: 01/02/2024 Date Of Pronouncement: 01/02/2024 Order Per N. K. Billaiya, Am:

Section 133Section 147Section 148Section 66Section 68

based on mere suspicion; the belief must not be vague and there must be material, having live nexus with the belief of escapement of income; the belief entertained must not be arbitrary or irrational and it must be reasonable and be based on reasons which are relevant and material; there ... reopened without the AO having made necessary enquiry before initiating of the assessment proceeding to arrive at his own independent satisfaction regarding the escapement of income". The appellant has cited quite a few judgments on this account and further reliance is placed on Commissioner of Income- tax-V v. Orient

Mandar Kulkurni, HUF, Vadodara vs. Income Tax Officer, Ward-1(2)(3), Vadodara

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

ITA 631/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Ms. Suchitra Kambleassessment Year: 2011-12

Section 143(3)Section 147Section 148Section 54

learned Commissioner (Appeals) II erred in confirming action of Assessing Officer II for reopening the assessment under Section 148 on the ground of escapement of income when the subject matter is a matter which was fully disclosed in return of income filed and partly allowed in the original assessment order

Assistant Commissioner of Income Tax Circle-2(4), Hyderabad vs. Vasudeva Realtors Private Limited, Hyderabad

In the result, the appeal of Revenue in ITA

ITA 728/HYD/2020[2011-12]Status: DisposedITAT Hyderabad31 Jan 2024AY 2011-12

Bench: Shri R.K. Panda & Shri Laliet Kumar

For Appellant: Shri Ravi Bharadawaj, C.AFor Respondent: Shri K. Madhusdan, CIT-DR

Section 132Section 143(1)Section 143(2)Section 143(3)Section 153A

case of CIT Vs. Abhisar Buildwell Pvt. Ltd. has held that in the absence of fresh incriminating material having direct link with escapement of income of the assessee, no addition can be made in the hands of assessee. In the present case, there is no fresh incriminating material found during

ACIT, Cir-1(2)(1), Mumbai vs. M/S. Cheryl Advisory Pvt Ltd., Mumbai

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

ITA 2063/MUM/2023[2013-14]Status: DisposedITAT Mumbai31 Jan 2024AY 2013-14

Bench: Shri Om Prakash Kant () & Shri Narender Kumar Choudhry () Assessment Year: 2013-14

For Appellant: Mr. Tanzil Padvekar, AdvFor Respondent: Mr. H.M. Bhatt, Sr. DR

Section 153C

recorded ‘reason to believe’ that tax department, he recorded ‘reason to believe’ that tax department, he recorded ‘reason to believe’ that income escaped assessment. income escaped assessment. 6.4.4 In view of above discussion, 6.4.4 In view of above discussion, we set aside the finding of the Ld. we set aside ... correct assessment as required for correct assessment of the assessee for A.Y 2013 of the assessee for A.Y 2013-14 resulting in escapement of income 14 resulting in escapement of income to the extent of Rs. 2. 77,92,5247 to the extent

G.J. Holding Pvt. Ltd., Ludhiana vs. ACIT, C-2, Ludhiana

In the result, the appeal of the assessee stands allowed

ITA 1171/CHANDI/2019[2011-12]Status: DisposedITAT Chandigarh30 Jan 2024AY 2011-12

Bench: Shri Sanjay Garg & Shri Vikram Singh Yadavआयकर अपील सं./ Ita No.1171/Chandi/2019 िनधा"रण वष" / Assessment Year : 2011-12 G.J. Holding Pvt. Ltd. बनाम Acit, Central Circle-Ii, Ludhiana C/O G.S. Auto International Limited, G.S. Estate, G.T. Road, Ludhiana. "थायी लेखा सं./Pan No: Aaacg6664K अपीलाथ"/Appellant ""यथ"/Respondent िनधा"रती क" ओर से/Assessee By : Shri P.K. Goel & Sunil Arora, C.As राज"व क" ओर से/ Revenue By : Smt. Amanpreet Kaur, Sr. Dr सुनवाई क" तारीख/Date Of Hearing : 18.12.2023 उदघोषणा क" तारीख/Date Of Pronouncement : 30.01.2024 आदेश/Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 04.07.2019 Of The Commissioner Of Income Tax (Appeals)-5, Ludhiana[Hereinafter Referred To As The ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). The Assessee In This Appeal Has Taken The Following 2. Grounds Of Appeal:

For Appellant: Shri P.K. Goel & Sunil Arora, C.AsFor Respondent: Smt. Amanpreet Kaur, Sr. DR

Section 132Section 133ASection 139Section 143(1)Section 147Section 148Section 250

Assessment Year : 2011-12 G.J. Holding Pvt. Ltd. Page 5 of 26 the income amounting to Rs. 259.40 Lacs 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 de furnish the all materials facts ... Assessing Officer has only noted that he has applied his mind to the facts of the case for formation of belief of escapement of income. However, relating to the factual details, the Assessing Officer has mentioned that all these were facts that would be checked during the reassessment proceedings. This

Smt. Supriya Gupta., Kolkata vs. ITO, WD-30(1), Kolkata

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

ITA 1273/KOL/2023[2009-10]Status: DisposedITAT Kolkata30 Jan 2024AY 2009-10

Bench: Shri Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 147Section 148Section 250Section 68

assessment was duly' completed under Section 143(3) of the Act without recording in the reasons to believe the vital fact that the escapement of income was on account of failure on part of the appellant assessee to disclose fully or truly all material facts. That reopening of completed assessment

Asif Khan, Kolkata vs. ITO, Ward-32(3), Kol, Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 1048/KOL/2023[2012-13]Status: HeardITAT Kolkata30 Jan 2024AY 2012-13

Bench: Shri Manish Borad&Shri Anikesh Banerjee]

Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 250Section 69A

itself would be sufficient to annual the notice of reopening the assessment. Besides, mere cash deposit in the bank account would not disclose escapement of income. The assessee might have deposited the cash out of his sale of capital asset, sale of property and sale of investment, agricultural income ... deposit was explained by the assessee in all stages of investigation. When the income is foundation on which he based his belief of escapement of income is absent, so AO’s usurpation of jurisdiction to reopen of assessment is legally untenable & so, null in the eyes

ITO Ward - 4, Rohtak vs. Surender Dalal, Rohtak

In the result, appeal of the Assessee is partly allowed as

ITA 7714/DEL/2019[2009-10]Status: DisposedITAT Delhi30 Jan 2024AY 2009-10

Bench: Shri G.S. Pannu, Hon’Ble & Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A No.7714/Del/2019 िनधा"रणवष"/Assessment Year: 2009-10 बनाम Ito, Surender Dalal, Ward-4, Vs. Dalal Bhawan, Aayakar Bhawan, Rohtak, Haryana Near Petrol Pump, Gohana Road, Rohtak, Haryana. Pan No.Aqlps2166C अपीलाथ" Appellant ""यथ"/Respondent & आ.अ.सं/.I.T.A No.7490/Del/2019 िनधा"रणवष"/Assessment Year: 2009-10 बनाम Surender Dalal, Ito, Dalal Bhawan, Vs. Ward-4, Near Petrol Pump, Aayakar Bhawan, Gohana Road, Rohtak, Haryana Rohtak, Haryana. Pan No.Aqlps2166C अपीलाथ" Appellant ""यथ"/Respondent

Section 147Section 148Section 151Section 69

details as to how the income more than 15 crores has escaped assessment. Nothing in the reasons specified as to how the escapement of income has been arrived at more than 15 crores. There is no live link between the reasons recorded and the materials on record when the reasons ... even given the details of report which is the basis for reopening of assessment to believe that there is escapement of income of more than 15 crores. Apparent from factual inconsistencies in the reasons recorded there is no live link between the materials and the belief of the AO that

Surender Dalal, Rohtak vs. ITO Ward - 4, Rohtak

In the result, appeal of the Assessee is partly allowed as

ITA 7490/DEL/2019[2009-10]Status: DisposedITAT Delhi30 Jan 2024AY 2009-10

Section 147Section 148Section 151Section 69

Nikunj Kaushik Shah, Mumbai vs. ITO Ward-32(1), Mumbai

Appeal of the assessee is allowed on merits

ITA 2919/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Jan 2024AY 2011-12

Bench: Shri Aby T. Varkey & Shri Gagan Goyalnikunj Kaushik Shah, 201, Laxmi Palace Chsl, Vileparle (East), Mumbai- 400057, Pan: Apeps6446R ...... Appellant Vs. Ito-32(1), R. No. 335, Kautilya Bhavan, Bkc, Bandra (E) Mumbai- 400051 ..... Respondent

For Appellant: Shri Rajesh Kothari, Ld. ARFor Respondent: Shri Ashok Kumar Ambastha, Ld. DR

Section 10(38)Section 143(1)Section 147Section 148Section 149(1)(b)Section 250Section 68Section 69C

shares of Vas Infrastructure Ltd. without verifying the correctness of the information or without even establishing any link between information received and escapement of income chargeable to tax. 9) The Ld. AO erred in reopening the assessment under section 147 of the Income tax Act, 1961 (the Act) without having

Ashokkumar Manmal Bhansalihvi, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle 3(2), Ahmedabad

In the result, the appeal of the assessee is allowed in above terms

ITA 709/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad24 Jan 2024AY 2011-12

Bench: Smt.Annapurna Guptaasstt.Year :2011-12 Ashokkumar Manmal Bhanasali Acit, Cir.3(2) 508-B, Gidc Indl Estate Vs Ahmedabad. Mehmadabad Road Vatva, Ahmedabad. Pan : Abxpb 1343 H

For Appellant: Shri Kishan Mehta, AR

Section 147Section 250(6)

ld.DR however stated that there was sufficient information in the possession of the AO for formation of belief of escapement of income. 6. Having heard both the parties, and having gone through the reasons for reopening the case of the assessee for the impugned 4 year, copy of which ... assessee that there was no nexus between the information in the possession of the AO and the formation of belief of escapement of income. As is evident from the bare reading of the reasons, the information in the possession of the AO was that the assessee had paid Rs.10 lakhs

Spiritual Impressions Pvt Ltd., Mumbai vs. Dy CIT 15 (3)(2), Mumbai

In the result, the appeal of assessee is partly allowed

ITA 7074/MUM/2019[2011-12]Status: DisposedITAT Mumbai24 Jan 2024AY 2011-12

Bench: Shri Narender Kumar Choudhry, Jm & Ms Padmavathy S, Am

For Appellant: Shri V.G. Ginde a/w Shri KumarFor Respondent: Shri P.D. Chougule, Sr. DR

Section 131Section 132(4)Section 143(1)Section 143(3)Section 147Section 148Section 250Section 68

opened the assessment based on information contained the report of DDIT (Inv.) and has a reasonable believe that there is escapement of income. Accordingly, the Spiritual Impressions Pvt. Ltd. CIT(A) dismissed the contentions of the assessee. On merits, the CIT(A) upheld the addition made

Vayoo Nandan Finance Company Pvt Ltd, New Delhi vs. ITO Ward 26(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3097/DEL/2019[2009-10]Status: DisposedITAT Delhi23 Jan 2024AY 2009-10

Bench: Shri M. Balaganeshm/S. Vayoo Nandan Finance Vs. Ito, Company Pvt. Ltd, Ward-26(2), B-6, Ganpati Apartment, 6, New Delhi Alipur Road, Civil Lines, New Delhi Pan: Aaavc0737F Assessee By : Dr. Rakesh Gupta, Adv Shri Shrey Jain, Adv Revenue By: Ms. Kirti Sankratyayan, Sr. Dr Date Of Hearing 04/01/2024 Date Of Pronouncement 23/01/2024

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Ms. Kirti Sankratyayan, Sr. DR

Section 143(1)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

Bcp V Singapore Fvci Pte Ltd., Singapore vs. ACIT Circle Int Tax 1(1)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 449/DEL/2023[2017-18]Status: DisposedITAT Delhi17 Jan 2024AY 2017-18

Bench: Dr. B. R. R. Kumarms. Astha Chandra

For Appellant: Sh. Porus Kaka, Sr. AdvFor Respondent: Sh. Vizay B. Vasanta, Sr. DR

Section 148Section 234ASection 234BSection 270A

existence of cogent material that would lead a person of normal prudence, acting reasonably, to an honest belief as to the escapement of income from assessment." It is also pertinent to mention that on similar lines, in the case of CIT v. Nova Promoters & Finlease ... been duly offered to tax. 7 BCP V Singapore FVCI Pte. Ltd. 6. Hence it can be concluded that there was no escapement of income during the year and hence, the notice issued u/s. 148 is considered to be void ab initio and consequently the assessment is treated as nullity

Aep Investments (Mauritius) Limited, Mauritius vs. ACIT Circle Intl. Taxation 1(1)(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 2164/DEL/2023[AY 2017-18]Status: DisposedITAT Delhi17 Jan 2024

Bench: Shri Kul Bharat & Dr. B. R. R. Kumar

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. Vizay B. Vasanta, Sr. DR

Section 144Section 144CSection 147Section 234ASection 234BSection 270ASection 271F

existence of cogent material that would lead a person of normal prudence, acting reasonably, to an honest belief as to the escapement of income from assessment." It is also pertinent to mention that on similar lines, in the case of CIT v. Nova Promoters & Finlease ... information pertaining to the remittances. 10. From the above reasons nothing could be deciphered has to how the AO come to conclusion of escapement of income. The case has been reopened just because of assessee made remittances which is from the sale of investments made by the assessee. Though

Kerala State Financial Enterprises Limited, Thrissur vs. DCIT Circle 1(1) & Tps, Thrissur

In the result, the assessee’s appeal is dismissed

ITA 933/COCH/2022[2017-18]Status: DisposedITAT Cochin16 Jan 2024AY 2017-18

Bench: Shri Sanjay Arora & Shri Manomohan Daskerala State Financial Dy. Cit, Circle - 1(1) & Tps Enterprises Ltd. Thrissur Bhadratha, Museum Road Vs. Chembukkavu - 680020 Thrissur [Pan:Aabct3817A] (Appellant) (Respondent)

For Appellant: Shri Harikrishnanunny, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR

Section 143(3)Section 36(1)(vii)

consequently, there is no merit in the contention that, if the assessee succeeds, then it would result in escapement of income from assessment.” (pg. 173) Reference here may profitably also be made to the decision in Catholic Syrian Bank Ltd. v. CIT [2012] 343 ITR 270 (SC), wherein

Phool Chand Gupta(HUF), 1/90 Vidhyadhar Nagar vs. ITO, WD-4(2), Jaipur

The appeal of the assessee is partly allowed

ITA 393/JPR/2023[2014-15]Status: DisposedITAT Jaipur16 Jan 2024AY 2014-15

Bench: The Hearing Of Appeal.”

For Appellant: Shri P.C. Jain (C.A.)

Section 142(1)Section 143(2)Section 147Section 148Section 56(2)(vii)

land at Rs. 36,39,655/- and charged stamp duty accordingly. In view of existing provisions of section 56(2)(vii)(b) escapement of income to the tune of Rs. 15,39,655/- was noticed and after having belief of escapement of income, recording reasons for the same and obtaining ... drawbacks in their valuation therefore there valuation is not correct and does not show correct market value. These difference does not show any escapement of income because all these shows deemed difference for which provisions of section 147 is not applicable. We have not paid any amount over and above

I.T.O., Ward-43(2), Kolkata vs. Champalal Omprakash, Kolkata

ITA 1546/KOL/2019[2011-12]Status: DisposedITAT Kolkata15 Jan 2024AY 2011-12

Bench: Shri Sanjay Garg, Judical Member & Dr. Manish Boradi.T.A. Nos.1168&1169/Kol/2019 Assessment Years: 2010-11 & 2011-12 Champalal Omprakash......................................................................Appellant 49, Madan Mohan Burman Street, Kolkata-700007. [Pan:Aabfc8279L] Vs. Ito, Ward-43(2), Kolkata................................................................Respondent I.T.A. Nos.1545&1546/Kol/2019 Assessment Years: 2010-11 & 2011-12 Ito, Ward-43(2), Kolkata................................................................ Respondent Vs. Champalal Omprakash..........................................................................Appellant 49, Madan Mohan Burman Street, Kolkata-700007. [Pan:Aabfc8279L] Appearances By: Shri J. P. Khaitan, Sr. Counsel, Appeared On Behalf Of The Appellant. Shri P. P. Barman, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 13, 2023 Date Of Pronouncing The Order : January 15, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Are Cross-Appeals Preferred By The Assessee As Well As By The Department Against The Impugned Common Order Dated 19.03.2019 Of The Commissioner Of Income Tax (Appeals)-13, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). Since Common Issues Involved

Section 131Section 250

reopen the assessment exclusively vests with the Assessing Officer only. It is the Assessing Officer who has to form the belief of escapement of income of the assessee and it is the Assessing Officer who has to decide the objections against the reopening of the assessment and further to give