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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

Narmada Concast Private Limited, Bhavnagar vs. The Dy. Commissioner of Income Tax, Central Circle-1(1), Ahmedabad

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

ITA 33/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad03 Jan 2024AY 2013-14

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143(3)Section 148

dated 11.01.2022. 2.1. The assessee filed its objection that the reasons recorded for reopening are absolutely vague, scanty and non-specific and no escapement of income chargeable to tax emanates from the “reasons recorded” and therefore the reopening itself is unjustified. Further there were no details as to the nature ... live like' in respect of the information received in this case with regard to assessee's involvement in bogus accommodation entries and escapement of income for the year under consideration. 4. Enquiries made by the AO as sequel to information collected/received: The financial analysis of such paper/shell companies of Banka

Safal Hospitality and Maintanance Service, Ahmedabad vs. The DCIT, Circle-3(1)(2), Ahmedabad

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

ITA 76/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad03 Jan 2024AY 2015-16

Bench: Ms. Suchitra Kamble (Judicial Member)

For Appellant: Shri Vipul Khandhar, A.RFor Respondent: Ms. Saumya Pandey Jain, Sr. D.R
Section 143(3)Section 2Section 2(24)Section 28Section 36(1)Section 36(1)(va)Section 43Section 438

received from employee’s contribution towards Provident Fund and ESIC in relevant fund on or before due date. So, there was always escapement of income exceeding Rs. 10,00,000/-. After taking cognizance of the assessee’s reply, the Assessing Officer made addition of Rs. 14,73,079/- in respect

M/S Creative World Telefilms Ltd., Mumbai vs. Dy. CIT Central Circle-6(4), Mumbai

ITA 1651/MUM/2019[2010-11]Status: DisposedITAT Mumbai03 Jan 2024AY 2010-11
Section 124Section 127Section 129Section 143(3)Section 147Section 148Section 151Section 68

ITA No.1651/Mum/2019 M/s. Creative World Telefilms Ltd 2. In the original grounds of appeal, assessee has raised following grounds:- “1

Aditi Enterprises P Ltd, Indore vs. The ACIT, Central Circle-2, Indore

ITA 434/IND/2022[2015-16]Status: DisposedITAT Indore02 Jan 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2015-16 Aditi Enterprises Private Acit, Ltd., Central Circle -2, बनाम/ 264, Indore. Shreenagar Extension, Vs. Indore (Assessee / Appellant) (Revenue / Respondent) Pan: Aacca5139R Assessee By Ms. Shreya Jain & Vibha Tiwari, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.10.2023 Date Of Pronouncement 02.01.2024

Section 143(1)Section 147Section 148Section 151Section 234BSection 234DSection 69C

believe, based on such information shared by SEBI and Investigation Wing, that the assessee has declared bogus loss which has resulted in escapement of income. Ld. DR submitted that the AO’s action cannot be said to be faulty in the situation. Therefore, his action must be upheld ... from Investigation Wing but after receiving such information, applied his own mind and made a reason to believe that there was escapement of income. Needless to mention that there is no legal bar in receiving information from Investigation Wing. Now we are left with third and last contention. Precisely

Krishna Devi, New Delhi vs. ITO Ward 43(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1547/DEL/2023[2011-12]Status: DisposedITAT Delhi02 Jan 2024AY 2011-12

Bench: Shri Pradip Kumar Kedia

For Appellant: Shri V.K. Sabharwal, AdvFor Respondent: Ms. Kirti Sankratyayan, Sr.DR
Section 139Section 143(2)Section 143(3)Section 144Section 147Section 148Section 148(2)

submit that the AO was duly informed about the filing of the return and existence thereof and consequently the reasons recorded alleging escapement of income on the ground that no returns were filed is without any factual foundation. The allegation of escapement based on such incorrect factual foundation is unsustainable

Leelaben Kantilal Parekh, Mumbai vs. Income Tax Officer Ward 20(2)(1), Piramal Chamber, Mumbai

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

ITA 2926/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Dec 2023AY 2011-12

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Piyush Chhajed a/wFor Respondent: Shri Nagnath B. Pasale
Section 133(6)Section 147Section 148Section 151Section 151(2)Section 250Section 69C

paragraph, relevant details about the alleged bogus transaction of the assessee were identified. In the last paragraph, the AO has clearly identified the escapement of income, and the satisfaction of the AO is recorded. Thus, there was a “tangible material” on the basis of which the AO applied his mind

Dr Batras Positive Health Clinic Private Limited, Mumbai vs. CIT(A), National Faceless Appeal Centre

In the result, all the appeals of the assessee

ITA 2748/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Dec 2023AY 2011-12

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Ita Nos. 2748, 2747 & 2761/Mum/2023 Assessment Year: 2011-12, 2012-13 & 2013-14 Dr Batras Positive Health Clinic Cit(A), National Faceless Pvt. Ltd., Appeal Centre, Delhi. 2Nd Floor, H Kantilal Compound, Vs. Andheri Kurla Road, Sakinaka Andheri East-400072 Pan No. Aabcd 3857 G Appellant Respondent

For Appellant: Mr. Yogesh A. Thar, Mr. ChaitanyaFor Respondent: Mr. Ashok Kumar Ambastha, Sr
Section 143(2)Section 147Section 16(2)

quantum of escapement of Assessing Officer has also specified the quantum of escapement of Assessing Officer has also specified the quantum of escapement of income in relation to both the issues. Therefore the allegations of income in relation to both the issues. Therefore the income in relation to both ... ordinary prudence ‘Reasons’ should be such that any person of ordinary prudence should be in a position to make a belief about escapement of income should be in a position to make a belief about escapement of income should be in a position to make a belief about escapement

Dr Batras Positive Health Clinic Private Limited, Mumbai vs. CIT(A), NFAC, National Faceless Appeal Centre

In the result, all the appeals of the assessee

ITA 2747/MUM/2023[AY 2012-13]Status: DisposedITAT Mumbai29 Dec 2023

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Ita Nos. 2748, 2747 & 2761/Mum/2023 Assessment Year: 2011-12, 2012-13 & 2013-14 Dr Batras Positive Health Clinic Cit(A), National Faceless Pvt. Ltd., Appeal Centre, Delhi. 2Nd Floor, H Kantilal Compound, Vs. Andheri Kurla Road, Sakinaka Andheri East-400072 Pan No. Aabcd 3857 G Appellant Respondent

For Appellant: Mr. Yogesh A. Thar, Mr. ChaitanyaFor Respondent: Mr. Ashok Kumar Ambastha, Sr
Section 143(2)Section 147Section 16(2)

quantum of escapement of Assessing Officer has also specified the quantum of escapement of Assessing Officer has also specified the quantum of escapement of income in relation to both the issues. Therefore the allegations of income in relation to both the issues. Therefore the income in relation to both ... ordinary prudence ‘Reasons’ should be such that any person of ordinary prudence should be in a position to make a belief about escapement of income should be in a position to make a belief about escapement of income should be in a position to make a belief about escapement

Shrifal Impex Private Limited, Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 250/SRT/2023[2014-15]Status: DisposedITAT Surat29 Dec 2023AY 2014-15

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita Nos.190 To 191/Srt/2023 Assessment Year: (2011-12 To 2012-13) (Physical Hearing) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent) आयकर अपील सं./Ita No.250/Srt/2023 Assessment Year: (2014-15) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent)

Section 143(3)Section 148

erred in issuing the notice u/s 148 without having valid reasons to ITA Nos. 190 - 191 &250/SRT/2023 Shrifal Impex Pvt. Ltd. believe of escapement of income, on the basis of change of opinion, on borrowed satisfaction and in absence of fresh tangible material, thereby the reassessment order ... condition precedent is reason to believe that income had escaped assessment but not establishment of the fact of actual escapement of income. Accordingly, while issuing notice u/s 148 of the Act, there should be evidence on record or specific information received from outside agencies or gathered

Shrifal Impex Pvt. Ltd., Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 191/SRT/2023[2012-13]Status: DisposedITAT Surat29 Dec 2023AY 2012-13

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita Nos.190 To 191/Srt/2023 Assessment Year: (2011-12 To 2012-13) (Physical Hearing) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent) आयकर अपील सं./Ita No.250/Srt/2023 Assessment Year: (2014-15) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent)

Section 143(3)Section 148

erred in issuing the notice u/s 148 without having valid reasons to ITA Nos. 190 - 191 &250/SRT/2023 Shrifal Impex Pvt. Ltd. believe of escapement of income, on the basis of change of opinion, on borrowed satisfaction and in absence of fresh tangible material, thereby the reassessment order ... condition precedent is reason to believe that income had escaped assessment but not establishment of the fact of actual escapement of income. Accordingly, while issuing notice u/s 148 of the Act, there should be evidence on record or specific information received from outside agencies or gathered

Shrifal Impex Pvt. Ltd., Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 190/SRT/2023[2011-12]Status: DisposedITAT Surat29 Dec 2023AY 2011-12

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita Nos.190 To 191/Srt/2023 Assessment Year: (2011-12 To 2012-13) (Physical Hearing) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent) आयकर अपील सं./Ita No.250/Srt/2023 Assessment Year: (2014-15) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent)

Section 143(3)Section 148

erred in issuing the notice u/s 148 without having valid reasons to ITA Nos. 190 - 191 &250/SRT/2023 Shrifal Impex Pvt. Ltd. believe of escapement of income, on the basis of change of opinion, on borrowed satisfaction and in absence of fresh tangible material, thereby the reassessment order ... condition precedent is reason to believe that income had escaped assessment but not establishment of the fact of actual escapement of income. Accordingly, while issuing notice u/s 148 of the Act, there should be evidence on record or specific information received from outside agencies or gathered

Shivalik Educational & Placement Services Pvt Ltd, Faridabad vs. ACIT Central Circle-13, New Delhi

In the result, the appeal of the assessee is allowed

ITA 3207/DEL/2019[2015-16]Status: DisposedITAT Delhi21 Dec 2023AY 2015-16

Bench: SHRI M. BALAGANESH (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 143(2)Section 143(3)Section 14ASection 234BSection 36Section 68Section 69C

course of assessment proceedings in 'limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then ... case for scrutiny. However, in revenue potential cases, it was further provided that 'Complete Scrutiny' could be conducted, if there was potential escapement of income above a prescribed monetary limit, subject to the approval of administrative Pr. CIT/CIT/Pr. DIT/DIT. 2. In order to ensure that maximum objectivity is maintained

Hcl Technologies Italy S.P.A, Italy vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 596/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Technologies Belgium Bvba, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 595/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Mexico S. De R L, Mexico vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 594/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Hongkong Sar Limited, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 593/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Technologies (Proprietary) Limited, New Delhi vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 567/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Technologies Bv, Netherlands vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 565/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Australia Services Pty Ltd, Australia vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 564/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered

Hcl Technologies Maylasia Sdn Bhd, Malaysia vs. ACIT Circle -2(1)(1) International Taxation, New Delhi

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

ITA 563/DEL/2021[2012-13]Status: DisposedITAT Delhi20 Dec 2023AY 2012-13

Bench: SHRI KUL BHARAT (Judicial Member), SHRI M. BALAGANESH (Accountant Member)

Section 144C(13)

erred in holding the reassessment proceedings as invalid on the ground that Explanation 2(a) to section 147 of the Act regarding deemed escapement of income is not applicable in absence of any income chargeable to tax. 3. HCL group entities operate as a consortium; services not rendered