“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

Varsha Shrikant Paranjape, Mumbai vs. Asstt. Commissioner of Income Tax - 25(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3252/MUM/2023[2011-12]Status: DisposedITAT Mumbai20 Oct 2023AY 2011-12

Bench: Shri Aby T Varkey & Shri Amarjit Singhvarsha Shrikant Vs. Acit, Circle 25(3) Paranjape, Paranjape C-10, 6Th Floor, Room No. Bungalow, 2Nd Floor, 34, 601, Pratyaksha Kar Mg Road, Vile Parle Bhavan, Bandra Kurla (East), Mumbai – 400057 Complex, Bandra (E) Mumbai – 51 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaapp6199H Appellant .. Respondent [ Appellant By : Ronak Doshi, Chaitanya Doshi & Karan Jain Respondent By : Vithal Machindra Bhosale Date Of Hearing 05.10.2023 Date Of Pronouncement 20.10.2023

For Appellant: Ronak DoshiFor Respondent: Vithal Machindra Bhosale

Section 147Section 148Section 234Section 234BSection 45(4)

completed u/s 143(3) of the Act on 24.03.2014. The assessee also submitted that AO had failed to prove that there was an escapement of income by failure on the part of the assessee to disclose fully and truly on material facts necessary for her assessment. We have perused ... relevant assessment is not valid. Further, the assessing officer could not establish that in the case of the assessee that how there is escapement of income as the same amount has already been assessed P a g e | 8 Varsha Shrikant Paranjape Vs. ACIT, Circle 25(3) in the case

Jumman Lal Yadav, Durg vs. ACIT-1(1), Bhilai

In the result, the appeal of the assessee being devoid and bereft of any merit is dismissed in terms of the aforesaid observations

ITA 290/RPR/2023[2011-12]Status: DisposedITAT Raipur19 Oct 2023AY 2011-12

Bench: Shri Ravish Soodआयकर अपील सं. / Ita No. 290/Rpr/2023 "नधा"रण वष" / Assessment Year : 2011-12 Jumman Lal Yadav Deep Chowk, Kusumkasa, Balod, Durg (C.G.)-491 228 Pan : Acmpy0168R .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax-1(1), Bhilai (C.G.)

For Appellant: NoneFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 119aSection 142(1)Section 144Section 147Section 148

facts and circumstances of the case and in law, the reasons recorded is invalid, it is not sufficient to believe for escapement of income, based on information of cash deposits into bank account; on fallacious assumption that the bank deposits constitute undisclosed income; more so when sources of cash deposits

M/S. Premji Valji & Sons (Jewellers) P. Ltd., Rajkot vs. The DCIT, Circle - 2 (1), Rajkot

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

ITA 258/RJT/2022[2011-12]Status: DisposedITAT Rajkot18 Oct 2023AY 2011-12

Bench: Shri Waseem Ahmed (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

For Appellant: Shri R.D. Lalchandani, A.RFor Respondent: Shri V.J. Boricha, Sr. D.R

Section 132Section 143(3)Section 147Section 148Section 250

case of the assessee dated 29th March 2013. Thereafter, the assessee was made subject to the escapement of income tax proceedings and hence the assessment was again framed u/s 143(3) r.w.s. 147 of the Act vide order dated I.T.A No. 258/Rjt/2022 A.Y. 2011-12 Page No 3 M/s. Premji

Nalini Parwani, Raipur vs. Income Tax Officer, Ward 3(1), Raipur

In the result, the appeal of the assessee is allowed in terms of the aforesaid observations

ITA 249/RPR/2023[2013-14]Status: DisposedITAT Raipur17 Oct 2023AY 2013-14

Bench: Shri Ravish Soodआयकर अपील सं. / Ita No. 249/Rpr/2023 "नधा"रण वष" / Assessment Year : 2013-14 Nalini Parwani C/O. G.K Automobiles P. Ltd. Opp. Kabir Nagar, Gate No.2. Ring Road-2, Sondongri, Raipur (C.G.)-492 001 Pan : Aeqpp5635N .......अपीलाथ" / Appellant बनाम / V/S. The Income Tax Officer, Ward-3(1), Raipur (C.G.)

For Appellant: Shri Rajesh Kumar Chawda, CAFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 143(3)Section 147Section 148Section 28Section 57

Hence, after 1st April, 1989, AO 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 ... exercises power of reassessment beyond the period of four years from the end of relevant assessment year, an essential requirement is that the escapement of income chargeable to tax is due to the failure on the part of the assessee to disclose truly and fully all material facts. This

Parminder Singh, Jind vs. ITO, Ward-2, Bhiwani

In the result, appeal of the assessee is allowed

ITA 1411/DEL/2022[2010-11]Status: DisposedITAT Delhi16 Oct 2023AY 2010-11

Bench: Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A No.1411/Del/2022 िनधा"रणवष"/Assessment Year: 2010-11 बनाम Parminder Singh Ito H.No.2748, Urban Estate, Vs. Ward-2, Jind, Haryana. Bhiwani. Pan No.Bckps3874B अपीलाथ" Appellant ""यथ"/Respondent

Section 133(6)Section 143(3)Section 147Section 148Section 151Section 68

information and any corroborative I.T.A.No.1411/Del/2022 evidence/material thereto and without connecting tangible material and the formation of the reasons to believe for escapement of income but only acted on the information while forming belief qua escapement of the income and initiation of proceedings u/s 147/148

Shri Arun Agrawal, Raipur vs. Assistant Commissioner of Income Tax-3(1), Raipur

In the result, the appeal of the assessee is allowed in terms of the aforesaid observations

ITA 214/RPR/2023[2010-11]Status: DisposedITAT Raipur16 Oct 2023AY 2010-11

Bench: Shri Ravish Soodआयकर अपील सं. / Ita No. 214/Rpr/2023 "नधा"रण वष" / Assessment Year : 2010-11 Shri Arun Agrawal 85, Pandri Textile Market, Raipur-492 001 (C.G.) Pan :Acjpa2323D .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax-3(1), Raipur (C.G.)

For Appellant: Shri Veekaas S. Sharma, CAFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 132Section 147Section 148Section 153CSection 69

escaped assessment. Before doing so, the AO is required should satisfy himself that, there is material which suggests that there is an escapement of income. 10 Shri Arun Agrawal Vs. ACIT-3(1), Raipur The AO can exercise these powers with a reasonable belief coupled with some material which suggest ... escapement of income. Once the conditions precedent for assumption of jurisdiction to commence the reassessment proceedings, he has to cross the hurdles attached with reassessment by way reasons for reopening of assessment, time limit for issue of notice and provision for obtaining sanction of higher authority in certain circumstances

Preeti Singhvi L/H Shri Ajay Singhvi, Jodhpur vs. ACIT, Circle-3, Jodhpur

In the result, the appeal of the assessee is dismissed

ITA 152/JODH/2023[2012-13]Status: DisposedITAT Jodhpur13 Oct 2023AY 2012-13

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: None (W/S)For Respondent: Ms. Nidhi Nair, JCIT-DR

Section 143(1)Section 143(3)Section 147Section 148Section 40A(3)

held that what is required at stage of issuing notice under section 148 is a reason to believe and not established fact of escapement of income and, therefore, looking to the scope of section 147 as also sections 148 to 152 even if scrutiny assessment has been undertaken, if substantial

Prabhakar Jha, Madhubani vs. Pr.CIT-1, Patna

In the result, the appeal of the assessee is allowed

ITA 178/PAT/2022[2017-18]Status: DisposedITAT Patna12 Oct 2023AY 2017-18

Bench: Shri Rajpal Yadav, Vice-(Kz) & Shri Rajesh Kumar

Section 143(2)Section 143(3)Section 263

setting aside the order. In the present case, he has to examine and recorded a finding as to how this contractual receipt goad escapement of income for which assessment order is to be termed as 10 Assessment Year: 2017-2018 Prabhakar Jha erroneous. We find no such efforts have been

Deputy Commissioner of Income Tax (Central-1), Raipur vs. M/S Sunil Sponge Pvt. Ltd., Raipur

In the result, the appeal of the revenue is dismissed in terms of our aforesaid observations

ITA 73/RPR/2022[2007-08]Status: DisposedITAT Raipur12 Oct 2023AY 2007-08

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.73/Rpr/2022 "नधा"रण वष" / Assessment Year : 2007-08 The Deputy Commissioner Of Income Tax, (Central Circle)-1, Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. Sunil Sponge Pvt. Ltd. H. No.11, Jalvihar Colony, Raipur (C.G.)-492 001 (C.G.) Pan : Aahcs7999A ……""यथ" / Respondent

For Appellant: S/shri, Sakshi Gopal Agrawal &For Respondent: Shri Choudhary N.C. Roy, Sr. DR

Section 143(3)Section 147Section 148Section 40A(2)(b)

justified in holding that the AO not having any fresh information/material in his possession, merely on assumption formed his belief about escapement of income ignoring the fact that the assessee has not disclosed fully and truly material facts during original assessment proceedings and has suppressed its sales ... 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 will:411e formation. of the belief" 8. In the present facts, we note that the Assessing Officer

Dappled Paper Industries (P) Ltd, New Delhi vs. ACIT Circle-7(1), New Delhiq

ITA 9146/DEL/2019[2011-12]Status: DisposedITAT Delhi10 Oct 2023AY 2011-12

Bench: Sh. Shamim Yahya & Sh. Anubhav Sharmaita No. 9146/Del/2019, A.Y. 2011-12 M/S. Dappled Paper Vs. Acit, Industries Pvt. Ltd. Circle 7(1), 206, Hans Bhawan 1 Bsz New Delhi Marg New Delhi-110002 Pan : Aabcd5741R (Appellant) (Respondent)

Section 143(1)Section 147Section 148Section 50

where the initiation of proceedings is itself bad in law a) There is no reason to believe and there is no escapement of income. b) Completely wrong irrelevant and non existing reasons. c) Notice u/s 148 issued only for the purpose of verification. d) Mandatory procedure laid down

Aruna Garg, Ghaziabad vs. ACIT Circle-1, Ghaziabad

In the result, the appeal of the assessee is allowed

ITA 1622/DEL/2020[2009-10]Status: DisposedITAT Delhi06 Oct 2023AY 2009-10

Bench: Shri Challa Nagendra Prasad & Shri Pradip Kumar Kedia

For Appellant: Shri Deepanshu Agarwal, CAFor Respondent: Shri Kanv Bali, Sr.DR

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

descript reasons. No reference to any material providing foundation for holding so called belief is available. 8. Needless to say, the allegation towards escapement of income must be backed by expression ‘reasons to believe’ and such belief requires to be based on some credible or relevant material. A concluded assessment ... complete disarray. Mere reiteration of statutory language employed in Section 147 of the Act that the Assessing Officer has ‘reason to believe’ towards escapement of income is not, by itself, adequate. The instances of transactions resulting in loss/profit to the assessee on account of client code modification do not feature

ACIT(OSD), Ward-22(1), New Delhi vs. S.S. Gas Lab Asia P. Ltd., Delhi

In the result, cross objection of the assessee is allowed and appeal of the revenue is dismissed

ITA 3246/DEL/2019[2008-09]Status: DisposedITAT Delhi05 Oct 2023AY 2008-09

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaacit(Osd), Vs. S. S. Gas Lab Asia P. Ltd, Ward-22(1), A-6/3, Jhilmil Industrial Area, New Delhi Shahdara, Delhi (Appellant) (Respondent) Pan: Aakcs1928C Co No. 54/Del/2023 (In Ita No. 3246/Del/2019) (Assessment Year: 2008-09) Acit(Osd), Vs. S. S. Gas Lab Asia P. Ltd, Ward-22(1), A-6/3, Jhilmil Industrial Area, New Delhi Shahdara, Delhi (Appellant) (Respondent) Pan: Aakcs1928C Assessee By : Shri Sanjay Kumar Bindal, Ca Revenue By: Shri Anuj Garg, Sr. Dr Date Of Hearing 03/10/2023 Date Of Pronouncement 05/10/2023 O R D E R Per M. Balaganesh, A. M.: 1. The Appeal In Ita No. 3246/Del/2019 Filed By The Revenue & Co No. 54/Del/2023 387/Del/2021 Filed By The Assessee For Ay 2008-09, Arises Out Of The Order Of The Commissioner Of Income Tax (Appeals)-8, New Delhi [Hereinafter Referred To As „Ld. Cit(A)‟, In Short] In Appeal No. 10208/16-17 Dated 08.02.2019 Against The Order Of Assessment Passed U/S 147/143(3) Of The Income-Tax Act, 1961 (Hereinafter Referred To As „The Act‟) Dated 09.03.2016 By The Assessing Officer, Ito, Ward-22(1), New Delhi (Hereinafter Referred To As „Ld. Ao‟).

For Appellant: Shri Sanjay Kumar Bindal, CAFor Respondent: Shri Anuj Garg, Sr. DR

Section 10BSection 139(1)Section 139(5)Section 143(3)Section 147Section 148

issued merely on change of opinion on the same set of facts without any fresh tangible material to show any escapement of income; and d) the original assessment was completed u/s 143(3) of the Act and the case was reopened after more than four years without recording any reason

Rajkot Trading Corporation, Rajkot vs. The ITO Ward-3 (1) (2), Rajkot

The appeal of the assessee is allowed in above terms

ITA 55/RJT/2022[2011-12]Status: DisposedITAT Rajkot03 Oct 2023AY 2011-12

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumar(Through Web-Based Video Conferencing Platform) िनधा"रणवष"/Assessment Year: 2011-12 Rajkot Trading Corporation, Vs. The Income-Tax Officer, 13, Kailashpati Society, Ward 3(1)(2), Dhebar Road (South), Rajkot Rajkot -360002 Pan : Aacfr 5966 L अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri D.M. Rindani, Ar Revenue By : Shri Ashish Kumar Pandey, Sr. Dr सुनवाई क" तारीख/Date Of Hearing : 20.09.2023 घोषणा क" तारीख /Date Of Pronouncement: 03.10.2023 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: The Present Appeal Has Been Filed By The Assessee Against Order Of The Learned Commissioner Of Income-Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As "Cit(A)" For Short] Dated 15.12.2021 Passed Under Section 250 Of The Income Tax Act, 1961 [Hereinafter Referred To As "The Act" For Short] For The Assessment Year (Ay) 2011-12. 2. Ground No.1 Raised By The Assessee Challenges The Validity Of Assessment Framed In The Present Case Under Section 147 Of The Act. The Said Ground Reads As Under:-

For Appellant: Shri D.M. Rindani, ARFor Respondent: Shri Ashish Kumar Pandey, Sr. DR

Section 132Section 143(1)Section 143(3)Section 147Section 148Section 250

Corporation Vs. ITO AY : 2011-12 3. The contention of the ld. Counsel for the assessee before us was that the belief of escapement of income of the assessee was not that of the Assessing Officer but was a borrowed belief of the DCIT, Central Circle-1, Rajkot ... basis of whose information, to the effect that the assessee had taken accommodation entries during the year, the AO had formed belief of escapement of income of the assessee. His contention was that the Assessing Officer, without verifying the information and merely on the basis of the information supplied

Ruby Singh, New Delhi vs. DCIT, Central Circle-8, New Delhi

In the result, all the seven captioned appeals filed by the assessee stand dismissed in the aforesaid manner

ITA 2881/DEL/2022[2019-20]Status: DisposedITAT Delhi29 Sept 2023AY 2019-20

Bench: Shri Chandra Mohan Garg & Shri M. Balaganesh, Accoutant Member

For Appellant: Shri Gautam Jain, Adv. &For Respondent: Shri Vivek Vardhan, Sr. DR

Section 147Section 148Section 151

unsecured loan has also escaped assessment. 3.2.1 Ld. Sr. DR also submitted that the AO was in possession of adequate material indicating the escapement of income and had carried out necessary analysis such as correlating the same with the income tax return filed by the assessee as well as statements ... case of the appellant was reopened us 147 of Income Tax Act on the basis of the following summarized reasons to believe of escapement of income: 1. It is prima facie evident that Ms. Ruby Singh has failed to explain the genuineness of these transactions (cash deposits in the bank