“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

ITO, Ward-2(2)(3), Surat vs. Maheshchand G. Patel (HUF), Surat

In the result, the grounds of appeal raised by the revenue are dismissed

ITA 20/SRT/2020[2008-09]Status: DisposedITAT Surat27 Sept 2023AY 2008-09

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Physical Hearing) I.T.O., Maheshchandra G. Patel (Huf), Ward-2(2)(3), 22, Vrajbhumi, Tirumala Society, In Vs. Surat. Front Of Balaji Nagar, Piplod, Surat. Pan No. Aajhm 2315 P Appellant/ Assessee Respondent/ Revenue

Section 132Section 147Section 148Section 254(1)Section 292C

were initiated under Section 153C of the Act if any seized material disclosing earning of additional income, nor recorded satisfaction with regard to escapement of income, the initiation of reassessment proceedings under Section 147 is not legally sustainable. To support such view, the ld. AR of the assessee relied upon

Shri Hemrajsinh Kiransinh Rathod, Dadra & Nagar Haveli vs. Principal Commissioner of Income Tax, Valsad

In the result, appeal filed by the Assessee is allowed

ITA 239/SRT/2023[2018-19]Status: DisposedITAT Surat26 Sept 2023AY 2018-19

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.239/Srt/2023 Assessment Year: (2018-19) (Virtual Hearing) Hemrajsinh Kiransinh Rathod, Vs. The Pcit, Krishna Petroleum, Iocl Dealer, Valsad Near Jalaram Temple, Waghdhara Road, Village Dadra - 396193, Ut Of Dadra & Nagar Haveli "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aihpr4957N (Appellant) (Respondent) Appellant By Shri Hardik Vora, Advocate Respondent By Shri Ashok B. Koli, Cit(Dr) 14/08/2023 Date Of Hearing Date Of Pronouncement 26/09/2023

Section 143(3)Section 263

which, the case has been selected or the issue mentioned therein. If the AO of the view that there is a potential escapement of income, he may convert, the "Limited Scrutiny" into "Complete Scrutiny" but such view should be reasonable view based on credible information or material available on record

Income Tax Officer, Ward-2(3)(8), Surat vs. Mahaveer Shantilal Jain, Surat

ITA 453/SRT/2019[2013-14]Status: DisposedITAT Surat25 Sept 2023AY 2013-14

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.453/Srt/2019 "नधा"रण वष"/Assessment Year: (2013-14) (Physical Hearing) The Ito, Vs. Mahaveer Shantilal Jain, Ward-2(3)(8), Prop. M/S Mukesh Diamonds, 1St Surat. Office No.401, Floor, H.No.5/1171/72/73/1090, New Dtc, Hath Falia, Haripura, Surat – 395009. (Appellant) (Respondent) "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aqupj6439L Appellant By Shri Ritesh Mishra, Cit(Dr) Respondent By Shri P. M. Jagasheth, Ca Date Of Hearing 08/09/2023 Date Of Pronouncement 25/09/2023

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

Assessing Officer sought to make protective assessment by reopening an assessment on the ground that a contingency may arise in future resulting in escapement of income that would be wholly impermissible and would amount to rewriting of the statutory provision. Paragraph 18 of the said judgment reads as under ... under section 148 on the ground that the Assessing Officer is of the opinion that a contingency may arise in future resulting an escapement of income. That would, in our view, be wholly impermissible and would amount to a rewriting of the statutory provision. Moreover, the reliance which is sought

Assistant Commissioner of Income Tax (Central), Bilaspur vs. M/S Jagannathdas Harichandmal Jewellers Pvt. Ltd, Raigarh

In the result appeal of revenue is partly allowed in terms of our observations herein above

ITA 106/RPR/2022[2012-13]Status: DisposedITAT Raipur22 Sept 2023AY 2012-13

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.106/Rpr/2022 िनधा"रण वष" /Assessment Year: 2012-13 The Assistant Commissioner Of Vs M/S. Jagannathdas Harichandmal Income Tax (Central), Bilaspur Jewellers Pvt. Ltd. Sadar Bazar, Raigarh (C.G.) Pan: Aaccj2840G (अपीलाथ" /Appellant) (""यथ" / Respondent) .. िनधा"रती क" ओर से /Assessee By : Shri Sunil Kumar Agrawal, Ca राज"व क" ओर से /Revenue By : Shri Choudhary N.C. Roy, Sr. Dr सुनवाई क" तार"ख / Date Of Hearing : 14/07/2023 घोषणा क" तार"ख/Date Of Pronouncement : 22/09/2023 आदेश / O R D E R Per Arun Khodpia, Am : The Captioned Appeal Is Filed By The Revenue Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)-3, Bhopal, Dated 16.03.2022 Which In Turn Arises From The Order By Ld. Assessing Officer U/S 143(3) R.W.S. 147 Dated 30.12.2018 For A.Y.2012-13. The Grounds Of The Appeal Raised By The Revenue Are As Under: “ 1. Whether On The Fact & In The Circumstances Of The Case In Law, While Holding Assessment Passed U/S 147 R.W.S. 143(3) Of Act As Invalid & Void-Ab-Initio, The Ld. Cit(A) Completely Ignored The Fact That During The Course Of Survey, The Assessee Failed To Discharge Its Burden In Establishing 'The Identity, Creditworthiness & Genuineness Of The Transactions As Required U/S 68 Of The Income Tac Act. Ld. Cit(A) Erred In Ignoring That Reassessment Proceeding Are Based On Fresh Facts/Information Rather Than Change Of Opinion. 2. Whether On The Fact & In The Circumstances Of The Case In Law, The Ld.Cit(A) Erred In Ignoring That Confirmation Of Concealment Of Income/Disclosure Made In Statement Recorded During Survey U/S 133A Of Act Is An Information, Though Not Conclusive, Which May Be Used In Regular Assessment Or Reassessment Proceedings.

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Shri Choudhary N.C. Roy, Sr. DR

Section 133ASection 143(3)Section 147Section 148Section 68

have any evidentiary value, there is no basis in holding that there are materials available before the AO to make out cases of escapement of income. A reason must be formed by the AO to reopen an assessment on the basis of material or information recognised under law. 8 Even ... 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" In the present facts, we note that the Assessing Officer during

Shruti Vinimay Limited, Nagpur vs. DCIT, Central Circle 4(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 223/MUM/2023[2010-11]Status: DisposedITAT Mumbai20 Sept 2023AY 2010-11

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No.223/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2010-11) Shruti Vinimay Private बिधम/ Dcit, Central Circle-4(3) Limited Room No.1921, 19Th Vs. 502, Mahalaxmi Apartment Floor, Air India Building, Shivaji Nagar, Nagpur Nariman Point, Mumbai- (Urban) Nagpur-440010, 400021. Maharashtra, India. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aajcs4629R (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Bhupendra Shah Revenue By: Shri Ganesh Shah (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 22/08/2023 घोषणा की तारीख /Date Of Pronouncement: 20/09/2023 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-52 [Hereinafter Referred To As “The Cit(A)], Mumbai Dated 15.12.2022 For Assessment Year 2010-11. 2. At The Outset, The Ld. Ar Of The Assessee, After A Preliminary Hearing Has Not Pressed Ground No. 1 & 2 Raised In The Revised/Additional Ground Of Appeal Filed Before Us Viz Action Of The Transfer Of The Case From Kolkata To Mumbai U/S 127 Of The Income Tax Act, 1961 (Hereinafter “The Act) As Well As The Action Of Ao First Of All, Dropping The Proceedings Initiated U/S 153C Of The Act & Instead Resorting To The Impugned Re-Opening Of Assessment, Which According To Assessee Is Bad In Law. Since The Aforesaid Two (2) Grounds Have Not Been Pressed By The Ld. Ar Both Grounds Stands Dismissed. 3. Coming To The Next Ground Of Appeal Of The Assessee, Which Is Against The Action Of The Ao To Have Reopened The Assessment U/S 147 Of The Act By Issuance Of Notice U/S 148 Of The Act Which According To The Assessee Is Bad In Law. Since It Is A Legal Issue The Same Is Dealt With.

For Appellant: Shri Bhupendra ShahFor Respondent: Shri Ganesh Shah (Sr. AR)

Section 127Section 147Section 148Section 153C

completed assessments can be disturbed only when there is information or evidence regarding undisclosed income or AO had information in his possession showing escapement of income as stipulated u/s 147 of the Act. As per Section 147 of the Act, if the AO had to re- open the assessment, then ... record the reason to reopen the assessment, wherein he should record the “reason to believe, escapement of income”. It is settled position of law that ‘reason to believe’ postulates a foundation based on an information and belief based on reason. After a foundation based on information is there, still, there

Sanjeev Agrawal, New Delhi vs. ACIT, CC-15, New Delhi

In the result, both the appeals of the assessee areallowed

ITA 1519/DEL/2021[2017-18]Status: DisposedITAT Delhi20 Sept 2023AY 2017-18

Bench: Shri Saktijit Dey, Vice-& Shri Girish Agrawal

For Appellant: Shri Gautam Jain & Ms. Monika Aggarwal, AdvsFor Respondent: Shri Ramdhan Meena, Sr. DR

Section 10(38)Section 143(3)

information furnished by the assessee, when he recorded the reason, he formed a prima facie reason to believe that there is an escapement of income. He should have converted his reason into the fact by making an investigation on the information provided by the assessee. For the reasons best known

Sanjeev Agrawal, New Delhi vs. ACIT, CC-15, New Delhi

In the result, both the appeals of the assessee areallowed

ITA 1518/DEL/2021[2016-17]Status: DisposedITAT Delhi20 Sept 2023AY 2016-17

Bench: Shri Saktijit Dey, Vice-& Shri Girish Agrawal

For Appellant: Shri Gautam Jain & Ms. Monika Aggarwal, AdvsFor Respondent: Shri Ramdhan Meena, Sr. DR

Section 10(38)Section 143(3)

Daffodills Pharmaceuticals Ltd, Meerut vs. PCIT, Ghaziabad

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

ITA 1148/DEL/2022[2012-13]Status: DisposedITAT Delhi19 Sept 2023AY 2012-13

Bench: SHRI N. K. BILLAIYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 143(3)Section 147Section 151Section 263Section 40Section 40A(2)(b)

jurisdiction u/s 147 is itself is bad in law as the reasons recorded would not have led to the formation of belief of escapement of income. (b) That no valid satisfaction/approval u/s 151 was obtained. (c) That impugned reassessment order was passed without complying with the mandatory conditions of section

Hasmukhbhai Dahyabhai Patel, Vapi vs. Dy. Commissioner of Income Tax, Vapi Circle, Vapi

In the result, appeal filed by the assessee is allowed

ITA 115/SRT/2023[2012-13]Status: DisposedITAT Surat19 Sept 2023AY 2012-13

Bench: SHRI PAWAN SINGH (Judicial Member), DR. A. L. SAINI (Accountant Member)

For Appellant: Shri Bandish Soparkar, AdvocateFor Respondent: Shri Vinod Kumar, Sr- DR

Section 143(3)Section 148Section 271(1)(c)Section 274

that there was a deliberate attempt, on the part of the assessee, to conceal the income on capital gains and only when the escapement of income came to the notice of Income Tax Department, the assessee offered such income for taxation. Thus Explanation-3 to Section

Santosh Kaushik, New Delhi vs. ITO Ward - 41(5), New Delhi

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

ITA 685/DEL/2020[2008-09]Status: DisposedITAT Delhi18 Sept 2023AY 2008-09

Bench: Sh. C. M. Gargdr. B. R. R. Kumarita No. 685/Del/2020 : Asstt. Year : 2008-09 Ms. Santosh Kaushik, Vs Income Tax Officer, 1/27A, Near Hanuman Mandir, East Ward-41(5), Punjabi Bagh, New Delhi-110026 New Delhi-110002 (Appellant) (Respondent) Pan No. Amtpk4230D Assessee By : Sh. Manish Malik, Adv. & Sh. Vinod Gupta, Adv. Revenue By : Sh. Anuj Garg, Sr. Dr Date Of Hearing: 05.07.2023 Date Of Pronouncement: 18.09.2023 Order Per Dr. B. R. R. Kumar:

For Appellant: Sh. Manish Malik, Adv. &For Respondent: Sh. Anuj Garg, Sr. DR

Section 143(3)Section 147Section 148Section 68

assessee has contended that the AO resorted to proceedings u/s 148 in a mechanical manner without bringing on record any evidence of escapement of income. We have gone through the order of the ld. CIT(A) on this issue which reads as under: “It is seen from the order that

Income Tax Officer, Aayakar Bhavan, Majura Gate vs. Shri Gopalbhai T Patel(HUF), Surat

In the result, the grounds of appeal raised by the revenue are dismissed

ITA 498/SRT/2023[2011-12]Status: DisposedITAT Surat18 Sept 2023AY 2011-12

Bench: Shri Pawan Singhआ.अ.सं./Ita No.498/Srt/2023 (Ay 2011-12) (Hearing In Physical Court) Income Tax Officer, Ward Shri Gopalbhai T Patel (Huf) No.2(2)(5) Surat, 2, Vaibhav Bungalow, Vs Room No. 613, Near Radiant High School, Aaykar Bhavan, Surat Gymkhana Road, Surat- Majura Gate, 395007 Surat-395001 Pan Aachg 7284 E अपीलाथ"/Appellant ""थ" /Respondent

Section 10(38)Section 133(6)Section 143(3)Section 148Section 254(1)

Rs.3,31,781/- in his return of income, which is exempt under section 10(38). The assessee contended that there was no escapement of income in his case. The objection of assessee was disposed of by Assessing Officer vide order dated 05.10.2018. The Assessing Officer after disposing the objection, proceeded ... assessee filed detailed written submission raising all the pleas as has been raised before Assessing Officer. The assessee explained that there was no escapement of income. The assessee has earned capital gains of Rs.3,31,781/-, which was shown in the return of income. The assessee also explained that

M/S Citi Plaza, Jalandhar vs. Income Tax Officer, Ward 3(1), Jalandhar

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

ITA 356/ASR/2017[2006-07]Status: DisposedITAT Amritsar13 Sept 2023AY 2006-07

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

Section 147Section 148Section 250

empowered to assess or re-assess the income which has escaped assessment. So at the most, if the Revenue wishes to tax the escapement of income then it has followed the scheme provided under the Act. The relevant provisions for taxing the escape income are given u/s 147/263

ACIT Circle-59(1), New Delhi vs. Neeraj Kumar Singhal, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 283/DEL/2021[2009-10]Status: DisposedITAT Delhi13 Sept 2023AY 2009-10

Bench: Shri Saktijit Dey & Shri Pradip Kumar Kedia

For Appellant: Shri Shri Amit Goel, CAFor Respondent: Ms. Smita Singh, Sr.DR

Section 139Section 143(3)Section 147Section 148Section 151(1)

assessee in the original assessment proceedings. The relevant finding given by court is as under : 12. It is clear that the escapement of income by itself is not sufficient for reopening the assessment in a case covered by I.T.A. No.283/Del/2021 8 the first proviso to Section 147 of the said ... Prabhu Dayal Aggarwal was "Initiating proceedings u/s 147 / 148 of IT Act without there being cogent material leading to the belief of escapement of income". This Ground of appeal is similar to the Ground of appeal No. 2 raised in the present appeal. The How'ble ITAT Delhi

Raj Kumar Karanwal, Muzaffarnagar vs. Pr.CIT, Dehradun

In the result, the appeal of the assessee is allowed

ITA 644/DEL/2021[2010-11]Status: DisposedITAT Delhi11 Sept 2023AY 2010-11

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year 2010-11

For Appellant: Shri Sankalp Malik, AdvocateFor Respondent: Ms. Sapna Bhatia, CIT-DR

Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 151Section 263

jurisdiction u/s 147 is itself is bad in law as the reason recorded would not have led to the formation of belief, of escapement of income. b) That no valid satisfaction/approval u/s 151 was obtained. c) That no valid notice u/s 143(2) was issued/served during re-assessment proceedings

Kailash Chand Yadav, 100, Kalu Baba Ki Dhani, Sheoshinghpur, Akoda, Phulera-303338 vs. Income Tax Officer, Ward - 1(2), Jaipur

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

ITA 82/JPR/2023[2010-11]Status: DisposedITAT Jaipur11 Sept 2023AY 2010-11

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri S.L. Poddar(Adv.)&For Respondent: Smt. Monisha Choudhary(Addl.CIT)

Section 142(1)Section 148Section 69A

themselves. The mandatory jurisdictional requirement will not be fulfilled if the reasons do not indicate and not disclose all the material facts indicating escapement of income. It is the reasons which have to explain the material which forms the basis of reasons to believe for escapement of income ... facts and circumstances the reasons recorded by the Learned Assessing Officer are faulty and cannot lead to form a belief that there was escapement of income. 6. It is a case of borrowed satisfaction - 15 Kailash Chand Yadav vs. ITO It is submitted that Learned Assessing Officer has not carried

Kartar Singh, Rohtak vs. ACIT, Circle- 42(1), New Delhi

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 3268/DEL/2019[2010-11]Status: DisposedITAT Delhi05 Sept 2023AY 2010-11

Bench: Sh. C. M. Gargdr. B. R. R. Kumarita No. 3268/Del/2019 : Asstt. Year : 2010-11 Kartar Singh, Vs Acit, C/O S.K. Bansal, Ca, Circle-42(1), 101, First Floor, Kochar Market, New Delhi-11 Jhajjar Road, Opp. Khanu Mandi, Rohtak, Haryana-12001 (Appellant) (Respondent) Pan No. Cskps5940K Assessee By : None Revenue By : Sh. Amit Katoch, Sr. Dr Date Of Hearing: 19.07.2023 Date Of Pronouncement: 05.09.2023 Order Per Dr. B. R. R. Kumar:

For Appellant: NoneFor Respondent: Sh. Amit Katoch, Sr. DR

Section 49(1)Section 54B

satisfying requirements of section 147 & 148 of the IT Act is bad in law as well as on facts since there was no escapement of income from Capital Gains if properly computed u/s 45 to 55 of the LT. Act. Reasons have been partly recorded u/s 147 only to satisfy

DCIT-Circle-3(3)(1), Mumbai vs. S D Corporation Private Limited, Mumbai

In the result, the appeal of the revenue vide ITA Nos

ITA 6204/MUM/2019[2009-10]Status: DisposedITAT Mumbai30 Aug 2023AY 2009-10

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita Nos.6191 To 6194, 6204 & 6033 /Mum/2019 (A.Ys. 2008-09, 2009-10, 2011-12 To 2014-15)

For Appellant: Mahita NairFor Respondent: Dharmesh Shah &

Section 115JSection 143(3)Section 147

assess such income by issue of notice u/s. 148. The basic conditions for issue of notice u/s.148 is there should be escapement of income chargeable to tax. On the facts of the case and which is substantiated through documents & evidences, we have not made any claim of expenditure while computing ... Developers is also capitalized and not claimed as deduction in computing taxable income and to this extent also there is no escapement of income. 6. We submit that there has to be direct nexus between the information in the possession of the Assessing Officer and his belief that income