“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

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

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

ITA 6191/MUM/2019[2014-15]Status: DisposedITAT Mumbai30 Aug 2023AY 2014-15

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

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 6033/MUM/2019[2008-09]Status: DisposedITAT Mumbai30 Aug 2023AY 2008-09

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

Parvati Gupta, Delhi vs. ITO, Ward 2(2)(1), Ghaziabad

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

ITA 1911/DEL/2023[2012-13]Status: DisposedITAT Delhi30 Aug 2023AY 2012-13

Bench: Shri Kul Bharat[Assessment Year : 2012-13] Parvati Gupta, Vs Ito, F-207, Alaknanda Apartment, Ward-2(2)(1), Rampuri, Chander Nagar, Ghaziabad. Ghaziabad, Uttar Pradesh-201011. Pan-Aoapg2423B Appellant Respondent Appellant By Shri K.Sampath & Shri V. Raja Kumar, Advocates Respondent By Shri Om Parkash, Sr.Dr Date Of Hearing 17.08.2023 Date Of Pronouncement 30.08.2023

Section 144Section 147Section 148

opportunity of hearing. ii. initiating proceedings u/s 147/148 of the Act without there being any valid reason leading to the belief of escapement of income. iii. confirming the order passed u/s 144 r.w.s 147 of the Act determining taxable income at Rs.14,38,600/- being the amount of cash deposit

Lakshman Tools Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, appeals are dismissed

ITA 2136/DEL/2017[2011-12]Status: DisposedITAT Delhi29 Aug 2023AY 2011-12

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2009-10 With Assessment Year: 2011-12

Section 133(6)Section 143(1)Section 147

Maharashtra Sales Tax Department. Thus, as could be seen from the aforesaid facts, the Assessing Officer had tangible information in his possession indicating escapement of income chargeable to tax. 11. It is fairly well settled, at the time of reopening of assessment, the Assessing Officer, based on materials

Lakshman Tools Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, appeals are dismissed

ITA 2135/DEL/2017[2009-10]Status: DisposedITAT Delhi29 Aug 2023AY 2009-10

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2009-10 With Assessment Year: 2011-12

Section 133(6)Section 143(1)Section 147

Shivkripa Devcon P Ltd, Indore vs. ITO 5(1), Indore

ITA 1/IND/2022[2012-13]Status: DisposedITAT Indore28 Aug 2023AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2012-13

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

capital gain or loss to beneficiaries. Based thereon, the AO made up his mind that the assessee has also taken advantage resulting into escapement of income from assessment. Accordingly, the AO issued notice u/s 148 on 29.03.2019 for proceeding u/s 147. In response, the assessee filed return of income declaring

M/S Rajasthan Rajya Vidyut Prasaran Nigam Ltd., Vidyut Bhawan, Jan Path, Jyoti Nagar, Jaipur vs. DCIT, Circle-6, Jaipur

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

ITA 261/JPR/2023[2015-16]Status: DisposedITAT Jaipur24 Aug 2023AY 2015-16

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

For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri James Kurian (CIT)

Section 115JSection 142(1)Section 147

already on record to allege that by allowing deduction of depreciation of Rs.269.10 crore, the book profit has been under computed resulting into escapement of income. 2. It may be noted that in the reasons recorded for reopening, the AO has not referred to any information or material which

Trafogura Global Services Pvt Ltd, Mumbai vs. PCIT-6, Mumbai

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

ITA 1690/MUM/2023[2018-2019]Status: DisposedITAT Mumbai23 Aug 2023AY 2018-2019

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Trafigura Global Services Pvt. Ltd. Pcit-6 501, 5Th Floor, Aaykara Bhawan Unit No. 1101, A-Wing, Plot No. C, 66G Block, One Bkc, Bandra Kurla Vs. M. G. Road, Mumbai-400 020 Complex, Mumbai – 400 051

For Appellant: Shri Madhur AgarwalFor Respondent: Shri Sanjay Deshmukh

Section 143(3)Section 263

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

M/S. Doit Creations (India) Pvt. Ltd, Mumbai vs. Pr. Comm of Income Tax, Central Circle-3, Mumbai

In the result, the appeal of the assessee is partly allowed and additional ground of appeal filed by the assessee is dismissed

ITA 1354/MUM/2022[2015-16]Status: DisposedITAT Mumbai23 Aug 2023AY 2015-16

Bench: Shri Amit Shukla & Shri Amarjit Singhdoit Creations (India) Vs. Principal Commissioner Private Limited Of Income Tax, Central 307 & 308, 3Rd Floor,, Circle 3, Room No. 1901, Midas, Sahar Plaza, 19Th Floor, Air India Andheri (East) Building, Nariman Point, Mumbai – 400 069 Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aabcd8695A Appellant .. Respondent [ Appellant By : Dharan Gandhi Respondent By : Neena Jeph Date Of Hearing 27.07.2023 Date Of Pronouncement 23.07.2023 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assesse Is Directed Against The Order Passed By The Ld. Pcit(Central), Mumbai -3, Dated 31.03.2022 For A.Y. 2015-16. The Assessee Has Raised The Following Grounds Before Us: “1. On The Facts & Circumstances Of The Case & In Law, The Hon'Ble Pr.Cit Central - 3 (Herein After Referred As 'Pcit) Erred In Invoking Provisions Of Section 263 Of The Income Tax Act, 1961 (Hereinafter Referred As 'The Act') By Issuing The Notice Inspite Of The Fact That Assessment U/S. 143(3) & U/S 143(3) R.Ws 147 Of The Act Has Been Completed After Due Examination & Application Of Mind While Framing The Assessment Order U/S 143(3) & U/S 143(3) Rws 147 Of The Act. Further Order U/S 263 Is Also Passed Merely Setting Aside The Assessment To The File Of The Learned Assessing Officer To Conduct Proper Inquiry Which Is Unjustified. It Is Therefore Submitted That The Order Passed U/S 263 Should Be Cancelled.

For Appellant: Dharan GandhiFor Respondent: Neena Jeph

Section 143(3)Section 147Section 148Section 263Section 56(2)(viib)

India) Pvt.ltd. Vs. Pr.CIT,CC-3 56(2)(viib) of the Act. Therefore, the AO stated in the reason that there is an escapement of income of Rs.30,26,55,931/- within the meaning of Sec. 147 of the Act. Accordingly, the case was reopened and assessment

Showtime Events India Pvt. Ltd., New Delhi vs. DCIT, Circle- 23(1), New Delhi

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

ITA 4239/DEL/2017[2008-09]Status: DisposedITAT Delhi22 Aug 2023AY 2008-09

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar U.S

For Appellant: Shri Raghvendra Singh, AdvFor Respondent: Shri Anuj Garg, Sr. DR

Section 143(3)Section 147Section 148Section 154

failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period ... indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition

Citicorp Trustee Company Ltd As Trustee for Fccb Issued by Jindal Saw Ltd, Mumbai vs. Deputy Commissioner of Income Tax (Int Taxation)-2(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 784/MUM/2023[2014-2015]Status: DisposedITAT Mumbai21 Aug 2023AY 2014-2015

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No. 784/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2014-15) Citicorp Trustee Company बिधम/ Dcit (International Ltd. As Trustee For Fccb Taxation)-2(1)(1) Vs. Issued By Jindal Saw Ltd. 17Th Floor, 1713, Air India Citigroup Centre, Canada Building, Nariman Point, Square, Canary Wharf Mumbai-400021. London E14 5Lb United Kingdom. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaecc0452D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Anish Thackar/Nikhil Tiwari/Lekh Mehta Revenue By: Shri Amit Kumar Soni (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 19/07/2023 घोषणा की तारीख /Date Of Pronouncement: 21/08/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Assessing Officer (Ao) Dated 19.01.2023 Passed U/S 143(3) R.W.S. 144C(13) R.W.S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”). 2. At The Outset, The Ld. Ar Of The Assessee Brought To Our Notice The Ground No. 2 Wherein The Assessee Has Raised The Legal Issue Against The Action Of The Ao To Have Reopened The Assessment U/S 147 Of The Act Without Satisfying The Essential Condition Prescribed Under The Act; & Therefore Contends That The Action Of The Ao Is Ab-Initio-Void. 3. In Order To Examine The Legal Issue Raised By The Assessee, It Is Necessary To Look Into The Reasons Recorded By Ao To Reopen The Assessment Which Is Reproduced As Under: -

For Appellant: Shri Anish Thackar/NikhilFor Respondent: Shri Amit Kumar Soni (Sr. DR)

Section 143(3)Section 147Section 201(1)Section 5(2)(b)Section 6

Bharat Forge Ltd was legally un-sustainable, the same cannot be the material on which the AO could have formed “reason to believe escapement of income”. And therefore, the Ld. AR contended that the foundation on the basis of which AO of assessee have resorted to reopening of the assessment ... reopening the assessment u/s 147 of the Act AO is that he has to firstly record his “reasons to believe, escapement of income”. It is well settled that the “reason to believe” postulates a foundation based an information and belief based on reason. In this case, the AO of assessee

M/S. Jet Speed Realtors, Mumbai vs. ACIT Circle 32 (1), Mumbai

ITA 63/MUM/2022[2013-14]Status: DisposedITAT Mumbai18 Aug 2023AY 2013-14

Bench: Shri Aby T Varkey () & Ms. Padmavathy S. ()

Section 131Section 133ASection 143(3)Section 147Section 148Section 68Section 69C

relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been a failure to fully and truly disclose material fact. 13. In the background of this settled legal position

Jet Speed Realtors, Mumbai vs. ACIT Cir 32(1), Mumbai

ITA 24/MUM/2022[2012-13]Status: DisposedITAT Mumbai18 Aug 2023AY 2012-13

Bench: Shri Aby T Varkey () & Ms. Padmavathy S. ()

Section 131Section 133ASection 143(3)Section 147Section 148Section 68Section 69C

Jet Speed Realtors, Mumbai vs. ACIT Cir 32 (1), Mumbai

ITA 23/MUM/2022[2011-12]Status: DisposedITAT Mumbai18 Aug 2023AY 2011-12

Bench: Shri Aby T Varkey () & Ms. Padmavathy S. ()

Section 131Section 133ASection 143(3)Section 147Section 148Section 68Section 69C

Mp Ferrous and Non Ferrous India Pvt Ltd, Ahmedabad vs. DCIT, Cir-7(2)(2), Mumbai

In the result, the appeal by the assessee is allowed

ITA 1249/MUM/2023[2010-11]Status: DisposedITAT Mumbai17 Aug 2023AY 2010-11

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

For Appellant: Shri Yeshwant Gupta a/wFor Respondent: Shri Prashant Barate

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

relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite

Mp Ferrous and Non Ferrous India Pvt Ltd., Mumbai vs. DCIT, Cir-7(2)(2), Mumbai

In the result, the appeal by the assessee is allowed

ITA 1248/MUM/2023[2009-10]Status: DisposedITAT Mumbai17 Aug 2023AY 2009-10

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

For Appellant: Shri Yeshwant Gupta a/wFor Respondent: Shri Prashant Barate

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

Mohanbhai Raghavbhai Beladiya, Surat vs. Income Tax Officer, Ward - 3(2)(5), Surat

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

ITA 359/SRT/2023[2012-13]Status: DisposedITAT Surat15 Aug 2023AY 2012-13

Bench: Shri Dr. A. L. Sainiआयकर अपील सं./Ita No.359/Srt/2023 Assessment Year: (2012-13) (Physical Hearing) Mohanbhai Raghavbhai Beladiya, Vs. The Ito, 41-42, Vishnu Nagar Society – 1, Ward-3(2)(5), Ankur Char Rasta, A. K. Road, Surat Surat – 395008. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aospb9227J (Assessee) (Respondent)

Section 139Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 250(6)Section 68

case and in law, CIT(A) erroneously passed order as failed to consider the issues whether the "Reason recorded to believe escapement of income and said Copy of Reasons recorded "was duly served on the assessee is the precondition before initiation of proceedings and issuing notice

Diagold Designs Limited, Mumbai vs. DCIT-12(2)(1), Mumbai

In the result, both the appeals of the assessee, are partly allowed

ITA 445/MUM/2023[2010-11]Status: DisposedITAT Mumbai14 Aug 2023AY 2010-11

Bench: Shri Amit Shukla & Shri Gagan Goyal & Diagold Designs Limited, Cc2070, Bharat Diamond Bourse, Bandra Kurla Complex, Mumbai-400 051 ...... Appellant Vs. Dcit-12(2) (1) Aayakar Bhavan, M. K. Road, Mumbai-400 020 Pan – Aabcd3716 ..... Respondent

For Appellant: Shri Madhur Agrawal, Hitesh TrivediFor Respondent: Smt. Mahita Nair, CIT-DR

Section 10BSection 147Section 148Section 250

relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal ... have finally ascertained the fact by legal evidence or conclusion. What is required is reason to believe but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed

Nakoda Metal Industries, Mumbai vs. ITO - 19(2)(4), Mumbai

In the result, the appeal by the assessee is dismissed

ITA 4958/MUM/2018[2009-10]Status: DisposedITAT Mumbai14 Aug 2023AY 2009-10

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

For Appellant: NoneFor Respondent: Shri Prashant Barate

Section 143(1)Section 147Section 148Section 250Section 254(1)Section 254(2)

fact by legal evidence or conclusion. At the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed ... initiation stage, what is required to be seen is whether there are prima-facie 'reasons to believe' but not the established fact of escapement of income. The AO also recorded proper reasons for formation of the belief that income has escaped assessment. It is also important to note that

Sharda Nigam, New Delhi vs. ITO Ward 59(2), New Delhi

In the result, the appeal of the assessee is partly allowed as indicated above

ITA 439/DEL/2023[2015-16]Status: DisposedITAT Delhi11 Aug 2023AY 2015-16

Bench: Shri Challa Nagendra Prasad, S.M.C. आ.अ.सं/.I.T.A No. 439/Del/2023 िनधा"रणवष"/Assessment Year : 2015-16 Sharda Nigam, Income Tax Officer, बनाम C–4, Takshila Apartments, Ward : 59 (2), N. Delhi. Vs. 57 - I. P. Extension, National Faceless Delhi – 110 092. Assessment Centre, Delhi. Pan No. Adspn7886Q अपीलाथ" / Appellant ""यथ" / Respondent

For Appellant: C. A

Section 148Section 69C

July, 2021 the assessee once again requested the Assessing Officer to provide copy of approval of JCIT and copy of reason to believe escapement of income on the basis of which notice under section 148 was issued. Assessee also stated that this information is important to file reply to notice