“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

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1540/MUM/2023[2012-2013]Status: DisposedITAT Mumbai28 Jul 2023AY 2012-2013

Bench: Shri Br Baskaran, Am & Shri N. K. Choudhry, Jm आयकरअपीलसं./ I.T.A. No. 1540/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2012-13) & आयकरअपीलसं./I.T.A. No. 1539/Mum/2023 (निर्धारणवर्ा / Assessment Year: 2013-14)

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale

Section 132Section 132(4)Section 147Section 250

under section 143(1), therefore, A.O was justified in reopening of the assessment on bringing the material on record that there was an escapement of income from assessment in the matter Hence the grounds raised by the appellant challenging validity of assessment/reassessment notice are not tenable on facts

Shri Darshan K Vakharia, Mumbai vs. Income Tax Officer, Ward 2(1), Mumbai

Appeal is allowed

ITA 1539/MUM/2023[2013-2014]Status: DisposedITAT Mumbai28 Jul 2023AY 2013-2014

For Appellant: Shri. Vimal PunmiyaFor Respondent: Shri. Nagnath B. Pasale

Section 132Section 132(4)Section 147Section 250

Executive Trading Co. Pvt Ltd., Ahmedabad vs. Comm of Income Tax (A), NFAC, Delhi

ITA 281/MUM/2023[2017-18]Status: DisposedITAT Mumbai27 Jul 2023AY 2017-18

For Appellant: Shri Vijay MehtaFor Respondent: Shri Biswanath Das

Section 142(1)Section 144BSection 147Section 148Section 69C

bank and had booked bogus purchase expenditure. On the basis of the aforesaid, the Assessing Officer formed a belief that the there was escapement of income of INR 104,99,73,370/-. The Assessing Officer recorded reasons and after obtaining prior-approval on 11/03/2020 initiated reassessment proceedings by issuance ... Assessing Officer or the CIT(A) to show physical movement of goods. This resulted in booking of inflated/bogus expenses and the consequent escapement of income. (iv) The report from the forensic auditor showed lapses and irregularities on the part of the Appellant. (v) The order dated 14/05/2019 passed

Omega Finhold Pvt. Ltd., New Delhi vs. ACIT, Central Circle- 14, New Delhi

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

ITA 1286/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Jul 2023AY 2010-11

Section 115JSection 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

Deepak Srichand Bathija, Mumbai vs. National Faceless Appeal Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 2103/MUM/2022[2011-12]Status: DisposedITAT Mumbai26 Jul 2023AY 2011-12

For Appellant: Shri H. S. RahejaFor Respondent: Shri P. D. Chogule (Sr. AR)

Section 129Section 132(4)Section 147Section 148Section 151(2)

assessee by letter dated 19.06.2018) the Ld. AR submitted that the issue on which AO has re-opened the assessment is mainly alleging escapement of income on capital gain on sale of shares of M/s. Sampada Chemicals Limited, which fact has been duly disclosed in the original return filed ... Deepak Srichand Bathija in the documents submitted before the AO [along with original return of income], erroneously the AO has alleged escapement of income of Rs.25,35,908/- whereas it was brought to our notice from perusal of page no. 2 PB [computation of income & capital gain statement], that

Shrimati Amarjit Kaur W/O Bugar Singh, Mansa vs. Income Tax Officer Ward 1(4), Mansa

In the result, the appeal of the assessee is dismissed

ITA 1/ASR/2018[2009-10]Status: DisposedITAT Amritsar26 Jul 2023AY 2009-10

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

For Appellant: NoneFor Respondent: Sh. S. M. Surendranath, Sr. DR

Section 147Section 148Section 251(2)Section 49

basis of the reasons as recorded. The next important point is that even though reasons, as recorded, may not necessarily prove escapement of income at the stage of recording the reasons, such reasons must point out to an income escaping assessment and not merely need of an inquiry which ... assessment is proved to the hilt. What is, however, necessary is that there must be something which indicates, even if not establishes, the escapement of income from assessment. It is only on this basis that the Assessing Officer can form the belief that an income has escaped assessment. Merely because

ITO, Ward-2(1), Thane vs. Shri Jitendra Kumar Ajaypal Singh, Thane

Accordingly, the AO is directed to delete the addition. Thus, the grounds of appeal raised by the assessee are allowed

ITA 1363/MUM/2023[2011-12]Status: DisposedITAT Mumbai25 Jul 2023AY 2011-12

Bench: Shri Kuldip Singhassessment Year: 2011-12

For Appellant: NoneFor Respondent: Shri B. Laxmi Kanth, D.R

Section 143(3)Section 147

whims and fancies without applying any mind. Even no reason has been recorded nor mentioned in the assessment order showing any escapement of income to initiate the reopening rather the AO proceeded to make the addition on the basis of detail submitted by the assessee as to the share trading

M/S. Steering Securities and Finance Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal of the assessee is allowed

ITA 5194/DEL/2014[2005-06]Status: DisposedITAT Delhi25 Jul 2023AY 2005-06

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ashok Kumar Jain, CAFor Respondent: Sh. Anuj Garg, Sr. DR

Section 147Section 148Section 151(2)Section 68

returns of the assessee is not found to be filed. But as this case has received beneficiary accommodation entry there. escapement of income and hence it is proposed for assessment of this case under section 147/148 of the I.T. Act, 1961. In view of above, I have reason to believe

DCIT-CC 5(2), Mumbai vs. Jetair Private Limited, New Delhi

In the result, appeal of the Revenue is dismissed and Cross Objection of the assessee is dismissed as infructuous

ITA 3050/MUM/2022[2018-19]Status: DisposedITAT Mumbai24 Jul 2023AY 2018-19

Section 131Section 133ASection 143(3)

sister concern, the fact that Jet India Private Limited is a loss making company is not a valid criteria to determine escapement of income. 25. Since this transaction is neither an international transaction nor a specified domestic transaction, the transfer provisions do not apply. 18. Thus, the Hon’ble High

Standard Tele Towers Pvt. Ltd., New Delhi vs. DCIT, Circle-24(2), New Delhi

ITA 9761/DEL/2019[2010-11]Status: DisposedITAT Delhi19 Jul 2023AY 2010-11

Bench: Sh. N.K.Billaiya & Sh.Anubhav Sharma

Section 132(4)Section 143(3)Section 147Section 148

actual work being performed by these companies. 2.2 On the basis of material available on record, Ld. AO after recording reasons about escapement of income issued notice u/s 148 to the assessee to the assessee on 30.03.2017. Assessee filed objections against initiation of proceedings u/s 147/148 which were disposed

Narendra Kumar, New Delhi vs. ITO, Ward- 44(2), New Delhi

In the result, Ground No. 1 of the assessee is allowed

ITA 1218/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

For Appellant: & Sh. Anchit Jain, CAFor Respondent: Sh. Arvind Kumar Bansal

Section 132Section 132(4)Section 147Section 148Section 153CSection 68

proceedings initiated u/s 147/148 are invalid and illegal as the reasons recorded do not reflect any satisfaction of the Assessing Officer regarding escapement of income but are based upon borrowed satisfaction of the Investigation Wing of the department. That the Learned CIT(A), failed to acknowledge that nothing has been

Shree Raj Foundation, Mum vs. DDIT (E)-I(2), Mum

In the result, the appeal of the assessee is allowed

ITA 18/MUM/2023[2009-10]Status: DisposedITAT Mumbai18 Jul 2023AY 2009-10

Bench: Shri Aby T. Varkey, Jm & Shri Om Prakash Kant, Am आयकर अपील सं/ I.T.A. No.18/Mum/2023 (निर्धारण वर्ा / Assessment Years: 2009-10) Shree Raj Foundation बिधम/ Ddit(E)-1(2) 201, 2Nd Floor, Krishna [Now Ito (Exem), Ward- Vs. Kunj, Vl Mehta Rd, Jvpd 2(3), Mumbai] Scheme, Vile Parle (W), Income Tax Office, Mumbai-400056. Mtnl Building, Peddar Road, Mumbai-400026. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aadts9658M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Paresh Shaparia Revenue By: Shri Anil Kumar Das (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 30/06/2023 घोषणा की तारीख /Date Of Pronouncement: 18/07/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Foundation Against The Order Of The Ld. Commissioner Of Income Tax/Nfac, Delhi Dated 02.12.2022 For Assessment Year 2009-10. 2. At The Outset, The Ld. Ar Of The Assessee Has Challenged The Action Of The Ao Re-Opening The Assessment Of Ay 2009-10 U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”) Without Following The Binding Decision Of The Hon’Ble Supreme Court In The Case Of Gkn Driveshafts (India) Ltd. Vs. Ito (Sc) (259 Itr 19) & Jurisdictional High Court Decision In The Case Of Fomento Resorts Hotels Ltd Vs. Acit (238 Itr 38) (Bom) & Asian Paints Ltd. Vs. Dcit (2008) (296 Itr 90) (Bom). 3. The Facts Relevant To The Legal Issue Are That The Assessee Had Filed Its Return Of Income On 30.09.2009 Along With The Income & Expenditure Account, Balance-Sheet & Audit Report In Form No. 10B

For Appellant: Shri Paresh ShapariaFor Respondent: Shri Anil Kumar Das (Sr. AR)

Section 11Section 12ASection 143(3)Section 147Section 148

object of assessee, therefore according to AO, it was colorable device to avoid taxation and therefore there was escapement of income. So, he reopened the assessment. The assessee objected to the reopening by filing letter dated 23.01.2014. However, the AO passed the re-assessment order on 07.03.2014 computing the income

Shri Amarjeet Singh, Jammu vs. Income Tax Officer Ward-2 (1), Jammu

In the result, the appeal of the assessee is dismissed

ITA 60/ASR/2020[2008-09]Status: DisposedITAT Amritsar18 Jul 2023AY 2008-09

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

For Appellant: Sh. Aman Raj Bawa &For Respondent: Smt. Ratinder Kaur, Sr. DR

Section 144Section 147Section 148(2)Section 151Section 68

that the appellant had not cared to file his return of income for the year, the AO formed a prima-facie belief of escapement of income from taxation and, thereafter, assumed the jurisdiction to assess the appellant under the provisions of section 147 after following the due formalities in this

ITO, Ward-24(1), New Delhi vs. Soumya Tradecom Pvt Ltd (Erst. Soumya Infratech (P)Ltd.), Aligarh

In the result, the appeal of revenue is dismissed

ITA 1095/DEL/2021[2011-12]Status: DisposedITAT Delhi18 Jul 2023AY 2011-12

Bench: Shri Chandra Mohan Garg & M.Balaganeshassessment Year: 2011-12 Ito, Ward-24(1), New Delhi M/S Soumya Tradecom Pvt. Ltd., (Erst. Soumya Infratech (P) Ltd.,) Vs. Room No. 91, Devika Tower, Nehru Place, South Delhi, Delhi 110019 Pan Aalcs 1040 G (Appellant) (Respondent) For Assessee : Shri Sunil Kuamr Gupta, Ca Revenue For : Shri Raghunath, Sr. Dr Date Of Hearing : 04.05.2023 Date Of Pronouncement : 18.07.2023 Order Per Chandra Mohan Garg, J.M. This Appeal Has Been Filed Against The Order Cit(A)-28, New Delhi Dated 07.07.2020 For A.Y. 2011-12. 2. The Grounds Have Been Raised By The Revenue Are As Follows:- 1. "Whether, On The Facts & Circumstances Of The Case & Law, The Ld. Cit(A) Is Justified In Deleting The Addition Of Rs. 4,97,14,844/- Made On Account Of Share Application Mony & Share Capital." 2. "The Ld. Cit(A) Has Failed To Take Notice Of The Reason Recorded Wherein The Then Ao Had Mentioned Amount Of Rs. 4,43,84,8441- & While Framing Of Reason, The Ao Had Mentioned Escapement Of Income At Least Of Rs. 1,00,000/- Which Has Broader Prospective. 3. "The Ld. Cit(A) Has Failed To Appreciate That "Approved" Connotes That Competent Authority Has Read & Understood Fully The Proposal Proposed By Ao & He Is Satisfied That The Case Is Fir For Reopening Us 148 Of The I.T. Act." 4. "The Ld. Cit(A) Has Failed To Appreciate The Bogus Nature Of Transactions As The Assessee Company Did Not Provide Relevant Documents Before A To Establish The Genuineness Of The Transactions So Undertaken." 5. The Ld. Cit(A) Has Failed To Appreciate That Onus Of Proving Transaction As Bogus Nature On Ao Comes Only After Discharge Of Onus By Assessee By Giving All Relevant Documents Which Assessee Failed To Discharge During Assessment Proceedings. Application Of Revenue Seeking Condonation Of Delay Of 255 Days.

For Appellant: Shri Sunil Kuamr Gupta, CA

Section 151

recorded wherein the then AO had mentioned amount of Rs. 4,43,84,8441- and while framing of reason, the AO had mentioned escapement of income at least of Rs. 1,00,000/- which has broader prospective. 3. "The Ld. CIT(A) has failed to appreciate that "Approved" connotes that ... recorded wherein the then AO had mentioned amount of Rs. 4,43,84,844/- and while framing of reason, the AO had mentioned escapement of income at least of Rs. 1,00,000/- which has broader prospective. He further submitted that the Ld. CIT(A) has failed to appreciate that

Shri Khandelwal Diamonds Private Limited, Jaipur vs. DCIT, Circle 1, Jaipur

In the result, appeal of the assessee is allowed

ITA 245/JPR/2023[2014-15]Status: DisposedITAT Jaipur18 Jul 2023AY 2014-15

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

For Appellant: Shri Mukesh Khandelwal (C.A.)For Respondent: Shri C.P. Meena (Addl.CIT) a

Section 132(4)Section 142(1)Section 143(2)Section 143(3)

claimed as deduction under Chapter-Ill or under Chapter VI-A of the Income-tax Act. (vi) where there is information regarding escapement of income. 11 Shri Khandelwal Diamonds Pvt. Ltd. In this case, appellant's case was selected for manual scrutiny on the basis of information that a search ... claimed as deduction under Chapter III or under Chapter VI-A of the Income-tax Act; (vi) where there is information regarding escapement of income. E. The rate of profit as a percentage of turnover would be reviewed annually on the basis of revenue generation and results of scrutiny

M/S Blue City Township & Colonizers, Amritsar vs. The Income Tax Officer, Amritsar

ITA 90/ASR/2017[2009-10]Status: DisposedITAT Amritsar14 Jul 2023AY 2009-10

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

Section 147Section 148Section 151Section 234ASection 69

that at the initial stage, what is required is reason to believe, and the AO is not required to establish or compute the 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 ... income that escaped assessment.” 13. Per contra, the ld. Addl. CIT-DR submitted that it was a case of deemed escapement of income as per clause (b) to (Explanation (2) u/s 147) and the satisfaction of the Joint Commissioner u/s 151 of the Act and not of the Commissioner

Spectrum Infonet Pvt. Ltd., Raigarh vs. Pr. Commissioner of Income Tax (Central), Bhopal

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

ITA 34/RPR/2022[2011-12]Status: DisposedITAT Raipur14 Jul 2023AY 2011-12

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita Nos. 33 & 34/Rpr/2022 "नधा"रण वष" / Assessment Years : 2010-11 & 2011-12 Spectrum Infonet Private Limited 601, South Gajanandpuram Colony, Kotra Road, Raigarh (C.G.)-496001 Pan : Aalcs5656E .......अपीलाथ" / Appellant बनाम / V/S. The Pr. Commissioner Of Income Tax (Central), Bhopal ……""यथ" / Respondent

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri V.K Singh, CIT-DR

Section 147Section 263

which is to be treated as beneficiary. Considering the above facts I am believed & satisfy that there was an escapement of income of Rs.21,20,000/-. Proceedings u/s 147 of the I. T. Act, 1961 should be initiated. SD/- (SAGAR KANTI SARKAR) ITO, Ward-15(2), Kolkata 5 Spectrum Infonet

Spectrum Infonet Pvt. Ltd., Raigarh vs. Pr. CIT (Central), Bhopal

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

ITA 33/RPR/2022[2010-11]Status: DisposedITAT Raipur14 Jul 2023AY 2010-11

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri V.K Singh, CIT-DR

Section 147Section 263

Satya Pal, Gurgaon vs. ITO, Gurgaon

In the result all the three appeals of the assessees are partly allowed, as indicated above

ITA 3024/DEL/2017[2010-11]Status: DisposedITAT Delhi13 Jul 2023AY 2010-11

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasadआ.अ.सं .I.T.A No. 3024/Del/2017 िनधा"रण वष"/Assessment Year: 2010-11 Shri Satya Pal, Income Tax Officer, बनाम S/O. Late Maha Singh, Ward : 4 (1) Vs. Vill. & P.O. Nakhrola, Tehsil Gurgaon. Manesar, Distt. Gurgaon, Haryana – 122 001. Pan No. Aabpy6152A A N D आ.अ.सं .I.T.A No. 3022/Del/2017 िनधा"रण वष"/Assessment Year: 2010-11 Shri Satyabir Singh, Income Tax Officer, बनाम S/O. Late Maha Singh, Ward : 4 (1) Vs. Vill. & P.O. Nakhrola, Tehsil Gurgaon. Manesar, Distt. Gurgaon, Haryana – 122 001. Pan No. Aacpy7890A A N D आ.अ.सं .I.T.A No. 3023/Del/2017 िनधा"रण वष"/Assessment Year: 2010-11 Shri Rati Ram, Income Tax Officer, बनाम S/O. Late Maha Singh, Ward : 4 (1) Vs. Vill. & P.O. Nakhrola, Tehsil Gurgaon. Manesar, Distt. Gurgaon, Haryana – 122 001. Pan No. Aaopy3440Q अपीलाथ"/ Appellants ""थ"/ Respondents

For Appellant: Shri K. Sampath, Advocate; &

Section 143(3)Section 147Section 234ASection 253Section 54B

charge of Other Ranks of the Army Personnel. If at all any action had to be taken against the Appellant for any alleged escapement of income then it was for the Army Salary Circle AO holding authority over the Appellant who could have done so. Clearly the Income-tax Officer ... issued the notice u/s 148 of the Act to the Appellant on 30.03.2015 after having recorded a satisfaction as to the alleged escapement of income of the Appellant. The ITO Ward 3(5) Gurugram does not seem to have made any inquiry or the relevant issues before issuing a notice

Rati Ram, Gurgaon vs. ITO, Gurgaon

In the result all the three appeals of the assessees are partly allowed, as indicated above

ITA 3023/DEL/2017[2010-11]Status: DisposedITAT Delhi13 Jul 2023AY 2010-11

For Appellant: Shri K. Sampath, Advocate; &

Section 143(3)Section 147Section 234ASection 253Section 54B