“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 24(2), Mumbai vs. Kailash Chandra Gupta HUF, Mumbai

In the result, the appeal by the Revenue for the assessment year 2011–

ITA 2339/MUM/2021[2011-12]Status: DisposedITAT Mumbai10 Nov 2022AY 2011-12

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Rajesh SanghviFor Respondent: Shri Tejinder Pal Singh

Section 10(38)Section 143Section 147Section 148Section 250

fact that reopening of assessment was based on new material and evidences available with the assessing officer to arrive at the reason indicating escapement of income". 2 "On the facts and in the circumstances of the case and in law, the Ld. CIT(A), NFAC was correct in quashing ... paragraph, relevant details about the alleged bogus transaction of the assessee were identified. In the third paragraph, the AO has clearly identified the escapement of income and in the last paragraph, the satisfaction of the AO is recorded. Thus, there was a ‘tangible material’ on which the AO applied

Income Tax Officer 24(2) (1), Mumbai vs. Kailash Chandra Gupta, Mumbai

In the result, the appeal by the Revenue for the assessment year 2011–

ITA 2338/MUM/2021[2012-13]Status: DisposedITAT Mumbai10 Nov 2022AY 2012-13

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Rajesh SanghviFor Respondent: Shri Tejinder Pal Singh

Section 10(38)Section 143Section 147Section 148Section 250

Rajdeep Marketing Pvt. Ltd., Mumbai vs. ITO, WD. 3(3)(1), Mumbai

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

ITA 2053/MUM/2022[2012-13]Status: DisposedITAT Mumbai07 Nov 2022AY 2012-13

Section 147Section 148Section 194A

Supreme Court dealt with the following question of law in the course of its judgment:— "Where an item unconnected with the escapement of income has been concluded finally against the assessee, how far in reassessment on an escaped item of income is it open to the assessee to seek

DCIT, Chennai vs. B.V.Reddy Enterprises Pvt Ltd., Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 1914/CHNY/2019[2010-11]Status: DisposedITAT Chennai04 Nov 2022AY 2010-11

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. No.1914/Chny/2019 िनधा"रण वष"/Assessment Year: 2010-11 The Deputy Commissioner Of Vs. M/S. B.V. Reddy Enterprises Pvt. Ltd., Income Tax, New No. 21/Old No. 10A, First Floor, Corporate Circle 1(2), Umayal Road, Kilpauk, Chennai 600 034. Chennai 600 010. [Pan:Aaccn2252L] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri G. Johnson, Addl. Cit ""थ" की ओर से/Respondent By : Shri S. Sridhar, Advocate सुनवाई की तारीख/ Date Of Hearing : 15.09.2022 घोषणा की तारीख /Date Of Pronouncement 04.11.2022 : आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Revenue Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 1, Chennai, Dated 29.03.2019 Relevant To The Assessment Year 2010-11. 2. Facts Are, In Brief, That The Assessee Filed Its Return Of Income For The Assessment Year 2010-11 On 13.10.2010 Admitting Total Income Of ₹.15,50,25,060/-. The Assessing Officer Has Completed The Assessment Under Section 143(3) Of The Income Tax Act, 1961 [“Act” In Short] Dated

For Appellant: Shri G. Johnson, Addl. CITFor Respondent: Shri S. Sridhar, Advocate

Section 14Section 143(2)Section 143(3)Section 147Section 148

section 147 of the Act by issuing notice under section 148 of the Act dated 27.02.2017 on the ground that there is an escapement of income. On the request of the assessee, reasons for reopening were furnished by the Assessing Officer. Further, notice under section ... total income filed along with the original return of income. Therefore, the AO has not found out any new material regarding the escapement of income for the issue of notice u/s.148 of the Act. In order to bolster its submissions, the appellant furnished copies of the return of income submitted

DCIT 3(3)(1), Mumbai vs. Satya Securities Ltd, Mumbai

Accordingly, the appeal by the Revenue is dismissed, while the petition under Rule 27 of ITAT Rules, 1963, as filed by the assessee for the assessment year 2008–09, is allowed

ITA 6673/MUM/2016[2008-09]Status: DisposedITAT Mumbai04 Nov 2022AY 2008-09

Bench: Shri M. Balaganesh & Shri Sandeep Singh Karhail

For Appellant: Shri A.K. Tibrewal a/wFor Respondent: Shri P.R. Mane a/w

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 68

assessment. However, in the present case, the nexus between the alleged material, i.e. the investigation report of the CBI, and the belief of escapement of income from assessment under section 147 of the Act is missing and thus renders the reasons to be reasons to suspect for making further investigation

DCIT 3(3)(1), Mumbai vs. Satya Securities Ltd, Mumbai

Accordingly, the appeal by the Revenue is dismissed, while the petition under Rule 27 of ITAT Rules, 1963, as filed by the assessee for the assessment year 2008–09, is allowed

ITA 6669/MUM/2016[2007-08]Status: DisposedITAT Mumbai04 Nov 2022AY 2007-08

Bench: Shri M. Balaganesh & Shri Sandeep Singh Karhail

For Appellant: Shri A.K. Tibrewal a/wFor Respondent: Shri P.R. Mane a/w

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 68

The Dy CIT (It)-Circle-3(3)(2), Mumbai vs. Manish Vijay Mehta, Mumbai

In the result, appeals of the learned Assessing Officer and CO of the assessee for both the years are dismissed

ITA 494/MUM/2021[2006-07]Status: DisposedITAT Mumbai31 Oct 2022AY 2006-07

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Ajay Singh, ARFor Respondent: Shri Soumendu Kumar Dash, DR

Section 148

interalia held the AO has power to re-open the assessment provided there is tangible material" to come to conclusion that there was escapement of income from assessment. Reason to believe' has to be construed in logical term'. A.Y. 06-07& 07-08 Manish Vijay Mehta & Urvi Manish Mehta ... belief i.e. there must be a live link between material coming the notice of the Assessing Officer and the formation of belief regarding escapement of income. -ITO v. Lakhmani Merwal Das [1976] 103 ITR 437(SC) [Pg 436-437] - Nivi Trading Limited

The Dy CIT (It)-Circle-3(3)(2), Mumbai vs. Manish Vijay Mehta, Mumbai

In the result, appeals of the learned Assessing Officer and CO of the assessee for both the years are dismissed

ITA 493/MUM/2021[2007-08]Status: DisposedITAT Mumbai31 Oct 2022AY 2007-08

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Ajay Singh, ARFor Respondent: Shri Soumendu Kumar Dash, DR

Section 148

The Dy CIT (It)-Circle-3(3)(2), Mumbai vs. Urvi Manish Mehra, Mumbai

In the result, appeals of the learned Assessing Officer and CO of the assessee for both the years are dismissed

ITA 492/MUM/2021[2007-08]Status: DisposedITAT Mumbai31 Oct 2022AY 2007-08

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Ajay Singh, ARFor Respondent: Shri Soumendu Kumar Dash, DR

Section 148

The Dy CIT (It)-Circle-3(3)(2), Mumbai vs. Urvi Manish Mehta, Mumbai

In the result, appeals of the learned Assessing Officer and CO of the assessee for both the years are dismissed

ITA 491/MUM/2021[2006-07]Status: DisposedITAT Mumbai31 Oct 2022AY 2006-07

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Ajay Singh, ARFor Respondent: Shri Soumendu Kumar Dash, DR

Section 148

Dy CIT, CC-3(3)(1), Mumbai vs. M/S Reliance Industries Holding P. Ltd., Mumbai

In the result, both the cross-objection are allowed, and both the appeals are dismissed as infructuous

ITA 126/MUM/2021[2010-11]Status: DisposedITAT Mumbai31 Oct 2022AY 2010-11

Section 92A(2)(j)

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 for an inquiry which

Dy CIT, CC-3(3)(1), Mumbai vs. M/S Reliance Industries Holding P. Ltd., Mumbai

In the result, both the cross-objection are allowed, and both the appeals are dismissed as infructuous

ITA 125/MUM/2021[2008-09]Status: DisposedITAT Mumbai31 Oct 2022AY 2008-09

Section 92A(2)(j)

M/S Radiance Exim Pvt Ltd., Mumbai vs. ITO 8 (1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 6635/MUM/2019[2007-08]Status: DisposedITAT Mumbai31 Oct 2022AY 2007-08

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.6635/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2007-08) M/S. Radiance Exim Pvt. बिधम/ Ito-8(1)(1) Ltd. Room No.621A, 6Th Floor, Vs. Shiv Chawl No.2, Shiv Aayakar Bhavan, M. K. Sagar Sejar Samiti, Tanaji Road, Mumbai-400020. Nagar, Kurar Village, Malad (E), Mumbai, Maharashtra, 400097. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabcr4706L (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Ashok Bansal Revenue By: Smt Mahita Nair (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 21/09/2022 घोषणा की तारीख /Date Of Pronouncement: 31/10/2022 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 (Appeals)-21, Mumbai Dated 31.07.2019 For The Assessment Year 2007-08. 2. At The Outset, The Ld. Ar Of The Assessee Has Challenged The Legality/Validity Of The Action Of Ao To Re-Open The Assessment Of Ay 2007-08 U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”) By Issuance Of Notice U/S 148 Of The Act Dated 26.03.2014 & Consequent Passing Of Re-Assessment Order Vide Order Dated 20.03.2015, Which According To The Ld. Ar, Is Bad In Law For Several Reasons (Infra). According To The Ld. Ar, The Ao Did Not Had The Requisite Jurisdiction To Re-Open The Assessment U/S 147 Of The Act Because The Reasons Recorded By The Ao Dated 18.03.2014 (Refer Page

For Appellant: Shri Ashok BansalFor Respondent: Smt Mahita Nair (Sr. AR)

Section 142(1)Section 147Section 148

According to the Ld. AR, the fundamental jurisdictional requirement for re-opening an assessment was that the AO had “reason to believe escapement of income”. According to him, it is settled law that “reason to believe” postulates foundation based on information and belief based on reason. And even if, there ... this case, according to Ld. AR, the AO after receipt of information from the DGIT(Inv.) has jumped into conclusion that there is escapement of income which fact is evident from the perusal of AO’s letter wherein the reasons are recorded dated 12.08.2014 (refer page 18 PB) in which

Ashok Jasraj Jain, HUF, Mumbai vs. ACIT-19(1), Mumbai

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

ITA 5609/MUM/2019[2014-15]Status: DisposedITAT Mumbai31 Oct 2022AY 2014-15

Bench: Shri Kuldip Singh () & Shri Om Prakash Kant () Assessment Year: 2014-15 Ashok Jasraj Jain, Huf, Acit-19(1), 45/12, Rajkotwala Bldg., 2Nd Floor, Matru Mandir Bldg., 1St Carpenter Street, C.P. Tank, Vs. Tardeo Road, Mumbai-400 004. Mumbai-400 007. Pan No. Aaahj 0191 D Appellant Respondent Assessee By : Mr. Mehul Shah, Ar Revenue By : Mr. Manoj Sinha, Dr Date Of Hearing : 23/08/2022 Date Of Pronouncement : 31/10/2022

For Appellant: Mr. Mehul Shah, ARFor Respondent: Mr. Manoj Sinha, DR

Section 143Section 143(1)Section 148

Officer to come to reasonable belief that there has been any Officer to come to reasonable belief that there has been any escapement of income on the ground that the modifications done in escapement of income on the ground that the modifications done in escapement of income on the ground

Rajarathnam'S Jewels, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-1(1), Bangalore

In the result, appeal by the Assessee is dismissed

ITA 370/BANG/2022[2013-14]Status: DisposedITAT Bangalore28 Oct 2022AY 2013-14

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahuassessment Year : 2013-14

For Appellant: Shri. H. Anil Kumar, CAFor Respondent: Shri. K. R. Narayana, Addl. CIT(DR)(ITAT), Bengaluru

Section 133ASection 143(3)

first survey and therefore the same fact which emanated from the second survey, cannot be the basis to entertain belief regarding escapement of income and therefore initiation of reassessment proceedings u/s.147 of the Act were held to be bad in law. The tribunal specially observed that the merits

Parthiban, Chennai vs. ITO Non Corporate Ward-7(2), Chennai

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

ITA 562/CHNY/2020[2014-15]Status: DisposedITAT Chennai21 Oct 2022AY 2014-15

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 562/Chny/2020 िनधा"रण वष"/Assessment Year:2014-15 Shri Parthiban, Vs. The Income Tax Officer, Plot No. 83-A, Door No. 9, Thiruvallur Non Corporate Ward 7(2), Street, Jagadhambigai Nagar, Chennai 600 034. Chennai 600 050. [Pan:Biipp0005R] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri G. Sitaraman, Advocate ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 23.08.2022 घोषणा की तारीख /Date Of Pronouncement : 21.10.2022 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 7, Chennai, Dated 17.01.2020 Relevant To The Assessment Year 2014-15. 2. Facts Are, In Brief, That The Assessee Has Filed His Return Of Income For The Assessment Year 2014-15 On 14.07.2014 Returning Nil Income & Agricultural Income Of ₹.43,00,530/-. The Case Was Selected Through Cass & The Assessment Was Completed Under 2

For Appellant: Shri G. Sitaraman, AdvocateFor Respondent: Shri AR V Sreenivasan, Addl. CIT

Section 142(1)Section 143(2)Section 143(3)Section 148Section 2(1)(A)

assessment was reopened on the ground that the selling of Silver Oakes, fire woods are not agricultural income and there is an escapement of income and thereby, reopened the assessment is not correct in accordance with law. In the original assessment, the Assessing Officer has examined all the details ... wood at ₹.16,90,312/- are not an agricultural income and therefore, the assessment was reopened on the ground that there is an escapement of income. We find that during the course of original assessment 5 I.T.A. No.562/Chny/20 proceedings, the Assessing Officer issued notice under section

ACIT-Circle-15(1)(2), Mumbai vs. M/S. D A Finvest P. Ltd., Navi Mumbai

Appeal is allowed

ITA 1296/MUM/2021[2015-16]Status: DisposedITAT Mumbai21 Oct 2022AY 2015-16

Bench: Shri Aby T Varkey & Shri Amarjit Singhacit, Circle-15(1)(2) Vs. M/S D.A. Finvest Pvt. Room No. 483, 4 Th Floor, Ltd., 65, Mahavir Centre, Aayakar Bhavan, 4Th Floor, Sector 17, Dbc, M.K. Road, Vashi, Navi Mumbai Mumbai – 400 020 400 075 स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aabcd0420B Appellant .. Respondent Appellant By : Smt. Mahita Nair Respondent By : None Date Of Hearing 17.10.2022 Date Of Pronouncement 21.10.2022 आदेश / O R D E R Per Amarjit Singh (Am):

For Appellant: Smt. Mahita NairFor Respondent: None

Section 142(1)Section 143(2)Section 143(3)Section 36(1)(vii)

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

DCIT 13(1)(2), Mumbai vs. Pebble Bay Developers P.Ltd, Mumbai

In the result, appeal of the In the result, appeal of the Revenue is allowed for statistical purposes, is allowed for statistical purposes, whereas the application of the assessee under rule 27 is ...

ITA 5744/MUM/2017[2008-09]Status: DisposedITAT Mumbai21 Oct 2022AY 2008-09

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Assessment Year: 2008-09 Dy. Commissioner Of Income- M/S Pebble Bay Developers Tax-13(1)(2), Pvt. Ltd., 2Nd Floor, Room No. 218, Vs. Raheja Chambers, Linking Aayakar Bhavan, M.K. Road, Road, Main Avenue Santacruz Mumbai-400020. (West), Mumbai-400054. Pan No. Aaccg 1645 E Appellant Respondent Revenue By : Ms. Vranda Matkari, Dr Assessee By : Mr. Nishit Gandhi, Ar Date Of Hearing : 26/08/2022 Date Of Pronouncement : 21/10/2022

For Appellant: Mr. Nishit Gandhi, ARFor Respondent: Ms. Vranda Matkari, DR

Section 143(1)Section 148Section 69C

believe; to suspect and not reason to believe; (f) the reassessment is initiated on the the reassessment is initiated on the assumption of escapement of income; escapement of income; (g) reopening is on the mere borrowed reopening is on the mere borrowed satisfaction of the investigation wing without any application ... that any expenditure has not been established that any expenditure was incurred in cash and incurred in cash and therefore whole assumption of escapement of income is based merely on therefore whole assumption of escapement of income is based merely on therefore whole assumption of escapement of income is based

Sidhesh Films P. Ltd., Mumbai vs. ITO-16(1)(4), Mumbai

In the result, appeal of the assessee is dismissed

ITA 132/MUM/2021[2010-11]Status: DisposedITAT Mumbai20 Oct 2022AY 2010-11

Section 143(1)Section 143(3)Section 147Section 148Section 151Section 68Section 69A

survey that took place in office of proprietary concern of the director in March 2009 giving him a reason to believe of an escapement of income in future. Without prejudice to the above 2. The Ld CIT(A) erred in facts circumstances of the case and in law in dismissing

ACIT Central Circle 2(1), Chennai vs. Cavinkare Pvt. Ltd., Chennai

Appeal stand allowed

ITA 1076/CHNY/2018[2008-09]Status: DisposedITAT Chennai19 Oct 2022AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri T. Banusekar (C.A) – Ld. ARFor Respondent: Shri ARV Sreeenivasan (Addl. CIT) –Ld. DR

Section 143(3)Section 147Section 148Section 149Section 151Section 36(1)(iii)

truly all material facts for the assessment. Thus, prima facie, there was bonafide reason for the AO to believe that there was escapement of income to invoke the provisions of sec. 148 of the Act to re-open the assessment. 2.3 The ld. CIT(A) ought to have appreciated that ... approval as required under law was obtained and therefore, the reopening was perfectly valid. It was also submitted that subsequent scrutiny proceedings indicated escapement of income in the hands of the assessee which constitute tangible material and therefore, the findings given in the impugned order were incorrect