“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

Rahul Rajnikant Parikh, Mumbai vs. ITO Intl Tax Circle 3(3) (2), Mumbai

In the result, the appeal is allowed for statistical purposes

ITA 425/MUM/2022[2003-04]Status: DisposedITAT Mumbai26 Aug 2022AY 2003-04

Section 139Section 143(3)Section 147Section 22Section 34Section 34(1)(a)

Supreme Court in a number of judgments that assessment made under section 148/143(3) without the valid formation of belief as to the escapement of income is void ab initio or a nullity. For this purpose, it is desirable to refer to another Supreme Court decision in the case

Kalpesh Ramniklal Jhaveri, Mumbai vs. ITO Intl Tax Cir 3(3), Mumbai

In the result, the appeal is allowed for statistical purposes

ITA 424/MUM/2022[2004-05]Status: DisposedITAT Mumbai26 Aug 2022AY 2004-05

Section 139Section 143(3)Section 147Section 22Section 34Section 34(1)(a)

Kalpesh Rashmikant Jhaveri, Mumbai vs. ITO It, Circle- 3(3)(2), Mumbai

In the result, the appeal is allowed for statistical purposes

ITA 423/MUM/2022[2003-04]Status: DisposedITAT Mumbai26 Aug 2022AY 2003-04

Section 139Section 143(3)Section 147Section 22Section 34Section 34(1)(a)

M/S Edelweiss Rural & Corporate Services Private Limited, Mumbai vs. JCIT Central Circle-1(2), Mumbai

In the result, appeal of the assessee for A

ITA 1041/MUM/2022[2015-16]Status: DisposedITAT Mumbai26 Aug 2022AY 2015-16

Section 127(2)Section 133ASection 143(1)Section 143(3)Section 147

account of transactions with Aster Commodities DMCC for the year under consideration works out to Rs.91.60 crores approximately. Thus it has caused escapement of income on this account to that extent. Further, the Appraisal Report has unraveled notable surreptitious and convoluted transactions of the Assessee Company, inter-alia indicating price ... DCIT, Central Circle-1 (1), Mumbai. 3.2. From the perusal of the aforesaid reasons, it is evident that the ld. AO had alleged escapement of income in the hands of the assessee for the A.Y.2012-13 in respect of import of pulses from Aster DMCC, Dubai which had allegedly resulted

M/S Edelweiss Rural & Corporate Services Private Limited (Earlier Know As M/S Edelweiss Commodities Services Limited), Mumbai vs. ACIT Central Circle-1(2), Mumbai

In the result, appeal of the assessee for A

ITA 1040/MUM/2022[2012-13]Status: DisposedITAT Mumbai26 Aug 2022AY 2012-13

Section 127(2)Section 133ASection 143(1)Section 143(3)Section 147

Hindustan Construction Company, Mumbai vs. Pr. CIT-6, Mumbai

Appeal is allowed

ITA 969/MUM/2021[2011-12]Status: DisposedITAT Mumbai25 Aug 2022AY 2011-12

For Appellant: Shri H. P. MahajaniFor Respondent: Shri Mehul Jain

Section 115JSection 143(3)Section 147Section 263Section 263(2)

order dated 27-12-2007. The order dated 27-12-2007 was passed after the assessment was reopened on the ground of an escapement of income under section 147 and an order of reassessment was passed by which the claim under section 72A came to be disallowed. The submission that

Dr. Shailendra Singh (Alias Shailendra Singh), Mumbai vs. DCIT CC 2 (3), Mumbai

In the result, appeals filed by the assessee are allowed

ITA 7520/MUM/2019[2007-08]Status: DisposedITAT Mumbai25 Aug 2022AY 2007-08

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Shri Snehal ShahFor Respondent: Shri Niraj Rajan Samal

Section 143(2)Section 143(3)Section 147Section 148Section 149Section 151Section 153A

which is form for recording reasons for initiating the proceedings u/s. 147 of the Act in which Assessing Officer has taken approval for escapement of income for ₹.22 lakhs. And the reasons recorded and supplied by the Assessing Officer exactly similar and 9 ITA.Nos. 7519 & 7520/MUM/2019

Dr Pushpa Singh (Alias Pushpa Singh), Mumbai vs. DCIT CC 2 (3), Mumbai

In the result, appeals filed by the assessee are allowed

ITA 7519/MUM/2019[2007-08]Status: DisposedITAT Mumbai25 Aug 2022AY 2007-08

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Shri Snehal ShahFor Respondent: Shri Niraj Rajan Samal

Section 143(2)Section 143(3)Section 147Section 148Section 149Section 151Section 153A

Shri Amit Mangilal Jain, Mumbai vs. ACIT, - 33(1), Mumbai

In the result, the appeals filed by the assessee are dismissed and the appeals filed by the revenue are allowed for statistical purposes

ITA 3331/MUM/2019[2009-10]Status: HeardITAT Mumbai24 Aug 2022AY 2009-10

Bench: Shri Pramod Kumar & Shri Pavan Kumar Gadaleita No. 3331 & 3332/Mum/2019 (A.Ys: 2009-10 & 2010-11) Shri Amit Mangilal Jain Vs. Acit – 33(1) 2Nd Floor, Arkade House, 103, 1St Floor, Atmaram Sawnt Marg, Eastern House, Kandivali (E), Nariman Point, Mumbai – 400101. Mumbai – 400021. Pan/Gir No. : Aabpj0925G Appellant .. Respondent

For Appellant: Shri Naresh JainFor Respondent: Shri Krishna Kumar.DR

Section 131Section 143(2)Section 143(3)Section 147Section 148Section 153C

dealing exclusively in the search cases and whereas the provisions of section 147 of the Act are invoked to all the types of escapement of income were the A.O. has recorded the satisfaction and has reason to believe. The Ld.DR submitted the relevant portion of statement of Shri Akshay Doshi

Deputy Commissioner of Income Tax Circle-6(2)(1), Bangalore vs. Sri C Gangadhara Murthy, Bangalore

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 2400/BANG/2018[2012-13]Status: DisposedITAT Bangalore16 Aug 2022AY 2012-13

Bench: Shri N.V. Vasudevan & Shri Laxmi Prasad Sahuthe Dy. Commissioner Of Vs Shri C. Gangadhara Murthy Income-Tax, No. 322, 3Rd A Corss, 2Nd Block Circle - 6(2)(1) 3Rd Stage, Basaveshwaranagar Bangalore . Bangalore 560079. Pan – Agipg 2668 N (Appellant) (Respondent)

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Sumer Singh Meena, CIT-DR

Section 142(1)Section 143(1)Section 143(2)Section 147Section 148Section 2

notice under Section 148 of the Act.. The reasons has been reproduced by the AO in his assessment order and there was escapement of income and the AO had strong reasons to believe that income of the assessee has escaped assessment within the meaning and scope of Section ... return was processed under Section 143(1) of the Act and the AO had sufficient reason for assessing escapement of income as per AIR and CIB information. He further submitted that once the provisions of Section 147 of the Act is satisfied then the AO can issue notice under Section

Khangaram K Dewasi, Mumbai vs. DCIT, CC-2(3), Mumbai

In the result, the appeal

ITA 2807/MUM/2018[2009-10]Status: DisposedITAT Mumbai05 Aug 2022AY 2009-10

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2008-09 & Assessment Year: 2009-10 & Assessment Year: 2010-11 Mr. Khangaram K. Dewasi, Prop. The Dcit, Central Circle-2(3), Of Shreenathji Metal & Alloys, Mumbai-21 Shop No. 5, Sultan Market, Opp. Vs. Ash Krishna Bldg. Andheri Ghatkoper Road, Sakinaka, Andheri (East), Mumbai-400072. Pan No. Aeepd 8897 C Appellant Respondent Assessee By : Mr. Bharat Kumar, Ar Revenue By : Mr. Ajeya Kumar Ojha, Dr Date Of Hearing : 28/06/2022 Date Of Pronouncement : 05/08/2022

For Appellant: Mr. Bharat Kumar, ARFor Respondent: Mr. Ajeya Kumar Ojha, DR

Section 143(3)Section 147Section 69

relevant information on which a reasonable person can make requisite belief a reasonable person can make requisite belief that income escaped that income escaped assessment as held by the Hon’ble Sup s held by the Hon’ble Supreme Court in the case reme Court in the case ACIT ... reopening, A.O. is not required plethora of case laws that at the time of reopening, A.O. is not required to establish the escapement of income. The existence of reason to establish the escapement of income. The existence of reason to establish the escapement of income. The existence of reason

Khangaram K. Dewasi, Mumbai vs. DCIT- CC-2(3), Mumbai

In the result, the appeal

ITA 2806/MUM/2018[2008-09]Status: DisposedITAT Mumbai05 Aug 2022AY 2008-09

For Appellant: Mr. Bharat Kumar, ARFor Respondent: Mr. Ajeya Kumar Ojha, DR

Section 143(3)Section 147Section 69

Khangaram K. Dewasi, Mumbai vs. DCIT, CC-2(3), Mumbai

In the result, the appeal

ITA 2805/MUM/2018[2010-11]Status: DisposedITAT Mumbai05 Aug 2022AY 2010-11

For Appellant: Mr. Bharat Kumar, ARFor Respondent: Mr. Ajeya Kumar Ojha, DR

Section 143(3)Section 147Section 69

Marve Beach Realtors Pvt Ltd., Mumbai vs. ITO 10 (3)(2), Mumbai

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

ITA 7830/MUM/2019[2002-03]Status: DisposedITAT Mumbai04 Aug 2022AY 2002-03

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blemarve Beach Realtors Pvt. Ltd., V. Income Tax Officer – 10(3)(2) Room No. 673 161-C, Mittal Tower, C-Wing Aayakar Bhavan, M.K. Road Rajni Patel Marg, Nariman Point Mumbai - 400020 Mumbai - 400021 Pan: Aaacm6031E (Appellant) (Respondent) Assessee By : Shri Narayan Atal Department By : Shri Suresh Periasamy

For Appellant: Shri Narayan AtalFor Respondent: Shri Suresh Periasamy

Section 143(2)Section 144Section 147Section 148

opinion. The Assessing Officer cannot reopen the assessment without there being clear cut material in his possession to substantiate his opinion of escapement of income. He submitted that other grounds of appeal won’t survive if this ground of appeal is allowed by the Bench. Further, he submitted that Assessing ... after 1-4-1989, the Assessing Officer has power to reopen, provided there is 'tangible material' to come to conclusion that there is escapement of income from assessment. Under the Direct Tax Laws (Amendment) Act, 1987, the Parliament not only deleted the words 'reason to believe' but also inserted

DCIT 15(2)(2), Mumbai vs. M/S Premier Supplies & Services P Ltd, Navi Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1384/MUM/2020[2011-12]Status: DisposedITAT Mumbai03 Aug 2022AY 2011-12

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – 15(2)(2) V. M/S. Premier Supplies & Services Pvt. Ltd., Office No. 47, Satya Sai Plaza Room No. 357, 3Rd Floor Sector-11, Plot No. 5 Aayakar Bhavan, M.K. Road Panvel, Navi Mumbai - 410206 Mumbai - 400020 Pan: Aaccg2655A (Appellant) (Respondent) Assessee By : None Department By : Shri Nihar Ranjan Samal

For Appellant: NoneFor Respondent: Shri Nihar Ranjan Samal

Section 143(3)Section 148Section 68

reason to believe that income chargeable to tax had escaped assessment Therefore, prima facie there was absence of link between information obtained and escapement of income chargeable to tax-Thus, reasons, as recorded, did not prima facie indicate reasons to believe that income chargeable to tax had escaped assessment-Contention ... 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

Rupal Kashyap Mehta, Mumbai vs. ITO, Ward 21 (3)(1), Mumbai

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

ITA 1235/MUM/2019[2011-12]Status: DisposedITAT Mumbai28 Jul 2022AY 2011-12

Bench: Shri Amit Shukla, Jm & Shri S. Rifaur Rahman, Am 1. आयकरअपीलसं./ I.T.A. No. 1235/Mum/2019 (ननधधारणवर्ा / Assessment Year: 2011-12) Ito, Ward 21(3)(1), Rupal Kahyap Mehta Income Tax Office, 26/27, A Wing, Ahuja Towers, बनाम/ Piramal Chambers, Dr. Raja Bhau Desai Road, Vs. Ss Roa Marg, Parel, Prabhadevi, Mumbai-400 025 Mumbai-400 012 स्थधयीलेखधसं./जीआइआरसं./ Pan No. Agrpm5338E (अपीलधथी/Appellant) (प्रत्यथी / Respondent) : अपीलधथीकीओरसे/ Appellant By : Shri Vinod Kumar Bindal, Ld. Ar प्रत्यथीकीओरसे/Respondent By : Smt. Mahita Nair, Ld. Dr सुनवधईकीतधरीख/ : 04.07.2022 Date Of Hearing घोर्णधकीतधरीख / : 28.07.2022 Date Of Pronouncement

For Appellant: Shri Vinod Kumar Bindal, LdFor Respondent: Smt. Mahita Nair, Ld. DR

Section 10(38)Section 127Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 153ASection 68

impugned proceedings at the threshold would have been void ab initio. Further, since, the impugned reassessment proceedings u/s 147 of the Act for escapement of income for the relevant year were already going on and the income-tax search on the assessee took place after 01/04/2017 on 06/10/2017, both

Yunicorn Synthetics Mills Pvt.Ltd., Mumbai vs. ITO 4(3)(3), Mumbai

In the result, appeal filed by the assessee is allowed for statistical purpose

ITA 6115/MUM/2018[2008-09]Status: DisposedITAT Mumbai28 Jul 2022AY 2008-09

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Ritika AgarwalFor Respondent: Hoshang B. Irani

Section 143(1)Section 143(3)Section 148

entries in the nature of purchase from the accommodation entry providers run and controlled by PKJ. At that stage, any established fact of escapement of income was not required as held by Hon'ble Jurisdictional High Court in the case of ECGC v. Addl. CIT (Writ Petition

Payal Enterprises P.Ltd, Mumbai vs. Asst CIT Cir 1, Mumbai

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

ITA 3702/MUM/2017[2010-11]Status: DisposedITAT Mumbai28 Jul 2022AY 2010-11

Bench: Shri Amit Shukla & Shri Amarjit Singhpayal Enterprises P. Ltd. Vs. The Acit, Circle 1 Cabin No. 2-A, 111, Mohan Plaza, 1 St Floor, Satyam Shopping Centre, Wayale Nagar, M.G. Road, Ghatkopar, Khadakpada, (East), Kalyan (West), Mumbai – 400 077 421301 स्थायी लेखा सं./ जीआइआर सं./ Pan/Gir No: Aabcp6567B Appellant .. Respondent

For Appellant: M.S. MathuriaFor Respondent: C.T. Mathews

Section 143(2)Section 143(3)Section 144Section 147Section 148Section 151

Department to the appellant for filing his objection, [c] that the assessing officer has provided his alleged recorded reasons and belief of escapement of income to the appellant for filing his objection: [d] that the assessing officer has obtained approval u/s 151 before initiation of impugned reassessment proceedings ... made by the assessing officer…… (a) solely relying on alleged information received from the Sales Tax Department for forming his alleged belief of escapement of income of the appellant without any investigation by him; (b) solely relying on alleged affidavits filed by certain persons before the Sales Tax Department without

M/S. Paras Plastic Processors, Mumbai vs. Income Tax Officer Ward-27(2)(5), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 5593/MUM/2019[2010-11]Status: DisposedITAT Mumbai27 Jul 2022AY 2010-11

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2010-11 M/S Paras Plastic Processors, Income Tax Officer 806/807, Ajit Nath, Ward-27(2)(5), Nilkantha Enclave, Ajit Nagar, Vs. Vashi, Opp. Shreyash Cinema, Navi Mumbai-400-703. Lbs Marg, Ghatkopar (West), Mumbai-400086. Pan No. Aaefp 8206 H Appellant Respondent

For Appellant: Mr. M. Subramanian, ARFor Respondent: Ms. Smita Nair, DR

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

that reasons recorded do not divulge any submitted that reasons recorded do not divulge any submitted that reasons recorded do not divulge any escapement of income. He submitted that the escapement of income. He submitted that the Assessing Officer Assessing Officer has only given two names of the parties ... given two names of the parties and nothing more. According to him, in absence of recording him, in absence of recording of any escapement of income, the any escapement of income, the reopening of the assessment is bad in law and being invalid, the reopening of the assessment

ITO-12(1)(1), Mumbai vs. Alaska India Marketing, Mumbai

In the result, both the appeals filed by the Revenue are dismissed

ITA 7444/MUM/2018[2009-10]Status: DisposedITAT Mumbai27 Jul 2022AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

For Appellant: Shri Rohit UdaniFor Respondent: Smt Sailaja Rai

Section 142(1)Section 143(3)Section 147Section 271(1)(c)

escaped income. Further, Assessing Officer initiated the proceedings u/s. 271(1)(c) of the Act on the above said escapement of income. 6. Aggrieved assessee preferred an appeal before the CIT(A) and before the Ld.CIT(A) assessee submitted detailed submissions that there is an arithmetic mistake in the credit ... Assessing Officer in his letter dated 24.02.2020. Therefore, it clearly indicates that the re-assessment initiated with the wrong notion that there is escapement of income and we observe that Ld.CIT(A) has rightly allowed the grounds raised by the assessee by deleting the additions made by the Assessing Officer