“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 Rajeev Nataraj Legal Heir of Late Shri P Nataraj, Bangalore vs. Income Tax Officer Ward-10(2), Bangalore

In the result appeal filed by assessee stands allowed

ITA 848/BANG/2019[2008-09]Status: DisposedITAT Bangalore31 Mar 2022AY 2008-09

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2008-09 Shri Rajeev Nataraj, L/H Of Late Shri P Nataraj, No. 63, 1St Cross, The Income Tax Udaya Nagar, Officer, Chikkalsandra, Off Ward 10(2), Uttarahalli Road, Bangalore. Vs. Bangalore – 560 061. Pan: Ahapn9475D Appellant Respondent Assessee By : Shri H. Siva Prasad Reddy, Ar : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 09-02-2022 Date Of Pronouncement : 31-03-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Order Dated 11/02/2019 Passed By The Ld.Cit(A)-3, Bangalore For Assessment Year 2008-09 On Following Grounds Of Appeal: “1. The Impugned Order Passed By The Learned Commissioner Of Income-Tax [Appeals] U/S 250 Of The Act & That Of The Order Of Assessment Passed By The Learned Assessing Officer Under Section 143[3] R/W 147 Of The Act To The Extent Which Is Against The Appellant Is Opposed To Law, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Appellant'S Case. 2. The Order Of Assessment Passed By The Learned Assessing Officer Under Section 143[3] R.W.S 147 Of The Act Is Bad In Law Since The Mandatory Conditions As Envisaged

For Appellant: Shri H. Siva Prasad Reddy, AR

Section 143Section 234Section 250Section 54

following Additional grounds: “ADDITIONAL GROUND NO.1 The learned AO ought to have appreciated that there was no material indicating escapement of income to justify the issue of Notice u/s 148. ADDITIONAL GROUND NO.2 There is no nexus between the material information available on record and the reasons recorded ... other words, at the initiation stage, what is required is ‘reason to believe’, based on tangible material but not the established fact of escapement of income. We also rely on the decisions of Hon’ble Supreme Court in case of ITO vs. Selected Dalutband Co.Pvt.Ltd., reported

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 270/MUM/2020[2012-13]Status: DisposedITAT Mumbai29 Mar 2022AY 2012-13

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

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

necessary for the Assessing Officer to conclusively arrive at a finding that there has been escapement of income. At the stage of issue of the notice the only requirement is to examine whether on the available material a reasonable person could form a reasonable view to believe that income chargeable

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 269/MUM/2020[2011-12]Status: DisposedITAT Mumbai29 Mar 2022AY 2011-12

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

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 268/MUM/2020[2010-11]Status: DisposedITAT Mumbai29 Mar 2022AY 2010-11

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

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Arvind Hanjarimal Jain, Mumbai vs. Asst CIT 31 (2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 267/MUM/2020[2009-10]Status: DisposedITAT Mumbai29 Mar 2022AY 2009-10

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

For Appellant: Shri Jain DixitFor Respondent: Shri Mehul Jain

Section 132Section 133(6)Section 139Section 143Section 143(2)Section 143(3)Section 148Section 154

Dy CIT-CC-6(3), Mumbai vs. M/S. Marathon Nextgen Realty Ltd, Mumbai

ITA 798/MUM/2021[2011-12]Status: DisposedITAT Mumbai25 Mar 2022AY 2011-12

Bench: Vikas Awasthy & Shri Prashant Maharishiआअसं. 797/मुं/2021 ("न. व. 2012-13 ) आअसं. 798/मुं/2021 ("न. व. 2011-12 ) आअसं. 799/मुं/2021 ("न. व. 2010-11) Dy. Commissioner Of Income Tax, Central Circle – 6(3), Room No.1926, 19Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ..... अपीलाथ" /Appellant बनाम Vs. M/S. Marathon Nextgen Realty Limited, Marathon Futurex Mafatlal Mill Compound, N.M.Joshi Marg, Lower Parel, Mumbai 400 013. Pan: Aaacp-8032-E ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri J.P. Bairagra With Ms. Rupa Nanda ""तवाद" "वारा/Respondent By : Shri C.T. Mathews सुनवाई क" "त"थ/ Date Of Hearing : 23/02/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 25/03/2022 आदेश/ Order Per Vikas Awasthy, Jm: These Three Appeals By The Revenue Are Directed Against The Orders Of Commissioner Of Income Tax(Appeals)-54, Mumbai [In Short ‘ The Cit(A)’], For The 2

For Appellant: Shri J.P. Bairagra with Ms. Rupa NandaFor Respondent: Shri C.T. Mathews

Section 147Section 148

Assessing Officer. 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. Reason must have live link with the formation of belief. 9.2 The Hon'ble Bombay High Court in the case of Trent

Dy CIT, CC-6(3), Mumbai vs. M/S. Marathon Nextgen Realty Ltd, Mumbai

ITA 797/MUM/2021[2012-13]Status: DisposedITAT Mumbai25 Mar 2022AY 2012-13

For Appellant: Shri J.P. Bairagra with Ms. Rupa NandaFor Respondent: Shri C.T. Mathews

Section 147Section 148

M/S. Satyam Realtors P. Ltd., Mumbai vs. Dy CIT CC-5(4)Dy CIT CC-5(4), Mumbai

In the result, appeal by the assessee stands partly allowed

ITA 552/MUM/2021[2013-14]Status: DisposedITAT Mumbai25 Mar 2022AY 2013-14

Bench: Shri Shamim Yahya

Section 147Section 148Section 234B

Distributors P. Ltd. (2019) 302 CTR (Guj) 676. The action u/s.147 is possible despite complete disclosure of material facts if there is any escapement of income in assessment proceedings-refer PrafulChunilcd Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange vs. ACIT ... inadvertence or a mistake committed by the original Assessing Officer, subsequently, while verifying the records Assessing Officer can start reassessment proceedings for escapement of income. Further, there is a legal proposition accepted by various Courts that reassessment proceeding is permissible even if the information is obtained after proper investigation from

Shri Rohinton Cyrus Malesra, Mumbai vs. The ITO -19(3) (1), Mumbai

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

ITA 1598/MUM/2021[2011-12]Status: DisposedITAT Mumbai25 Mar 2022AY 2011-12

Bench: Shri Prashant Maharishi & Shri Pavan Kumar Gadaleshri Rohinton Cyrus Vs. Ito – 19(3)(1) Malesra Matru Mandir, A-201, Simla House, Tardeo Opp L.D.Ruparel Marg Mumbai – 400007 Nepean Sea Road, Mumbai – 400026. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aagpm5502K Appellant .. Respondent Appellant By : Shri Anil Gala.Ar Respondent By : Shri Pavan Kumar Beerla.Dr Date Of Hearing 21.03.2022 Date Of Pronouncement 24.03.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals)-30, Mumbai Passed U/S 147 R.W.S 143(3) & 250 Of The Income Tax Act, 1961. The Assessee Has Raised The Following Grounds Of Appeal.

For Appellant: Shri Anil Gala.ARFor Respondent: Shri Pavan Kumar Beerla.DR

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

Income Tax Act, 1961 merely based on information received from sales tax department without forming independent belief with regard to escapement of income. Other ground 4) The Appellant craves, leave to add to, amend, alter or withdraw any of the above grounds of appeal before or at the time

Gm Overseas, New Delhi vs. ACIT Circle-48(1), New Delhi

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

ITA 1891/DEL/2020[2010-11]Status: DisposedITAT Delhi21 Mar 2022AY 2010-11

For Appellant: Shri Suresh Gupta, CAFor Respondent: Shri Hemant Gupta, Sr. DR

Section 131ASection 133ASection 143(3)Section 147

inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section ... clearly not the case here because the petitioner did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the failure

Tech Mahindra Ltd., Mumbai vs. ACIT, Circle - 2(3)(1), Mumbai

In the result, appeal by the assessee is allowed

ITA 6573/MUM/2019[2012-13]Status: DisposedITAT Mumbai17 Mar 2022AY 2012-13

Bench: Shri Vikas Awasthy & Shri Prashant Maharishiआअसं. 6573/मुं/2019 ("न. व. 2012-13 ) Tech Mahindra Limited, Gateway Building, Apollo Bunder, Mumbai – 400 001 Pan: Aaacm-3484-F ...... अपीलाथ" /Appellant बनाम Vs. Acit, Cir. 2(3)(1), Aaykar Bhavan, M.K.Road, Mumbai 400 020 ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri J.D.Mistri, Sr. Advocate ""तवाद" "वारा/Respondent By : Shri Rajesh Damor सुनवाई क" "त"थ/ Date Of Hearing : 20/12/2021 घोषणा क" "त"थ/ Date Of Pronouncement : 17/03/2022 आदेश/ Order Per Vikas Awasthy, Jm: 6573/Mum/2019 This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax(Appeals)-6, Mumbai [In Short 'The Cit(A)’] Dated 04/09/2019 For The Assessment Year 2012-13. 2. Shri J.D.Mistri, Sr.Advocate Appearing On Behalf Of The Assessee Submitted At The Outset That The Assessee Has Raised Additional Grounds Of 2 Appeal Assailing Jurisdiction Assumed By The Assessing Officer U/S. 147 Of The Income Tax Act,1961 ( In Short 'The Act') & Validity Of The Order Passed U/S. 143(3) R.W.S. 147 Of The Act. At This Stage He Would Be Confirning His Submissions On The Additional Grounds Raised.

For Appellant: Shri J.D.Mistri, Sr. AdvocateFor Respondent: Shri Rajesh Damor

Section 115JSection 143(3)Section 147Section 148Section 68

18/08/2021 after examining the facts held reopening of assessment as invalid. The facts in the impugned assessment year are identical. There is no escapement of income. The assessee has offered the income from foreign entities under the head ‘Business Income’, the same was accepted during the 5 assessment proceedings ... ought to be cancelled.” 6 5. The assessee has assailed reopening of assessment on the ground that there is no escapement of income and the overseas parties from whom the assessee had received the amount was offered to tax under the head ‘Business Income’ and the same was accepted

Printrade Issues India P. Ltd., Mumbai vs. ACIT - 7 (3)(2), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 1770/MUM/2020[2009-10]Status: DisposedITAT Mumbai16 Mar 2022AY 2009-10

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm Printrade Issues India Private The Asst. Commissioner Of Limited Income Tax, 7(3)(2) Gala No.17, Pragati Indus Aayakar Bhavan, Vs. Estate, 316, Nm Joshi Marg, Mumbai-400 004 Lower Parel, Mumbai-400 011 (Appellant) (Respondent) Pan No. Aaccp1550F Appellant By : Shri Mohan Makjija, Ar Respondent By : Shri V Tripathi, Dr Date Of Hearing: 10.01.2022 Date Of Pronouncement : 16.03.2022 O R D E R Per Prashant Maharishi, Am: 01. This Appeal Is Field By Assessee Against The Order Passed By The Commissioner Of Income-Tax (Appeals)-13, Mumbai Dated 17Th March, 2020, Wherein The Addition Made By The Learned Assessing Officer Of ₹14,15,549/- Was Upheld. This Is Only The Grievance In This Appeal.

For Appellant: Shri Mohan Makjija, ARFor Respondent: Shri V Tripathi, DR

Section 143(3)Section 147Section 148

hawala dealer by Sales Tax Department, Mumbai. Thus, the assessee inflated the above expenditure and suppressed the profit. Therefore, there was an escapement of income to the tune of ₹14,15,549/. Printrade Issues India Pvt. ltd.; AY 09-10 04. The learned Assessing Officer issued the notice

Sarita Dudheria, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore

In the result, all the three appeals filed by assessee stands partly allowed for statistical purposes for all the years under consideration

ITA 382/BANG/2020[2015-16]Status: DisposedITAT Bangalore15 Mar 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K.R. Pradeep & Ms. Girija

Section 10(38)

382/Bang/2020 5.4. In other words, at the initiation stage, what is required is ‘reason to believe’, but not the established fact of escapement of income. We also rely on the decisions of Hon’ble Supreme Court in case of ITO vs. Selected Dalutband Co.Pvt.Ltd., reported

Sarita Dudheria, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 1(2), Bangalore

In the result, all the three appeals filed by assessee stands partly allowed for statistical purposes for all the years under consideration

ITA 381/BANG/2020[2014-15]Status: DisposedITAT Bangalore15 Mar 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K.R. Pradeep & Ms. Girija

Section 10(38)

Sarita Dudheria, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 1(2), Bangalore

In the result, all the three appeals filed by assessee stands partly allowed for statistical purposes for all the years under consideration

ITA 380/BANG/2020[2013-14]Status: DisposedITAT Bangalore15 Mar 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K.R. Pradeep & Ms. Girija

Section 10(38)

Joint Commissioner of Income Tax, Ltu, Bengaluru vs. M/S. Vijaya Bank, Bengaluru

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

ITA 1834/BANG/2018[2014-15]Status: DisposedITAT Bangalore11 Mar 2022AY 2014-15

Bench: Shri George George K & Ms. Padmavathy Sassessment Year : 2014-15

For Appellant: Shri Ananthan, C.A &For Respondent: Shri Pradeep Kumar, CIT(DR)

Section 115JSection 143(3)Section 234DSection 36(1)(vii)Section 36(1)(viia)Section 36(2)(v)Section 37(1)(vii)

behalf of the Department. According to the Department, it is necessary to square off each individual account failing which there is likelihood of escapement of income from assessment. According to the Department, in cases where a borrower's account is written off by debiting P&L a/c and by crediting ... loans ITA Nos.1834/Bang/2018 & 1839/Bang/2018 Page 11 of 41 and advances account and not to the P&L a/c which would result in escapement of income from assessment. On the other hand, if bad debt is written off by closing the borrower's account individually, then the repaid amount in subsequent

Luxora Infrastructure P. Ltd., Mumbai vs. DCIT Central Circle-2(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1608/MUM/2020[201-12]Status: DisposedITAT Mumbai09 Mar 2022

Bench: Shri Shamim Yahya

Section 143(3)Section 154Section 234ASection 68

light of above overall discussion and eventuality of a situation, where, certain information comes to the notice of assessing officer regarding escapement of income in a broad perspective, a harmonious interpretation of 2nd proviso of section 153A would be that once the search takes place under section 132, the pending

Mysore Minerals Limited (Now Known As Karnataka State Minerals Corporation Limited), Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 4(1)(2), Bengaluru

In the result, both the appeals are allowed

ITA 465/BANG/2020[2014-15]Status: DisposedITAT Bangalore07 Mar 2022AY 2014-15

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 147Section 148

Hence after 1st April, 1989, AO has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. 9. The judgment of Full Bench of Karnataka High Court in Dell India ... after 1-4-1989, 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. Our view gets support from the changes made to section

Mysore Minerals Limited (Now Known As Karnataka State Minerals Corporation Limited), Bengaluru vs. Assistant Commissioner of Income Tax, Circle- 4(1)(2), Bengaluru

In the result, both the appeals are allowed

ITA 464/BANG/2020[2013-14]Status: DisposedITAT Bangalore07 Mar 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 147Section 148

ITO (It) 2 (1)(1), Mumbai vs. Shri. Sandeep Dhirajlal Dhakan, Mumbai

In the result, this appeal filed by the Revenue stands dismissed

ITA 6755/MUM/2019[2009-10]Status: DisposedITAT Mumbai01 Mar 2022AY 2009-10

Bench: Ao Without Any Reasonable Cause & Despite Being Given Sufficient Opportunities?" (B) "Whether On The Facts & In Circumstances Of The Case & In Law, The Action Of The Ld. Cit(A) In Accepting Additional Evidence Is Not Correct As Per Judgment Of The Delhi High Court In Case Of M/S. Manish Build Well (P) Ltd. (204Taxmann 106(Delhi) 2. "Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding That Addition U/S. 68 Of The I.T. Act, 1961 Cannot Be Made In This Case, Because The Ao Has Not Made Addition U/S. 68, But Has Made The Addition As An Unexplained Investment Which Is Subject Matter Of Section 69 Of The I.T. Act, 1 961 3. "Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding That The Source Of Investment Amounting To Rs. 25.37 Crs. In M/S. Rajesh Exports Ltd. By The Assessee Lies In Dubai On 2 Shri Sandeep Dhirajlal Dhakan

Section 142Section 142(1)Section 147Section 68Section 69

securities of M/s. Rajesh Exports to the tune of Rs, 25.37 Crores, the Assessing Officer had reason to believe that there is an escapement of Income and accordingly the case of the assessee was reopened U/s. 147 of the I.T. Act, 1961. Accordingly the Assessing Officer issued notices