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“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

Kakkabe vs. S Bank Limited, Kodugu

In the result, the appeal filed by the assessee stands allowed for statistical purposes

ITA 490/BANG/2021[2015-16]Status: DisposedITAT Bangalore28 Feb 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2015-16 M/S. Kakkabe Vssn Bank The Principal Ltd., Commissioner Of Main Road, Kakkabe, Income-Tax, Kodagu – 571 212. Mysore. Pan: Aaabk0958P Vs. Appellant Respondent Assessee By : None Revenue By : Shri Sumer Singh Meena, Cit I Date Of Hearing : 31-01-2022 Date Of Pronouncement : 28-02-2022 Order Per Beena Pillaipresent Appeal Arises Out Of Order Dated 06.03.2020 Passed By Ld.Pr.Cit, Mysore On Following Grounds Of Appeal: “1. The Impugned Order As Passed By The Hon'Ble Pr.Cit U/S 263 Of The Income-Tax Act, 1961 Is Arbitrary, Unjust & Illegal Under The Facts & Circumstances Of The Appellant Case. 2. On The Facts & Circumstances Of The Case & On Law, The Hon'Ble Pr.Cit Has Assumed The Jurisdiction U/S 263 Under Incorrect Application Of Law As Twin Condition Of "Erroneous Order & Prejudicial To Interest Of Revenue" As Enunciated U/S 263 Were Not Satisfied Simultaneously & Therefore Assumption Of Jurisdiction U/S 263 & Impugned Order Passed Thereunder Liable To Be Quashed As Void-Ab-Initio. 3. On The Facts & Circumstances & Law, The Original Order Passed By The Learned Ao Was After Proper Application Of Mind & Proper Appreciations Of Law & The Intervention Caused By The Hon'Ble Pr. Cit By Invoking The Provisions Of Section 263 Has No Sanction Of Settled

For Appellant: NoneFor Respondent: Shri Sumer Singh Meena, CIT I
Section 143(3)Section 260Section 263Section 80P(1)Section 80P(2)Section 80P(2)(a)

facts and circumstances and on law, the Hon'ble Pr.CIT assumed the jurisdiction u/s 263 on the issues on which the escapement of income are on probability and further based on pure guess-work which is not permissible u/s 263 and therefore improper assumption jurisdiction on surmises and conjectures

Mr.M J Aravind, Bangalore vs. Assistant Commissioner of Income Tax Circle-2(3)(1), Bangalore

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

ITA 222/BANG/2019[2011-12]Status: DisposedITAT Bangalore25 Feb 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2011-12

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 147Section 148Section 14ASection 48Section 57

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. However, before us, the ld. DR strongly relied on the judgment of the Karnataka High Court in the case ... 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

Suprerior Financial Consultancy Services P.Ltd, Mumbai vs. Asst CIT 1(3), Mumbai

In the result, appeals filed by the assessee are allowed and appeal filed by the revenue is dismissed

ITA 7501/MUM/2016[2003-04]Status: DisposedITAT Mumbai21 Feb 2022AY 2003-04

Bench: Shri Laliet Kumar, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble&

For Appellant: Shri V.G. Ginde &For Respondent: Shri Hoshang Boman Irani
Section 143(1)Section 148Section 43(1)(ii)

into investment as such there is no taxable event occurred and there is no income earned by the assessee and there is no escapement of income during this assessment year. He submitted that the issue is covered and relied in the Hon'ble Gujarat High Court in the case

Sri. R.S. Shekharappa, Davangere vs. Income Tax Officer, Ward- 1(5), Davangere

In the result, the revenue’s appeal for AY 2012-13 is allowed for statistical purposes

ITA 1678/BANG/2019[2011-12]Status: DisposedITAT Bangalore21 Feb 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri R. Chandrashekar, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl. CIT(DR)(ITAT)
Section 147

submitted that the assessee has to prove that these are duly accounted in books of account and there is no escapement of income since the assessment was reopened u/s. 147 of the Act. 9. In our opinion, the burden is cast upon the assessee to show that these transactions

Income Tax Officer, Ward- 1(5), Davanagere vs. Shri. R.S. Shekharappa, Davanagere

In the result, the revenue’s appeal for AY 2012-13 is allowed for statistical purposes

ITA 1536/BANG/2019[2012-13]Status: DisposedITAT Bangalore21 Feb 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri R. Chandrashekar, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl. CIT(DR)(ITAT)
Section 147

submitted that the assessee has to prove that these are duly accounted in books of account and there is no escapement of income since the assessment was reopened u/s. 147 of the Act. 9. In our opinion, the burden is cast upon the assessee to show that these transactions

Income Tax Officer, Ward- 1(5), Davanagere vs. Shri. R.S. Shekharappa, Davangere

In the result, the revenue’s appeal for AY 2012-13 is allowed for statistical purposes

ITA 1535/BANG/2019[2011-12]Status: DisposedITAT Bangalore21 Feb 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri R. Chandrashekar, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl. CIT(DR)(ITAT)
Section 147

submitted that the assessee has to prove that these are duly accounted in books of account and there is no escapement of income since the assessment was reopened u/s. 147 of the Act. 9. In our opinion, the burden is cast upon the assessee to show that these transactions

Galleria Condominium Association, Gurgaon vs. Income Tax Officer, Ward-1(3), Gurgaon

In the result, all the appeals filed by the assessee are remanded back to the file of the Assessing Officer for fresh assessment

ITA 1053/DEL/2021[2011-2012]Status: DisposedITAT Delhi21 Feb 2022AY 2011-2012

Bench: Shri Amit Shuklaas S.M.C. (Through Video Conferencing)

For Appellant: N o n eFor Respondent: Shri Sanjay Kumar, Sr.DR
Section 147Section 250Section 4(5)

were merely based on the suspicion and without any tangible material so as to suggest any escapement of income. Hence the reassessment proceedings are liable to be quashed. 3. Whether the Ld. AO justified in disallowing the claim of Interest income on the basis of concept of mutuality

Galleria Condominium Association, Gurgaon vs. Income Tax Officer, Ward-1(3), Gurgaon

In the result, all the appeals filed by the assessee are remanded back to the file of the Assessing Officer for fresh assessment

ITA 1052/DEL/2021[2010-11]Status: DisposedITAT Delhi21 Feb 2022AY 2010-11

Bench: Shri Amit Shuklaas S.M.C. (Through Video Conferencing)

For Appellant: N o n eFor Respondent: Shri Sanjay Kumar, Sr.DR
Section 147Section 250Section 4(5)

were merely based on the suspicion and without any tangible material so as to suggest any escapement of income. Hence the reassessment proceedings are liable to be quashed. 3. Whether the Ld. AO justified in disallowing the claim of Interest income on the basis of concept of mutuality

Galleria Condominium Association, Gurgaon vs. Income Tax Officer, Ward-1(5), Gurgaon, Gurugram

In the result, all the appeals filed by the assessee are remanded back to the file of the Assessing Officer for fresh assessment

ITA 1038/DEL/2021[2009-10]Status: DisposedITAT Delhi21 Feb 2022AY 2009-10

Bench: Shri Amit Shuklaas S.M.C. (Through Video Conferencing)

For Appellant: N o n eFor Respondent: Shri Sanjay Kumar, Sr.DR
Section 147Section 250Section 4(5)

were merely based on the suspicion and without any tangible material so as to suggest any escapement of income. Hence the reassessment proceedings are liable to be quashed. 3. Whether the Ld. AO justified in disallowing the claim of Interest income on the basis of concept of mutuality

M/S. Sharda Lab P. Ltd., Mumbai vs. ITO-8(2)(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1680/MUM/2020[2012-13]Status: DisposedITAT Mumbai10 Feb 2022AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Akash KumarFor Respondent: Shri S.N. Kabra
Section 143(2)Section 147Section 148Section 68

brought any material on record on the basis of which any nexus could have been established between material and the escapement of income. The reasons do not show any application of mind or any belief independently arrived 5 ITA.NO. 1680/MUM/2020 (A.Y: 2012-13) M/s. Sharda ... brought anything on record on the basis of which any nexus could have been established between the material and the escapement of income. The reasons fail to demonstrate the link between the alleged tangible material and formation of the reason to believe that income has escaped assessment. 11. Considering

Ultra Portfolio Management Pvt. Ltd., New Delhi vs. DCIT, Circle-27(1), New Delhi

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

ITA 8908/DEL/2019[2011-12]Status: DisposedITAT Delhi10 Feb 2022AY 2011-12

Bench: Shri R.K. Pandaassessment Year: 2011-12 Ultra Portfolio Management Pvt. Ltd., Vs Dcit, H-2, Top Floor, Suneja Chamber, Circle-27(1), Alaknanda Commercial Complex, New Delhi. New Delhi. Pan: Aaacu0117D (Appellant) (Respondent) Assessee By : Shri S.C. Verma, Ca Revenue By : Shri Sanjiv Mahajan, Sr. Dr Date Of Hearing : 27.01.2022 Date Of Pronouncement : 10.02.2022 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 20Th September, 2019 Of The Cit(A)-9, New Delhi, Relating To Assessment Year 2011-12. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Private Limited Company & Filed Its Return Of Income On 30Th September, 2011 Declaring A Loss Of Rs.3,06,078/-. The Return Was Processed U/S 143(1) On 10.01.2018 At The Returned Income. Subsequently, On The Basis Of Information Received From The Dcit, Central Circle (2), Mumbai Dated 5Th February, 2016 Wherein It Was Informed That Shri Shirish C. Shah, Who Happened To Be The Main Person Engaged In Providing Bogus Accommodation Entries Through The Companies Directly/Indirectly Controlled By Him & The Assessee Company Has Received Accommodation Entry Of Rs.25 Lakhs From M/S Dhanus Technologies Ltd., The Case Of The Assessee Was Reopened By Recording Reasons And, Accordingly, Notice U/S 148 Of The Act Was Issued To The Assessee.

For Appellant: Shri S.C. Verma, CAFor Respondent: Shri Sanjiv Mahajan, Sr. DR
Section 133(6)Section 143(1)Section 147Section 148Section 151Section 68

applied his mind. It was explained that the assessee company has filed its return of income truly and correctly and there is no escapement of income. However, since no response was received from the concerned person in response to notice u/s 133(6), the AO made addition of Rs.25 lakhs

Income Tax Oficer Ward-1, Bidar vs. Sri Rajkumar Agarwal, Hyderabad

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

ITA 3441/BANG/2018[2010-11]Status: DisposedITAT Bangalore07 Feb 2022AY 2010-11

Bench: Shri Chandra Poojari, Am & Smt.Beena Pillai, Jm

For Appellant: Sri.Rajkumar Hanchnal, CAFor Respondent: Sri.Priyadarshi Mishra, Addl.CIT-DR
Section 147Section 148Section 50C(2)

circumstances of the Appellants case, notice u/s 147 was issued by ITO Ward 7(3) Hyderabad who recorded the reasons to believe escapement of income, did not exercise jurisdiction over the matter but ITO Ward 1 Bidar 3 ITA Nos.3441-3421/Bang/2018 Sri.Rajkumar Agarwal. exercised the jurisdiction over the matter ... only the officer having jurisdiction over the matter who can have the reason to believe escapement of income and none other which is against the ratio of law laid down in the case of ITO v. Jawahar Lal Agarwal (2017) 190 TTJ (Agra) 870. 9. On facts and circumstances

Shri. Rajkumar Agarwal, Hyderabad vs. Income Tax Officer Ward-1, Bidar

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

ITA 3421/BANG/2018[2010-11]Status: DisposedITAT Bangalore07 Feb 2022AY 2010-11

Bench: Shri Chandra Poojari, Am & Smt.Beena Pillai, Jm

For Appellant: Sri.Rajkumar Hanchnal, CAFor Respondent: Sri.Priyadarshi Mishra, Addl.CIT-DR
Section 147Section 148Section 50C(2)

circumstances of the Appellants case, notice u/s 147 was issued by ITO Ward 7(3) Hyderabad who recorded the reasons to believe escapement of income, did not exercise jurisdiction over the matter but ITO Ward 1 Bidar 3 ITA Nos.3441-3421/Bang/2018 Sri.Rajkumar Agarwal. exercised the jurisdiction over the matter ... only the officer having jurisdiction over the matter who can have the reason to believe escapement of income and none other which is against the ratio of law laid down in the case of ITO v. Jawahar Lal Agarwal (2017) 190 TTJ (Agra) 870. 9. On facts and circumstances

Bentley Nevada Inc., Gurgaon vs. DCIT, Circle- 1(1)(2), International Taxation, New Delhi

In the result, all the four appeals of the assessee in ITA Nos

ITA 6303/DEL/2017[2011-12]Status: DisposedITAT Delhi03 Feb 2022AY 2011-12

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Ms. Anupama Anand, CIT- DR
Section 144C(13)Section 147Section 148

indicate that income chargeable to tax has escaped assessment for a particular year. If material in the possession of the AO divulges escapement of income for year ‘A’, no inference can be drawn, de hors some other relevant material, that similar income escaped assessment for year ‘B’ as well ... later years as well, the AO initiated reassessment. The Hon’ble High Court approved the view taken by the Tribunal that the escapement of income by means of renovation carried out in later years was not borne out from the material on record. Similarly, in the case of SGS India

Bentley Nevada Inc., Gurgaon vs. DCIT, Circle- 1(1)(2), International Taxation, New Delhi

In the result, all the four appeals of the assessee in ITA Nos

ITA 6302/DEL/2017[2010-11]Status: DisposedITAT Delhi03 Feb 2022AY 2010-11

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Ms. Anupama Anand, CIT- DR
Section 144C(13)Section 147Section 148

indicate that income chargeable to tax has escaped assessment for a particular year. If material in the possession of the AO divulges escapement of income for year ‘A’, no inference can be drawn, de hors some other relevant material, that similar income escaped assessment for year ‘B’ as well ... later years as well, the AO initiated reassessment. The Hon’ble High Court approved the view taken by the Tribunal that the escapement of income by means of renovation carried out in later years was not borne out from the material on record. Similarly, in the case of SGS India

Bentley Nevada Inc., Gurgaon vs. DCIT, Circle- 1(1)(2), International Taxation, New Delhi

In the result, all the four appeals of the assessee in ITA Nos

ITA 6301/DEL/2017[2009-10]Status: DisposedITAT Delhi03 Feb 2022AY 2009-10

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Ms. Anupama Anand, CIT- DR
Section 144C(13)Section 147Section 148

indicate that income chargeable to tax has escaped assessment for a particular year. If material in the possession of the AO divulges escapement of income for year ‘A’, no inference can be drawn, de hors some other relevant material, that similar income escaped assessment for year ‘B’ as well ... later years as well, the AO initiated reassessment. The Hon’ble High Court approved the view taken by the Tribunal that the escapement of income by means of renovation carried out in later years was not borne out from the material on record. Similarly, in the case of SGS India

Bentley Nevada Inc., Gurgaon vs. DCIT, Circle- 1(1)(2), International Taxation, New Delhi

In the result, all the four appeals of the assessee in ITA Nos

ITA 6300/DEL/2017[2008-09]Status: DisposedITAT Delhi03 Feb 2022AY 2008-09

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Ms. Anupama Anand, CIT- DR
Section 144C(13)Section 147Section 148

indicate that income chargeable to tax has escaped assessment for a particular year. If material in the possession of the AO divulges escapement of income for year ‘A’, no inference can be drawn, de hors some other relevant material, that similar income escaped assessment for year ‘B’ as well ... later years as well, the AO initiated reassessment. The Hon’ble High Court approved the view taken by the Tribunal that the escapement of income by means of renovation carried out in later years was not borne out from the material on record. Similarly, in the case of SGS India

ACIT, Jammu vs. Sh Vikramaditya Singh, Jammu

In the result, all the fours appeals filed by the Revenue are dismissed and the three Cross Objections as well as the ground as per Rule 27 are allowed

ITA 269/ASR/2007[1998-99]Status: DisposedITAT Delhi24 Jan 2022AY 1998-99

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: Shri C.S. Aggarwal, SrFor Respondent: Shri S.D. Kapila, Spl
Section 139(9)Section 147Section 148

escaped assessment has already been offered to tax and tax has also been paid on such income, as such, once there is no escapement of income, assumption of jurisdiction itself is bad in law. 39. Referring to the reasons recorded by the A.O. he submitted that in the reasons ... Ajatshatru, Jammu & Others, assessment, since such income has already been offered to tax, and hence the prerequisite before issuance of notice of escapement of income being not satisfied, assumption of jurisdiction u/s 148 of the Act and consequent order of assessment passed is unsustainable in law. Ld. Senior Counsel

ACIT, Cir-II, Jammu vs. Smt. Yashorajya Laxmi, Jammu

In the result, all the fours appeals filed by the Revenue are dismissed and the three Cross Objections as well as the ground as per Rule 27 are allowed

ITA 268/ASR/2007[1998-99]Status: DisposedITAT Delhi24 Jan 2022AY 1998-99

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: Shri C.S. Aggarwal, SrFor Respondent: Shri S.D. Kapila, Spl
Section 139(9)Section 147Section 148

escaped assessment has already been offered to tax and tax has also been paid on such income, as such, once there is no escapement of income, assumption of jurisdiction itself is bad in law. 39. Referring to the reasons recorded by the A.O. he submitted that in the reasons ... Ajatshatru, Jammu & Others, assessment, since such income has already been offered to tax, and hence the prerequisite before issuance of notice of escapement of income being not satisfied, assumption of jurisdiction u/s 148 of the Act and consequent order of assessment passed is unsustainable in law. Ld. Senior Counsel

ACIT, Jammu vs. Dr Karan Singh, Jammu

In the result, all the fours appeals filed by the Revenue are dismissed and the three Cross Objections as well as the ground as per Rule 27 are allowed

ITA 267/ASR/2007[1998-99\u005cu005cu005cu005cu005cu005cu005cu005c]Status: DisposedITAT Delhi24 Jan 2022

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: Shri C.S. Aggarwal, SrFor Respondent: Shri S.D. Kapila, Spl
Section 139(9)Section 147Section 148

escaped assessment has already been offered to tax and tax has also been paid on such income, as such, once there is no escapement of income, assumption of jurisdiction itself is bad in law. 39. Referring to the reasons recorded by the A.O. he submitted that in the reasons ... Ajatshatru, Jammu & Others, assessment, since such income has already been offered to tax, and hence the prerequisite before issuance of notice of escapement of income being not satisfied, assumption of jurisdiction u/s 148 of the Act and consequent order of assessment passed is unsustainable in law. Ld. Senior Counsel