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“scrutiny assessment”

Assessment ProceduresSection 143(3)Section 143(3)7,671 judgments

The decision most relied on for scrutiny assessment is CIT v. Sunbeam Auto Ltd. (332 ITR 167), cited in 897 judgments on BharatTax.

Leading authorities on scrutiny assessment

CIT v. Sunbeam Auto Ltd.
332 ITR 167 · 2011 · High Court
897
citing judgments

The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.

Phool Chand Bajrang Lal v. ITO
203 ITR 456 · 1993 · Supreme Court
396
citing judgments

Reassessment proceedings under Section 147 are valid even after a scrutiny assessment under Section 143(3), provided the Assessing Officer forms a reason to believe, based on definite, specific, and reliable information, that income escaped assessment due to the assessee's failure to fully and truly disclose material facts.

Sanjay Bimalchand Jain v. PCIT-1, Nagpur
89 Taxmann.com 196 · 2018 · High Court
251
citing judgments

The exemption for long-term capital gains on share transactions is unavailable if the assessee fails to discharge the onus of proving the genuineness of gains arising from dubious share transactions designed to convert unaccounted income into tax-exempt capital gains. Courts will uphold an assessment based on the Revenue's evidence of price rigging or penny stock manipulation if the assessee cannot provide cogent evidence for the abnormal rise in share value.

CIT v. British Paints India Ltd.
188 ITR 44 · 1991 · Supreme Court
204
citing judgments

The Assessing Officer has a duty to examine whether an assessee's books of account truly disclose the correct income and is not bound to accept the accounting system regularly employed by the assessee or methods followed in earlier years. Each assessment year is a distinct and self-contained unit for tax purposes.

Principal Commissioner of Income-tax v. Subodh Agarwal
149 Taxmann.com 373 · 2023 · High Court
194
citing judgments

Approval of draft assessment orders under Section 153D must be granted with due application of mind, not mechanically. Approving multiple cases, such as 38 in a single day, without proper scrutiny amounts to mechanical approval, rendering the assessment invalid.

ITO v. TechSpan India (P) Ltd.
92 Taxmann.com 361 · 2018 · Supreme Court
194
citing judgments

Reassessment under Section 147/148 is invalid if it constitutes a mere change of opinion by the Assessing Officer without any fresh tangible material, especially after the assessee made a full and truthful disclosure during the original scrutiny assessment under Section 143(3).

Narayanappa v. CIT
63 ITR 219 · 1967 · Supreme Court
187
citing judgments

The approval required from a higher authority under section 153D of the Income Tax Act is an administrative act, not a quasi-judicial one. Consequently, an opportunity of hearing is not required to be given to the assessee at the stage of obtaining such approval, provided the approving authority is competent.

CIT v. Ralson Industries Ltd. 5
288 ITR 322 · 2007 · Supreme Court
153
citing judgments

The Supreme Court affirmed that lower authorities are bound by decisions of higher authorities due to judicial discipline. It also clarified that the Commissioner, in exercising revisional power under Section 263, can conduct necessary inquiries to determine if an assessment is prejudicial to the Revenue.

Judgments citing scrutiny assessment

ACIT, Circle-4(1)(1), Aligarh vs. Mohd. Intzar, Aligarh

The appeal stand dismissed

ITA 318/AGR/2024[2014-15]Status: DisposedITAT Agra28 Mar 2025AY 2014-15

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं. / Ita No.318/Agr/2024 (िनधा"रणवष" / Assessment Year: 2014-15) Acit Circle 4(1)(1) Mohd. Intzar बनाम/ Aligarh 202001 140, Sarai Mitan Vs. Delhi Gate, Aligarh "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aagpi-7161-N (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Dr. Arun Kumar Yadav – Ld. Cit-Dr ""थ"कीओरसे/Respondent By : Shri Deepak Singh (Advocate) – Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 19-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 28-03-2025

For Appellant: Dr. Arun Kumar Yadav – Ld. CIT-DRFor Respondent: Shri Deepak Singh (Advocate) – Ld. AR
Section 143(3)Section 147Section 148Section 69C

submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The returned income of Rs.9.28 Lacs was accepted in scrutiny assessment u/s 143(3). However, pursuant to receipt of certain information from investigation wing that the assessee made unexplained purchases, the case was reopened ... placing reliance on various judicial decisions. The quantum additions on merits were also contested. The Ld. CIT(A), in para 4.3, noted that during scrutiny assessment u/s 143(3), the books of accounts were duly verified and Ld. AO made adhoc addition of Rs.1 Lacs for unverified vouchers / bills relating