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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

Polakulath Narayanan Renai Medicity, Kochi vs. The DCIT Non Corp Circle 1(1), Kochi

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

ITA 253/COCH/2023[2014-15]Status: DisposedITAT Cochin05 Aug 2024AY 2014-15

Bench: Shri Chandra Poojari & Shri Soundararajan K.Polakulath Narayanan Renai Dcit, Non Corporate Circle 1(1) Medicity C.R. Building, I.S. Press Road Main Road, Palarivattom Vs. Kochi 682018 Kochi 682025 Pan – Aaifp7597B (Appellant) (Respondent) Assessee By: Shri Mathew Joseph, Ca Revenue By: Ms. Swarnalatha, Sr.Dr Date Of Hearing: 10.07.2024 Date Of Pronouncement: 05.08.2024 O R D E R Per: Soundararajan K.,J.M. This Appeal Filed By The Assessee Challenges The Order Of The National Faceless Appeal Centre, Delhi [Cit(A)] Dated 23.04.2023 In Respect Of Assessment Year (Ay) 2014-15. 2. The Brief Facts Of The Case Are That The Assessee Is Running A Hospital & During The Assessment Year The Assessing Authority Had Capitalised The Interest Component Of The Interior Works For The Reason That The Work Was Done Over A Period Of Time & Hence The Interest Till The Completion Of The Work Is To Be Capitalised. The Assessing Officer (Ao) Also Capitalised The Interest Component On The Capital Asset I.E.On The Sewage Plant Since The Same Was Put Into Use At The Fag End Of The Assessment Year. The Ao Also Treated The Interest On Fixed Deposits As Margin Money Under The Head ‘Income From Other

For Appellant: Shri Mathew Joseph, CAFor Respondent: Ms. Swarnalatha, Sr.DR
Section 139(5)

follows:- “4. Additional ground (i). Levy of tax of Rs. 4,05,940/- on Rs.11,07,430/-. The unabsorbed depreciation determined in the scrutiny assessment order passed on 04/03/2016 for the A.Y 2013-14 amounting to Rs. 18,92,878/- was not set off u/s 32(2) while levying