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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

Kanji Ganesh Patel HUF, Mumbai vs. Income Tax Officer, WD-22(2)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 1186/MUM/2024[2014-15]Status: DisposedITAT Mumbai24 Jun 2024AY 2014-15

Bench: Shri Prashant Maharishi (Am) I.T.A. No. 1186/Mum/2024 (A.Y. 2014-15) Kanji Ganesh Patel Huf Vs. Ito, Ward 22(2)(1) 1905 Building No. 3 Piramal Chamber Raheja Classique Lalbaug, Parel Oshiwara, New Link Road, Mumbai-400 012. Andheri West Mumbai-400 053. Pan : Aaghk3564D (Appellant) (Respondent) Assessee By Shri Prakash G. Jhunjhunwala Department By Shri R.R. Makwana Date Of Hearing 13.06.2024 Date Of Pronouncement 24.06.2024 O R D E R Per Prashant Maharishi 1. This Appeal Is Filed By Kanji Ganesh Patel Huf (Assessee/Appellant) Against Appellate Order Passed By The National Faceless Appeal Centre (Nfac), Delhi (The Learned Cit – A) For Assessment Year 2014 – 15 Dated 16/1/2024 Wherein The Appeal Filed By The Assessee Against The Assessment Order Passed Under Section 143 (3) Of The Income Tax Act, 1961 (The Act) By The Deputy Commissioner Of Income Tax 22 (2) (1), Mumbai (The Learned Ao) Was Dismissed. 2. The Assessee Is Aggrieved With The Same & Has Preferred Appeal Raising Solitary Ground About Addition Under Section 68 Of The Income Tax Act Wherein The Exemption Under Section 10 (1) Of Agricultural Income Was Denied To The Assessee Of Rs. 2,748,802/–. 3. The Brief Fact Of The Case Shows That Assessee Is An Huf Filed Its Return Of Income On 31/7/2014 At A Total Income Of Rs. 321,608/- In The Return Of Income Assessee Has Claimed Exemption Under Section 10 Page 1 Of 5

Section 10Section 143Section 68

Therefore, agricultural income of the assessee is assessed by the learned assessing officer on several occasions and accepted the claim of the assessee in scrutiny assessment. Further for the other years such as assessment year 2014 – 15, 2015 – 16, 2017 – 18 and 2019 – 20, assessee has claimed exemption of agricultural

Convonix Systems Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, Circle 15(1)(2), Mumbai

In the result, the appeal of the assesse is allowed for statistical purposes

ITA 4061/MUM/2023[2017-18]Status: DisposedITAT Mumbai21 Jun 2024AY 2017-18

Bench: Shri Amarjit Singh & Shri Rahul Chaudharyconvonix Systems Private Vs. Assistant Commissioner Limited, 15Th Floor, Urmi Of Income Tax, Circle Estate, 95, Ganpatrao 15(1)(2), 4Th Floor, Kadam Marg, Delisle Road Aayakar Bhavan, S.O. Mumbai, Maharishi Karve Road, Maharashtra – 400013 Mumbai – 400020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaccc5795P Appellant .. Respondent Appellant By : Pratik Shah Respondent By : H.M. Bhatt Date Of Hearing 22.05.2024 Date Of Pronouncement 21.06.2024 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assessee Is Directed Against The Order Passed By The Ld. Cit(A) Nfac For A.Y. 2017-18. The Assessee Has Raised The Following Grounds Before Us: “1. On The Facts & In The Circumstances Of The Case & In Law, The Assessment Order Passed By The Ld. Assistant Commissioner Of Income- Tax ("Ld. Ao") Under Section 143(3) Of The Income-Tax Act, 1961 ("The Act") Assessing The Income Of The Appellant At Inr 18,07,08,220/-Instead Of Returned Income Of Inr 17,15,15,710/- & The Demand Raised Thereon On The Appellant Is Invalid & Bad In Law, The Appellant Prays That The Addition Made By The Ld. Ao Be Deleted 2. On The Facts & In The Circumstances Of The Case & In Law, The Ld. Commissioner Of Income-Tax Appeals ['1D. Cit(A)'] Erred In Confirming The Order Of The Ld. Ao In Making An Adhoc Disallowance Of 50% In Relation To The Shared Service Expenses Amounting To Inr 91,92,505/-.

For Appellant: Pratik ShahFor Respondent: H.M. Bhatt
Section 143(2)Section 143(3)Section 270A

brief is that return of income declaring total income of Rs.17,15,15,710/- was filed on 29.11.2017. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 09.08.2018. The assessee company was engaged in the business of providing search engine optimization