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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

Madan Mohan Mishra, Mumbai vs. ITO 10(3)(3), Mumbai

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

ITA 796/MUM/2023[2012-13]Status: DisposedITAT Mumbai14 Jul 2023AY 2012-13

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.796/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2012-13) Madan Mohan Mishra बिधम/ Income Tax Office- R. 80 Ttc, Industrial Area 10(3)(3) Vs. Midc, Rabal, Navi Aayakar Bhavan, Mumbai-4000701. Mumbai-400020. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabpm3701B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri S. L. Jain Revenue By: Shri Dharmvir D Yadav (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 26/06/2023 घोषणा की तारीख /Date Of Pronouncement: 14/07/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Cit(A)-17, Mumbai Dated 29.12.2017 For Ay. 2012-13. 2. The Main Grievance Of The Assessee Is Against The Action Of The Ld. Cit(A) Confirming The Addition Made U/S 68 Of The Income Tax Act, 1961 (Hereinafter “The Act’) Of Rs.22,70,610/- Which Assessee Claims To Be Agricultural Income & Disallowance Of Rs.36,967/- As Expenses. 3. Brief Facts As Noted By The Ao Is That The Assessee Had Filed Return Of Income Declaring Total Income At Rs.14,93,823/-. Later, The Case Of The Assessee Was Selected For Scrutiny & The Ao Noted That The Assessee Had Shown Agricultural Income Of Rs.38,01,400/- Which Was Claimed As Exempt Income. However, According To Ao, The Assessee Failed To Prove That He Had Earned Exempt/Agricultural Income

For Appellant: Shri S. L. JainFor Respondent: Shri Dharmvir D Yadav (Sr. DR)
Section 68

Thus, according to the Ld. AR, when the land purchased by assessee along with co-owner has undergone scrutiny assessment, and the agricultural income accepted in their hands, the action of the AO in discarding those relevant facts as well as paper books filed by the assessee is perverse

Accenture Solutions P Ltd (Asol), Mumbai vs. Addl/Jt/ Dy/CIT/Asstt/ITO, National Faceless Assessment Centre, Delhi & the Dy CIT, Circle-14(1)(1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 1255/MUM/2021[2016-17]Status: DisposedITAT Mumbai13 Jul 2023AY 2016-17

Bench: Shri Amit Shukla & Shri Amarjit Singhaccenture Solutions Vs. Additional/Joint/Deputy/ Private Limited (‘Asol’) Assistant Commissioner Plant 3, Godrej & Boyce Of Income Tax/Income- Complex, Phirojshah Tax Officer, National Nagar, Vikhroli West, Facelless Assessment Off L.B.S Marg, Centre, Delhi Mumbai – 400079 The Dcit, Circle 14(1)(1) स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaach3235M Appellant .. Respondent Appellant By : Nishant Thakkar/ Hiten Chande/ Ms. Jasmin Amalsadvala Respondent By : Azhar Zain Vayal Parambath Date Of Hearing 22.05.2023 Date Of Pronouncement 13.07.2023 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assesse Is Directed Against The Order Passed By The Ao (National Assessment Centre) Mumbai- 2, Dated 18.03.2021 For A.Y. 2016-17 As Per The Direction Of The Drp Issued U/S 144C (5) Of The Act. The Assessee Has Raised The Following Grounds Before Us: “On The Facts & Circumstances Of The Case & In Law, The Learned Ao Transfer Pricing Officer (Tpo), Based On The Directions Of The Hon'Ble Drp Has: General Ground 1. Erred In Assessing The Total Income Of The Appellant At Rs.2888,33,73,016 Against A Total Income Of Rs.2179,39,30,620 As Reported By The Appellant In Its Revised Return Of Income & Determining A Demand Of Rs.2186,98,55,847 Payable By The Appellant.

For Appellant: Nishant Thakkar/ Hiten Chande/For Respondent: Azhar Zain Vayal Parambath
Section 144CSection 92CSection 92C(3)

brief is that return of income declaring total income at Rs.16,60,87,450/- was filed on 30.11.2016. The same was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 09.08.2018. The assessee company is an Indian Company engaged in providing I.T software development