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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

Rushi Pravinchandra Raskapoor, Surat vs. Principal Commissioner of Income Tax -1, Surat

In the result, appeal of the assessee is partly allowed in above terms

ITA 135/SRT/2023[2018-19]Status: DisposedITAT Surat06 Jun 2023AY 2018-19

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.135/Srt/2023 ("नधा"रणवष" / Assessment Year: (2018-19) (Virtual Court Hearing) Rushi Pravinchandra Principal Commissioner Of Raskapoor, Road No.11 Income-Tax-1, Surat, Aaykar Vs. Udhna Industries Estate, Bhavan, Majura Gate, Surat- Surat-394210 395001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abmpr 0305 E (""थ" /Respondent) (अपीलाथ" /Appellant) िनधा"रती की ओर से /Assessee By : Shri Nitin Gheewala, A.R राज"व क" ओर से /Respondent By : Shri Ashok B. Koli, Cit-D.R सुनवाई की तारीख/ Date Of Hearing : 16/05/2023 घोषणा की तारीख/Date Of Pronouncement : 06/06/2023 आदेश / Order Per Dr. A. L. Saini, Am: By Way Of This Appeal, The Assessee Has Challenged The Correctness Of The Order Passed By The Learned Principal Commissioner Of Income Tax-1, Surat (In Short “Ld. Pcit”] Dated 16.01.2023, Under Section 263 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”), For Assessment Year 2018-19. 2. At The Outset, Learned Counsel For The Assessee, Begins By Pointing Out That Ld. Pcit Has Invoked His Jurisdiction U/S 263 Of The Act On The Reason That As Per The Wage Register Of Assessee, For The Period Under Consideration, That Assessee Has Received An Amount Of Rs.2,46,500/- As Employee’S Contribution To Esic & Further An Amount Of Rs.6,144/- As Employee’S Contribution To Provident Fund In Various Months. The Table Is Given In The Order Of Ld. Pcit On Pages-1 & 2 Of His Order, Wherein Total Esic Amount Is Shown At Rs.2,46,500/- & Total Employee’S Provident Fund Amount Is Shown At Rs.6,144/- Respectively. The Ld. Pcit Noted That Employee’S Contribution Is An Income In The Hands Of The Employers As Per Section 2(24)(X) Of The Act, If It Is Not Deposited By Employers

For Appellant: Shri Nitin Gheewala, A.RFor Respondent: Shri Ashok B. Koli, CIT-D.R
Section 143(3)Section 2(24)(x)Section 263

pass fresh assessment on the issues relating to Provident Fund and ESIC and “other issues”, which were already considered by Assessing Officer in scrutiny assessment. Therefore such general instruction given by the Ld. PCIT is wrong, these “other issues” were not the subject-matter in the order of Ld.PCIT