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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

Delite Buildwell Private Ltd, New Delhi vs. ACIT Circle-7(1), New Delhi

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

ITA 1749/DEL/2020[2016-17]Status: DisposedITAT Delhi29 Mar 2023AY 2016-17

Bench: Shri C.M. Garg & Shri Anadee Nath Misshraassessment Year: 2016-17 Delite Buildwell Private Ltd., Vs. Acit, 151-A, Club Road, Sainik Farms, Circle-7(1), New Delhi – 110 062. New Delhi. Pan: Aaecc7113K (Appellant) (Respondent) Assessee By : Shri V.K. Jain, Ca Revenue By : Shri Ravinder Singh Yadav, Sr. Dr Date Of Hearing : 24.02.2023 Date Of Pronouncement : 29.03.2023 Order Per C.M. Garg, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Of The Cit(A)-3, New Delhi, Dated 03.12.2019 For Assessment Year 2016-17. 2. Ground Of Appeal No.1 Of The Assessee Reads As Under:- “1(A) That On The Facts & In The Circumstances Of The Case Ld. Cit (A) Has Erred In Passing Ex-Parte Order Without Serving Notice Dt. 14.08.2019, 23.09.2019 & 05.11.2019. 1 (B) That The Ld. Cit (A) Has Failed To Place Any Evidence For Issuing Of Notice Dated 14.08.2019 For Fixing Date Of Hearing On 16.09.2019, Notice Dated 23.09.2019 For Fixing Date Of Hearing On 04.11.2015 & Notice Dated 05.11.2019 For Fixing Date Of Hearing On 02.12.2019. No Such Alleged Notices Were Received By Appellant Company At Registered Address As Mentioned In Form No. 35 Of Appeal. 1(C ) That The Ld. Cit(A) Has Totally Ignored The Fact That In Form 35 There Is A Specific Column Wherein Mentioned That “Whether Notices / Communication May Be Sent On Email”. The Appellant Company Has Stated “No”. Thus The Cit(A) Has Ignored Specific Request Of The Appellant Which Is Duly Provided As Per Provisions Of Income Tax Act / Rules In Form No. 35. 1(D) The Ld. Cit(A) Has Not Sent Any Notice On Email Duly Stated In Form No. 35 As Vasudevinfrastructure@Qamil.Com Duly Verified By The Appellant Company From The Email Records. Thus The Passing Of Exparte Order Is Bad In Law & Deserves To Be Quashed.”

For Appellant: Shri V.K. Jain, CAFor Respondent: Shri Ravinder Singh Yadav, Sr. DR
Section 143(2)Section 250

entry calling it to submit its stand by filing reply and relevant documentary evidence on the issues picked up by the AO for making scrutiny assessment order. In our humble understanding, the assessee was not provided due opportunity of hearing before the authorities below. Therefore, the orders passed in violation