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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

Tapan Kumar Shaw, Naihati vs. ITO, Ward 51(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1171/KOL/2025[2015-2016]Status: DisposedITAT Kolkata31 Jul 2025AY 2015-2016

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1171/Kol/2025 Assessment Year: 2015-16 Tapan Kr. Shaw………….………..……..…………………....Appellant 331, R.B. C Road, Gorifa, Naihati, W.B 743166 [Pan: Bvups8924F] Vs. Ito, Ward-51(3), Kolkata…………....…..………………….…..... Respondent Appearances By: Shri Anil Kochar, Adv., Appeared On Behalf Of The Appellant. Shri Ranu Biswas, Acit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : July 30, 2025 Date Of Pronouncing The Order : July 31, 2025 आदेश / Order Per Sonjoy Sarma: This Appeal Is Filed By The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals), Kolkata, Dated 08.12.2017 For The Assessment Year 2015–16. 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For A.Y. 2015–16 Declaring Total Income Of ₹2,64,330. The Case Was Selected For Scrutiny Assessment Under Section 143(3) Of The Income-Tax Act, 1961, Primarily Due To High Cash In Hand Shown In The Balance Sheet As Compared To The Preceding Year & Late Filing Of Return After 07.11.2016. The Assessee Is Engaged In Trading Business. Notices Under Sections 143(2) & 142(1) Were Issued. The Authorized Representative Appeared & Submitted Various Documents During Assessment Proceedings. During The Course Of Assessment, It Was

Section 143(3)Section 69

that the assessee filed its return of income for A.Y. 2015–16 declaring total income of ₹2,64,330. The case was selected for scrutiny assessment under Section 143(3) of the Income-tax Act, 1961, primarily due to high cash in hand shown in the balance sheet as compared

Binod Kumar Burnwal, Burdwan vs. ITO, Ward 2(1), Durgapur

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

ITA 1154/KOL/2025[2010-2011]Status: DisposedITAT Kolkata31 Jul 2025AY 2010-2011

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1154/Kol/2025 Assessment Year: 2010-11 Binod Kumar Burnwal…….……...……..…………………....Appellant C/O Ghanashyam Burnwal, Banagram, Nutandanga, Gogla, Burdwan – 713383. [Pan: Aizpb0692A] Vs. Ito, Ward-2(1), Durgapur…………………..………………….…..... Respondent Appearances By: Shri Manoj Tiwari, Advocate, Appeared On Behalf Of The Appellant. Shri Kallol Mistry, Jcit, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : July 29, 2025 Date Of Pronouncing The Order : July 31, 2025 आदेश / Order Per Sonjoy Sarma: This Appeal By The Assessee Is Directed Against The Order Dated 18.03.2025 Passed By The Nfac [In Short Cit(A)] Under Section 250 Of The Income-Tax Act, 1961. 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income Declaring Total Income Of ₹2,89,094, Which Was Processed Under Section 143(1) Of The Income-Tax Act, 1961. Subsequently, The Case Was Selected For Scrutiny Under Cass With Prior Approval Of The Competent Authority. Statutory Notices Under Sections 143(2) & 142(1) Were Issued, But There Was No Compliance From The Assessee Or His Authorised Representative. In The Absence Of Proper Books Of Account Or Supporting Documents, The Assessing Officer (Ao) Collected Copies Of Audited Financial Statements From The Assessee’S Chartered Accountant. It Was Observed That During The Year Under Consideration, The Assessee

Section 133(6)Section 143(1)Section 144Section 250

Purchase”. The AO initiated verification of purchase transactions by issuing notices to the respective parties under Section 133(6) and examining records from earlier scrutiny assessments. Total purchases of ₹27711502/- were reported from M/s. Dishnet Wireless Ltd. However, due to non-availability of books of accounts and supporting invoices

Raima Toll Road Private Limited, Mumbai vs. DCIT, Circle 3(1)(1), Mumbai

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

ITA 3380/MUM/2025[2018-19]Status: DisposedITAT Mumbai31 Jul 2025AY 2018-19

Bench: Shri Sandeep Gosain & Shri Girish Agrawalassessment Year: 2018-19 Raima Toll Road Private Limited, Deputy Commissioner Of B1-406, Boomerang, Income Tax, Circle - 3(1)(1), Chandivali Farm Road, Mumbai Vs. Sakinaka, Mumbai - 400072 (Pan : Aagcr1492L) (Appellant) (Respondent) Present For: Assessee : Ms. Simran Dhawan, Advocate Revenue : Shri Annavaran Kosuri, Sr. Ar Date Of Hearing : 24.07.2025 Date Of Pronouncement : 31.07.2025 O R D E R Per Girish Agrawal: This Appeal Filed By The Assessee Is Against The Order Of Ld. Cit(A), National Faceless Appeal Centre (Nfac), Delhi Vide Order No. Itba/Nfac/S/250/2024-25/1075067439(1), Dated 26.03.2025 Passed Against The Assessment Order By The National E-Assessment Centre, Delhi, U/S. 143(3) Of The Income-Tax Act (Hereinafter Referred To As The “Act”), Dated 14.04.2021 For Assessment Year 2018-19. 2. Grounds Taken By The Assessee Are Reproduced As Under:

For Appellant: Ms. Simran Dhawan, AdvocateFor Respondent: Shri Annavaran Kosuri, Sr. AR
Section 143(3)Section 250Section 80Section 801ASection 80I

80IA. 4. Assessee had filed it return of income on 12.09.2018 reporting total income at Nil. Case of the assessee was selected for scrutiny assessment for the reason “deduction claimed for industrial undertaking u/s. 80IA”. Assessee was awarded toll collection rights along with operation and maintenance of Mudurai-Kanyakumari stretch