“Section 151(1)(ii)”
The decision most relied on for Section 151(1)(ii) is ACIT v. ICICI Securities Primary Dealership Ltd. (348 ITR 299), cited in 76 judgments on BharatTax.
Leading authorities on Section 151(1)(ii)
Reopening assessment based on a mere re-look of accounts already furnished and assessed under section 143(3) is not permissible if there was no failure on the part of the assessee to make a true and full disclosure. The assessment cannot be reopened on the ground that income has escaped assessment merely by re-examining previously filed accounts.
Proceedings under section 147 can be initiated if the Assessing Officer has reason to believe that income has escaped assessment. The satisfaction required for initiating reassessment proceedings under section 147 must be that of the Assessing Officer himself, based on recorded reasons, and any satisfaction required under section 151 must be endorsed on the Assessing Officer's reasons.
Reassessment proceedings are invalid if the Assessing Officer proceeds without disposing of the assessee's preliminary objections.
Sanction for reassessment proceedings under Section 151(i) must be obtained from the specified authority within the extended timeline provided by Section 3(1) of TOLA, especially when the three-year period for initiating reassessment expires during the COVID-19 lockdown period. Failure to obtain sanction from the correct authority renders the reassessment proceedings invalid.
Sanction for reassessment proceedings initiated after three years from the end of the relevant assessment year must be obtained from the Principal Commissioner of Income Tax (PCCIT) under Section 151(ii). The proviso to Section 151, inserted w.e.f. 01.04.2023, does not apply retrospectively to proceedings initiated before that date.
Approval for issuing a notice under section 148, based on a standard phrase indicating it's a fit case, does not constitute an independent application of mind and is flawed in law.
An assessment cannot be reopened under section 147 based on the same material that was available during the original assessment proceedings, especially if the Assessing Officer had already made inquiries and received explanations from the assessee. Reopening requires new tangible material, not merely a change of opinion.
Section 68 has no application to donations disclosed as income by the assessee, and such income, if applied for the trust's objects, cannot be added back.
