“finality of assessment”
The decision most relied on for finality of assessment is Parashuram Pottery Works Co. Ltd. v. ITO (106 ITR 1), cited in 486 judgments on BharatTax.
Leading authorities on finality of assessment
The principle of finality dictates that stale issues should not be reactivated, and lapse of time brings repose to judicial and quasi-judicial controversies. A Commissioner cannot substitute their judgment for the Assessing Officer's unless the assessment order is legally erroneous, not merely less elaborate, thus limiting revisionary powers under Section 263.
Proceedings under Section 153A are initiated only if assessment/reassessment proceedings are pending on the date of search/requisition. Already finalized assessments for the years covered under Section 153A do not abate.
The Supreme Court holds that the issue of payment of excessive price on purchase of sugarcane by assesses is no longer res integra. The court elaborately dealt with this issue.
If there is an unexplained cash credit, the Assessing Officer can treat it as the assessee's income, even when the income is finalized on an estimation basis, without proving its specific source. The onus then shifts to the assessee to prove that the income represented by the cash credit has already been taxed.
The time limit for the Assessing Officer to pass a final assessment order under Section 144C(13) following directions from the Dispute Resolution Panel is determined by the specific provisions of Section 153, particularly Section 153(2A).
When an assessing authority is uncertain about the true ownership of funds or in whose hands income should be assessed, it can frame a protective assessment to safeguard the Revenue's interest. Such protective assessments remain valid until the substantive assessment is finalized.
The requirement to file a certificate or form (e.g., Form 10CCB, 10-IC) along with the return of income for claiming a deduction (e.g., under sections 80-IB, 115BAA) is directory regarding its timing. Such a deduction is allowable if the requisite form is filed before the final order of assessment, as procedural requirements should not override substantive benefits.
For the initiation of reassessment proceedings under section 147(a), it is essential to have 'reason to believe' that income has escaped assessment, based on relevant material. The AO's subjective satisfaction and the final outcome of the proceedings are not relevant at the initiation stage.
