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“protective assessment”

MiscellaneousAssessmentAssessment441 judgments

The decision most relied on for protective assessment is Lalji Haridas v. ITO (43 ITR 387), cited in 238 judgments on BharatTax.

Leading authorities on protective assessment

Lalji Haridas v. ITO
43 ITR 387 · 1961 · Supreme Court
238
citing judgments

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.

CIT, Gujarat II v. Surendra Gulab Chand Modi
140 ITR 517 · 1983 · High Court
88
citing judgments

Protective assessments should not be deleted or disposed of by lower authorities, but rather allowed to remain in effect until the related substantive assessment proceedings attain finality before the High Court or Supreme Court.

DHFL Venture Capital Fund v. ITO
358 ITR 471 · 2013 · High Court
66
citing judgments

Reassessment proceedings cannot be initiated solely for the purpose of making a protective addition. Such proceedings are not valid in the eyes of law.

Bhailal Manilal Patel v. CIT
49 Taxmann.com 539 · 2014 · High Court
47
citing judgments

Penalty under section 271(1)(c) cannot be imposed based on a protective assessment order. Initiation of penalty proceedings is impermissible without a substantive assessment order that finally adds income to the assessee's hands.

Peter Vaz v. Commissioner of Income Tax, Central Circle, Bangalore
128 Taxmann.com 180 · 2021 · High Court
34
citing judgments

An assessee can raise an objection regarding the validity of the Assessing Officer's jurisdiction for reopening a concluded assessment even if the issue was not raised before the CIT(Appeals), by invoking Rule 27 of the Income Tax Appellate Tribunal Rules, 1963. This is permissible if the issue is ancillary to the main issue and does not require additional evidence.

(CIT v. Cochin Co. Pvt. Ltd.
104 ITR 655 · 1976 · High Court
32
citing judgments

A protective assessment is permissible when the assessing officer has doubt regarding who is in receipt of income, but a recovery based on a protective assessment is not allowed. If an assessment is intended to be protective, it must be clearly stated as such.

CIT v. Super Steel (Sales) Co.
178 ITR 451 · 1989 · High Court
28
citing judgments

A penalty under Section 271(1)(c) for concealment of income cannot be levied when the assessment was made on a protective basis, especially if the income was actually assessed in the hands of another person and it was uncertain who had concealed the income.

Suresh K. Jajoo v. ACIT
39 SOT 514 · 2010 · ITAT
27
citing judgments

A protective assessment cannot be made without a prior substantive assessment.

Judgments citing protective assessment

Assistant Commissioner of Income Tax Central Circle-1, Jalandhar vs. Shri Rajan Batra, Jalandhar

In the result, the ITA No

ITA 113/ASR/2022[2013-14]Status: DisposedITAT Amritsar24 May 2023AY 2013-14

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 153ASection 153BSection 250(6)Section 80

order of the ITAT-Amritsar Bench the assessment orders of substantive assessment are quashed, in reference of above discussion. Accordingly, the protective assessment was made in case of assessee is duly quashed. 19. In the result, the ITA No. 81 to 83/Asr/2022 & 85/Asr/2022 are allowed. Order pronounced in the open

Assistant Commissioner of Income Tax Central Circle-1, Jalandhar vs. Shri Rajan Batra, Jalandhar

In the result, the ITA No

ITA 111/ASR/2022[2011-12]Status: DisposedITAT Amritsar24 May 2023AY 2011-12

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 153ASection 153BSection 250(6)Section 80

order of the ITAT-Amritsar Bench the assessment orders of substantive assessment are quashed, in reference of above discussion. Accordingly, the protective assessment was made in case of assessee is duly quashed. 19. In the result, the ITA No. 81 to 83/Asr/2022 & 85/Asr/2022 are allowed. Order pronounced in the open

Fashinable Attire (P) Ltd., Delhi vs. DCIT, Central Circle-2, Gurgaon

In the result, the appeal of the assessee in the case of Fashionara

ITA 7664/DEL/2019[2015-16]Status: DisposedITAT Delhi22 May 2023AY 2015-16

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Dr. Rakesh Gupta, Shri DeepeshFor Respondent: Shri T. James Singson, CIT, DR
Section 145(3)Section 153CSection 153DSection 234B

force in the contention of the Ld. DR that if substantive additions are deleted then as per orders of ld. CIT(A) the protective assessment in the hands of present assessee / appellant will still revive. In fact the findings arrived by the Tribunal in case of M/s. Orient Craft

Fashinable Attire (P) Ltd., Delhi vs. DCIT, Central Circle-2, Gurgaon

In the result, the appeal of the assessee in the case of Fashionara

ITA 7663/DEL/2019[2014-15]Status: DisposedITAT Delhi22 May 2023AY 2014-15

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Dr. Rakesh Gupta, Shri DeepeshFor Respondent: Shri T. James Singson, CIT, DR
Section 145(3)Section 153CSection 153DSection 234B

force in the contention of the Ld. DR that if substantive additions are deleted then as per orders of ld. CIT(A) the protective assessment in the hands of present assessee / appellant will still revive. In fact the findings arrived by the Tribunal in case of M/s. Orient Craft

Fashionara Apparels (P) Ltd., New Delhi vs. DCIT, Central Circle-2, Gurgaon

In the result, the appeal of the assessee in the case of Fashionara

ITA 7662/DEL/2019[2015-16]Status: DisposedITAT Delhi22 May 2023AY 2015-16

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Dr. Rakesh Gupta, Shri DeepeshFor Respondent: Shri T. James Singson, CIT, DR
Section 145(3)Section 153CSection 153DSection 234B

force in the contention of the Ld. DR that if substantive additions are deleted then as per orders of ld. CIT(A) the protective assessment in the hands of present assessee / appellant will still revive. In fact the findings arrived by the Tribunal in case of M/s. Orient Craft

Fashionara Apparels (P) Ltd., New Delhi vs. DCIT, Central Circle-2, Gurgaon

In the result, the appeal of the assessee in the case of Fashionara

ITA 7661/DEL/2019[2014-15]Status: DisposedITAT Delhi22 May 2023AY 2014-15

Bench: Shri C.M. Garg & Shri M. Balaganesh

For Appellant: Dr. Rakesh Gupta, Shri DeepeshFor Respondent: Shri T. James Singson, CIT, DR
Section 145(3)Section 153CSection 153DSection 234B

force in the contention of the Ld. DR that if substantive additions are deleted then as per orders of ld. CIT(A) the protective assessment in the hands of present assessee / appellant will still revive. In fact the findings arrived by the Tribunal in case of M/s. Orient Craft

Shri. Rajesh Dhawan, Ferozepur vs. Income Tax Officer Ward -3 (2), Ferozepur

In the result, the appeal of the assessee bearing ITA No

ITA 256/ASR/2019[2014-15]Status: DisposedITAT Amritsar11 May 2023AY 2014-15

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 250Section 69

No.256/Asr/2019 4 Assessment Year: 2014-15 3. Brief fact of the case is thatthe addition was made by the ld. AO on basis of protective assessment related to transaction with M/s Ganesh Rice Mills, Muktsar, with assessee amount of Rs.15,54,20,800/-. As per the ld. AO, the assessee

DCIT, Jaipur vs. Sums Exim Pvt. Ltd., Jaipur

In the result , ground no. 2 raised by the revenue is dismissed

ITA 860/JPR/2016[2009-10]Status: DisposedITAT Jaipur24 Apr 2023AY 2009-10

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri B.P. Mundra, CAFor Respondent: Shri Sanjay Dhariwal, CIT
Section 132(4)Section 153C

above chart, the undisclosed income of the assessee for the year under consideration comes to Rs. 4,57,10,029/- which is protectively assessed in his hands. This would result in an addition of Rs.4,57,10,029/- 8. Apropos to Ground no. 1 of the revenue, the facts

ACIT, Central Circle- 13, New Delhi vs. Electrical & Electronics India Ltd., Kolkata

In the result, the appeals filed by the Revenue are dismissed

ITA 771/DEL/2018[2011-12]Status: DisposedITAT Delhi18 Apr 2023AY 2011-12

Bench: Smt Diva Singhdr. B. R. R. Kumar

For Appellant: Sh. Salil Aggarwal, AdvFor Respondent: Sh. T. James Singson, CIT DR
Section 69

with regard to assesses application under rule 27 of ITAT rules may be taken into consideration. With regard to Para-1 above. (Protective assessment deleted by CIT(A) for 3 A.Ys.) In this regard is to submit that, the Ld CIT(A) in his order has not appreciated nor considered ... facts and reasonings recorded by the AO in the Assessment order. The Ld CIT(A) simply accepted the explanations given by the assessee. The protective assessment is deleted without giving any finding of his own but by simply following an order of other group company of JP Minda which

ACIT, Central Circle- 13, New Delhi vs. Electrical & Electronics India Ltd., Kolkata

In the result, the appeals filed by the Revenue are dismissed

ITA 770/DEL/2018[2012-13]Status: DisposedITAT Delhi18 Apr 2023AY 2012-13

Bench: Smt Diva Singhdr. B. R. R. Kumar

For Appellant: Sh. Salil Aggarwal, AdvFor Respondent: Sh. T. James Singson, CIT DR
Section 69

with regard to assesses application under rule 27 of ITAT rules may be taken into consideration. With regard to Para-1 above. (Protective assessment deleted by CIT(A) for 3 A.Ys.) In this regard is to submit that, the Ld CIT(A) in his order has not appreciated nor considered ... facts and reasonings recorded by the AO in the Assessment order. The Ld CIT(A) simply accepted the explanations given by the assessee. The protective assessment is deleted without giving any finding of his own but by simply following an order of other group company of JP Minda which

ACIT, Central Circle- 13, New Delhi vs. Electrical & Electronics India Ltd., Kolkata

In the result, the appeals filed by the Revenue are dismissed

ITA 769/DEL/2018[2010-11]Status: DisposedITAT Delhi18 Apr 2023AY 2010-11

Bench: Smt Diva Singhdr. B. R. R. Kumar

For Appellant: Sh. Salil Aggarwal, AdvFor Respondent: Sh. T. James Singson, CIT DR
Section 69

with regard to assesses application under rule 27 of ITAT rules may be taken into consideration. With regard to Para-1 above. (Protective assessment deleted by CIT(A) for 3 A.Ys.) In this regard is to submit that, the Ld CIT(A) in his order has not appreciated nor considered ... facts and reasonings recorded by the AO in the Assessment order. The Ld CIT(A) simply accepted the explanations given by the assessee. The protective assessment is deleted without giving any finding of his own but by simply following an order of other group company of JP Minda which

The DCIT, Cen-Circle, Thrissur vs. Sri.T.G. Chandrakumar, Thrissur

In the result, the Appeal by the Revenue is allowed on the aforesaid terms

ITA 67/COCH/2018[2008-09]Status: DisposedITAT Cochin03 Apr 2023AY 2008-09

Bench: Shri Sanjay Arora (Accountant Member), Shri Sandeep Gosain (Judicial Member)

For Appellant: Smt. J.M. Jamuna Devi, Sr. DRFor Respondent: Shri C.B.M. Warrier, FCA
Section 132Section 153CSection 268A

capital gain in the case of Shri P. Manoj & Shri K.J. Thomas would not be as short-term capital gain, as made in their protective assessments, but as long-term capital gains, ignoring the purchase dated 18/12/2006, i.e., substituting it with the actual cost (and date) of acquisition

Shri Shantilalyadav, Khargone vs. The ITO, Khatgone

ITA 399/IND/2022[2013-14]Status: DisposedITAT Indore31 Mar 2023AY 2013-14

Bench: Ms. Suchitra Kamble & Shri B.M. Biyani(Conducted Through Virtual Court) Assessment Year: 2013-14 Shri Shantilal Yadav Ito, Khargone Gram Nagziri, बनाम/ Tehsil Gogawa, Vs. Khargone (Appellant / Assessee) (Respondent / Revenue) Pan: Aiwpy 0915 C Assessee By Shri S. N. Agrawal & Pankaj Mogra, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 27.03.2023 Date Of Pronouncement 31.03.2023

Section 115BSection 143(3)Section 147Section 148Section 69A

case of the assessee-company was not reopened during the pendency of proceedings in the case of Shri Goyal. Had the revenue made protective assessment in the case of Shri G.P. Goyal, then it could have taken action against the assessee-company. Thus the basic requirement for reopening the assessment ... 296/LUC/2010]: “16. In the present case also assessment has been made in the hands of the husband of the assessee on substantive basis and protective assessment was made in the hands of the assessee. Therefore assessment u/s. 147/143/3) of the Act deserves to be cancelled.” Hon’ble Mumbai High Court

Shriamit Agrawal, Indore vs. The ITO Ward 1(3), Indore

ITA 212/IND/2022[2009-10]Status: DisposedITAT Indore27 Feb 2023AY 2009-10

Bench: Ms.Suchitra Kamble & Shri B.M. Biyani(Conducted Through Virtual Court) Assessment Year: 2009-10 Shri Amit Agrawal Ito, Ward-1(3) बनाम/ Indore Indore Vs. (Appellant / Assessee) (Respondent / Revenue) Pan: Abrpa 2105 L Assessee By Shri S. N. Agrawal & Pankaj Mogra, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.02.2023 Date Of Pronouncement 27.02.2023

Section 143(3)Section 147Section 148Section 271(1)(c)Section 68

case of the assessee- company was not reopened during the pendency of proceedings in the case of Shri Goyal. Had the revenue made protective assessment in the case of Shri G.P. Goyal, then it could have taken action against the assessee-company. Thus the basic requirement for reopening the assessment ... 296/LUC/2010]: “16. In the present case also assessment has been made in the hands of the husband of the assessee on substantive basis and protective assessment was made in the hands of the assessee. Therefore assessment u/s. 147/143/3) of the Act deserves to be cancelled.” Hon’ble Mumbai High Court

Ratna Talwar, Gurgaon vs. DCIT, Central Circle- 1, Faridabad

The appeal of the assessee is dismissed

ITA 3917/DEL/2018[2009-10]Status: DisposedITAT Delhi24 Feb 2023AY 2009-10

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2009-10

For Appellant: Shri Sandeep Goyal, AdvFor Respondent: Shri T Kipgen, CIT(DR)

Commissioner of Income Tax (Appeals)- 3, Gurgaon pertaining to Assessment Year 2009-10. 2. Before us, the Ld. AR submitted that it is a protective assessment. The substantive addition has been made in the case of Shri Arun Duggal. Another co-ordinate bench of the Tribunal has dismissed the Department

Sri.John Mathew N, Alappuzha vs. The ITO, WD-2, Alappuzha

In the result, the appeal by the assessee is dismissed

ITA 81/COCH/2018[2001-02]Status: DisposedITAT Cochin24 Feb 2023AY 2001-02

Bench: Shri Sanjay Arora & Shri Sandeep Gosainshri John Mathew N. The Income Tax Officer Neroth House Ward - 2, Alleppey Vs. No. 1, Jubilee Road Alappuzha [Pan: Acupm8885D] Appellant Respondent Appellant By: Shri Anil D. Nair & Shri P.K. Biju, Advocates Respondent By: Smt. J.M. Jamuna Devi, Sr. D.R. Date Of Hearing: 03.02.2023 Date Of Pronouncement: 24.02.2023 O R D E R Per Bench This Appeal By The Assessee Challenges The Validity Of The Reassessment Under Section 147 Read With Section 143(3) Of The Income Tax Act, 1961 (‘The Act’ Hereinafter) Dated 20.11.2007 For Assessment Year (Ay) 2001-02, Since Upheld In First Appeal Vide Order Dated 24.01.2018 By The Commissioner Of Income Tax (Appeals), Kottayam (‘Cit(A)’ For Short). 2.1 At The Outset, Shri Anil D. Nair, The Ld. Counsel For The Assessee-Appellant, Would Submit That The Basis Of The Assessee’S Challenge Is Two-Fold: (A) Non-Supply Of The Reasons Recorded; & (B) True & Full Disclosure Of All Material Facts Relating To The Income Escaping Assessment By The Assessee Per His Return Of Income.

For Appellant: Shri Anil D. Nair &For Respondent: Smt. J.M. Jamuna Devi, Sr. D.R
Section 143(2)Section 143(3)Section 147Section 148(2)Section 230ASection 234B

disclosure. 3.3 We may next discuss the assessee’s legal plea as to the reassessment being not valid as the assessment made is a protective assessment, which could not be a subject matter of reassessment proceedings. The same being a legal ground is, firstly, not liable to be admitted unless ... record. A copy of the reasons recorded is not on record. If there is no mention therein of the reopening being for making a protective assessment, how could the said decisions be pressed into service? There is in fact even no claim by the assessee in this regard. The assessee

Deputy Commissioner of Income Tax, Central Circle-1, Guntur vs. Bolisetty Kameswara Rao, Guntur

Appeals are dismissed and the two Cross Objections of the assessee are disposed off accordingly

ITA 186/VIZ/2022[2015-16]Status: DisposedITAT Visakhapatnam07 Feb 2023AY 2015-16

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./ I.T.A. No. 185 & 186/Viz/2022 ("नधा"रण वष" / Assessment Year :2014-15 & 2015-16) The Deputy Commissioner Of Vs. Sri Bolisetty Kameswara Rao, Income Tax, Central Circle-1, D.No.3-29-40/4, 2Nd Lane, 3Rd Floor, Rajkamal Complex, Krishna Nagar, Lakshmipuram Main Road, Guntur-522006. Guntur-522 007. Pan: Achpb 2189 A (अपीलाथ"/ Appellant) (""यथ"/ Respondent) C.O. No. 18 & 19/Viz/2022 आयकर अपील सं./ I.T.A. No. 185 & 186/Viz/2022 ("नधा"रण वष" / Assessment Year :2014-15 & 2015-16) The Deputy Commissioner Of Vs. Sri Bolisetty Kameswara Rao, Income Tax, Central Circle-1, D.No.3-29-40/4, 2Nd Lane, 3Rd Floor, Rajkamal Complex, Krishna Nagar, Lakshmipuram Main Road, Guntur-522006. Guntur-522 007. Pan: Achpb 2189 A (अपीलाथ"/ Appellant In Appeal) (""यथ"/ Respondent / Cross Objector) अपीलाथ" क" ओर से/ Assessee By : Sri G.V.N. Hari, Advocate ""याथ" क" ओर से / Revenue By : Sri Mn Murthy Naik, Cit-Dr

For Appellant: Sri G.V.N. Hari, AdvocateFor Respondent: Sri MN Murthy Naik, CIT-DR
Section 142(1)Section 143(3)Section 153ASection 153C

No.185/Viz/2022 are similar to that of the facts in ITA No. 186/Viz/2022 except for the fact that the Ld. AO has made protective assessment of Rs. 2.50 Crs in the AY 2015- 16 and also based on the allegation by Sri Polisetty Shyam Sunder that amount

Deputy Commissioner of Income Tax, Central Circle-1, Guntur vs. Bolisetty Kameswara Rao, Guntur

Appeals are dismissed and the two Cross Objections of the assessee are disposed off accordingly

ITA 185/VIZ/2022[2014-15]Status: DisposedITAT Visakhapatnam07 Feb 2023AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./ I.T.A. No. 185 & 186/Viz/2022 ("नधा"रण वष" / Assessment Year :2014-15 & 2015-16) The Deputy Commissioner Of Vs. Sri Bolisetty Kameswara Rao, Income Tax, Central Circle-1, D.No.3-29-40/4, 2Nd Lane, 3Rd Floor, Rajkamal Complex, Krishna Nagar, Lakshmipuram Main Road, Guntur-522006. Guntur-522 007. Pan: Achpb 2189 A (अपीलाथ"/ Appellant) (""यथ"/ Respondent) C.O. No. 18 & 19/Viz/2022 आयकर अपील सं./ I.T.A. No. 185 & 186/Viz/2022 ("नधा"रण वष" / Assessment Year :2014-15 & 2015-16) The Deputy Commissioner Of Vs. Sri Bolisetty Kameswara Rao, Income Tax, Central Circle-1, D.No.3-29-40/4, 2Nd Lane, 3Rd Floor, Rajkamal Complex, Krishna Nagar, Lakshmipuram Main Road, Guntur-522006. Guntur-522 007. Pan: Achpb 2189 A (अपीलाथ"/ Appellant In Appeal) (""यथ"/ Respondent / Cross Objector) अपीलाथ" क" ओर से/ Assessee By : Sri G.V.N. Hari, Advocate ""याथ" क" ओर से / Revenue By : Sri Mn Murthy Naik, Cit-Dr

For Appellant: Sri G.V.N. Hari, AdvocateFor Respondent: Sri MN Murthy Naik, CIT-DR
Section 142(1)Section 143(3)Section 153ASection 153C

No.185/Viz/2022 are similar to that of the facts in ITA No. 186/Viz/2022 except for the fact that the Ld. AO has made protective assessment of Rs. 2.50 Crs in the AY 2015- 16 and also based on the allegation by Sri Polisetty Shyam Sunder that amount

Perfetti Van Melle India Pvt. Ltd., Gurgaon vs. ACIT, Circle-3(1), Gurgaon

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

ITA 888/DEL/2021[2009-10]Status: DisposedITAT Delhi01 Feb 2023AY 2009-10

Bench: Shri Anil Chaturvedi & Shri Yogesh Kumar U.S.

For Appellant: ShriFor Respondent: Shri Rajesh Kumar
Section 143(3)Section 144CSection 254Section 92C

underline genesis is application of BLT and determination of excessive AMP expenses and consequently making transfer pricing adjustment. Though the TPO has made protective assessment using BLT, but at the same time has proceeded to make substantive adjustment in his own version of profit split method (PSM). While applying

Shri Jaliluddin Jummat Ali Shekh, Rajkot vs. The ACIT-Central Circle-2, Rajkot

In the result, the appeal filed by the assessee is allowed

ITA 162/RJT/2022[2018-19]Status: DisposedITAT Rajkot11 Jan 2023AY 2018-19

Bench: Shri Waseem Ahmed & Shri T.R. Senthil Kumar

For Appellant: Shri Fenil H. Mehta, A.RFor Respondent: Shri Shramdeep Sinha, CIT. D.R
Section 132Section 153C

consideration that the department has made substantive additions in the hands of Hyderabad based seller M/s.Brij Mohan Jewellers, on thesame item, has deleted the protective assessment (pg.8 of the paper book para.5.3,3). (8) That as such the assessee has no point of grievance against the department. As per facts ... couriered on 25.10.2017 contained gold purchased by him on 26.10.2017, which was also received by him on 26-10.2017. As on date the protective assessment in his case has been deleted by Ld. CIT (A). By no stretch of imagination one can assume that gold purchased and handed over