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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

Sri Basaveshwar Veerashaiva Vidyavardhak Sangha, Bagalkot vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bengaluru

In the result, the assessee’s appeals in ITA Nos

ITA 2776/BANG/2017[2013-14]Status: DisposedITAT Bangalore29 Aug 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 10Section 11Section 12ASection 35ASection 80G

years 2012-13 to 2014-15. ITA Nos.235 & 236/Bang/2018 by revenue are against the order of Ld. CIT(A), which is emanated from the protective assessment order. 2. At the time of hearing, the assessee has not pressed the appeal No.2775/Bang/2017 & 2777/Bang/2018 for which Ld. A.R. made an endorsement. Hence

Sri Basaveshwar Veershaiva Vidyavardhak Sangha, Bagalkot vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bengaluru

In the result, the assessee’s appeals in ITA Nos

ITA 2775/BANG/2017[2012-13]Status: DisposedITAT Bangalore29 Aug 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri S. Ramasubramanian, A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 10Section 11Section 12ASection 35ASection 80G

years 2012-13 to 2014-15. ITA Nos.235 & 236/Bang/2018 by revenue are against the order of Ld. CIT(A), which is emanated from the protective assessment order. 2. At the time of hearing, the assessee has not pressed the appeal No.2775/Bang/2017 & 2777/Bang/2018 for which Ld. A.R. made an endorsement. Hence

Mayur Vinod Faria, Mumbai vs. DCIT (OSD) II Cen RG 7, Mumbai

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

ITA 5932/MUM/2017[2008-09]Status: DisposedITAT Mumbai20 Jul 2022AY 2008-09
For Appellant: Ms. Hiral SejpalFor Respondent: Shri Achal Sharma (DR) & Ms
Section 271ASection 4

Faria and the AO while framing the quantum assessment has made substantive assessment in the hands of the father Shri Vinod K. Faria and protective assessment in the hands of Shri Mayur Vinod Faria (assessee) in this case. And this Tribunal was pleased to restore the appeal of Shri Vinod ... been restored back to the file of Ld. CIT(A), there is no point in keeping the appeal of the assessee against whom protective assessment order has been passed by the AO vide order dated 28.12.2020. In such a scenario, we are inclined to set aside the impugned order

Mayur Vinod Faria, Mumbai vs. DCIT (OSD) -II Cen RG 7, Mumbai

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

ITA 3805/MUM/2013[2008-09]Status: DisposedITAT Mumbai20 Jul 2022AY 2008-09
For Appellant: Ms. Hiral SejpalFor Respondent: Shri Achal Sharma (DR) & Ms
Section 271ASection 4

Faria and the AO while framing the quantum assessment has made substantive assessment in the hands of the father Shri Vinod K. Faria and protective assessment in the hands of Shri Mayur Vinod Faria (assessee) in this case. And this Tribunal was pleased to restore the appeal of Shri Vinod ... been restored back to the file of Ld. CIT(A), there is no point in keeping the appeal of the assessee against whom protective assessment order has been passed by the AO vide order dated 28.12.2020. In such a scenario, we are inclined to set aside the impugned order

Mehul Gems Pvt. Ltd, Mumbai vs. ACIT CC-1(3), Mumbai

In the result, both the appeals filed by the different assessees are allowed in terms as indicated above

ITA 384/MUM/2022[2015-16]Status: DisposedITAT Mumbai19 Jul 2022AY 2015-16

Bench: Shri Amit Shukla, Jm & Shri S. Rifaur Rahman, Am 1. आयकरअपीलसं./ I.T.A. No. 384/Mum/2022 (ननधधारणवर्ा / Assessment Year: 2015-16)

For Appellant: Shri Suchek Anchaliya &For Respondent: Shri Mahita Nair, Ld. DR
Section 143(3)Section 147Section 251(2)

observation are reproduced hereunder:- 9.1 The claim of the Appellant that for A.Y. 2007-08 to 2014-15, the CIT(A) has deleted the protective assessment, will not hold good any more after the receipt of the judgment of Hon'ble ITAT in the case of Shri Bhanwarlal M. Jain

Rare Diamonds Pvt. Ltd, Mumbai vs. ACIT CC 1(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 313/MUM/2022[2015-16]Status: DisposedITAT Mumbai27 Jun 2022AY 2015-16

Bench: Shri Kuldip Singh & Shri Om Prakash Kantsr

For Appellant: Shri Suchek AnchaliayaFor Respondent: Shri. Kiran P. Unavekar
Section 132

White Stone & Ors., Mumbai . 9.1 The claim of the Appellant that for A.Y. 2007-08 to 2014-15, the CIT(A) has deleted the protective assessment, will not hold good any more after the receipt of the judgment of Hon'ble ITAT in the case of Shri Bhanwarlal M. Jain

Ghanshyam Vashishta, Surat vs. ACIT CC-1(3), Mumbai

In the result, all the appeals filed by the different assessees are allowed in terms as indicated above

ITA 341/MUM/2022[2015-16]Status: DisposedITAT Mumbai24 Jun 2022AY 2015-16

Bench: Shri Amit Shukla, Jm & Shri Amarjit Singh, Am

Section 143(3)

observation are reproduced hereunder:- 9.1 The claim of the Appellant that for A.Y. 2007-08 to 2014-15, the CIT(A) has deleted the protective assessment, will not hold good any more after the receipt of the judgment of Hon'ble ITAT in the case of Shri Bhanwarlal M. Jain

M/S.Brindavan Beverages Pvt. Ltd., Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

ITA 2003/BANG/2016[2012-13]Status: DisposedITAT Bangalore13 Jun 2022AY 2012-13

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Dilip, Standing Counsel for the Dept
Section 115JSection 132Section 133ASection 139(1)Section 143Section 148Section 153ASection 234

validity of a search cannot be questioned before him and rejected the legal grounds raised before him. On merits the CIT(A) deleted the protective assessment of deemed dividend. However the CIT(A) retained the assessment of book profits without going into the merits stating that that the assessee

M/S.Brindavan Beverages Pvt. Ltd., Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

ITA 2002/BANG/2016[2011-12]Status: DisposedITAT Bangalore13 Jun 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Dilip, Standing Counsel for the Dept
Section 115JSection 132Section 133ASection 139(1)Section 143Section 148Section 153ASection 234

validity of a search cannot be questioned before him and rejected the legal grounds raised before him. On merits the CIT(A) deleted the protective assessment of deemed dividend. However the CIT(A) retained the assessment of book profits without going into the merits stating that that the assessee

M/S.Brindavan Beverages Pvt. Ltd., Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

ITA 1999/BANG/2016[2008-2009]Status: DisposedITAT Bangalore13 Jun 2022AY 2008-2009

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Dilip, Standing Counsel for the Dept
Section 115JSection 132Section 133ASection 139(1)Section 143Section 148Section 153ASection 234

validity of a search cannot be questioned before him and rejected the legal grounds raised before him. On merits the CIT(A) deleted the protective assessment of deemed dividend. However the CIT(A) retained the assessment of book profits without going into the merits stating that that the assessee

Vijay Kumar, Mumbai vs. Asst CIT Cen Cir 13, Mumbai

In the result, appeal of the assessee is allowed

ITA 5755/MUM/2013[2010-11]Status: DisposedITAT Mumbai31 May 2022AY 2010-11

Bench: This Tribunal. The Assessee Had Filed A Condonation Petition Together With His Affidavit & Also An Affidavit From The Chartered Accountant Of The Assessee Narrating The Facts & Explaining The Reasons For Delay. We Have Gone Through Those Documents & We Are Convinced That Assessee Was Prevented From Reasonable Cause In Not Filing The Appeal Before Us Within The Prescribed Time. Hence, We Deem It Fit & Appropriate To Condone The Delay In Filing Of Appeal By The Assessee & Admit The Appeal For Adjudication.

Section 143(3)

there is some doubt in the minds of the Revenue as to in whose hands a particular income should be assessable. The concept of protective assessment is provided only to protect the interest of the Revenue. Hence, it is logical that first the substantive assessment 3 Shri Vijay Kumar should ... made in the hands of one person and the same should be followed by protective assessment in the hands of another person. Ideally both the substantive and protective assessments should be framed simultaneously. From the facts narrated above, it is apparently clear that no substantive addition was made

DCIT-CC 3(2), Mumbai vs. Chintamani Textiles Pvt. Ltd., Mumbai

In the result, the appeals filed by the revenue are hereby

ITA 1879/MUM/2019[2012-13]Status: DisposedITAT Mumbai27 May 2022AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri Gagan Goyal, Am आयकर अपील सं/ I.T.A. Nos. 1878 & 1879/Mum/2019 (निर्धारण वर्ा / Assessment Years:2011-12 & 2012-13) Dcit-Cc 3(2) बिधम/ Chintamani Textiles Pvt. Ltd. Room No.1913, Air India Mezanine Office No.2, Sujata Vs. Building, Nariman Point, Chambers, Narshi Natha Mumbai-400021. Street, Mumbai-400064. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaccc744Od (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri H. N. Singh (Dr) Assessee By: None सुनवाई की तारीख / Date Of Hearing: 10/05/2022 घोषणा की तारीख /Date Of Pronouncement: 27/05/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: These Appeals Are Against The Order Of The Ld. Cit(A)-51, Mumbai Dated 29.01.2019 For A.Y. 2011-12 & For A.Y.2012-13. 2. None Appeared For The Assessee Despite Notices. The Ld. Cit Dr Has Brought To Our Notice Reports Submitted By Ao On The Lis, Which According To Us Will Be Sufficient To Dispose Of Both The Appeals Of Revenue. 3. For A.Y.2011-12, The Revenue Is Aggrieved By The Action Of The Ld. Cit(A) Deleting The Protective Addition Of Rs.3,35,00,000/- On The Issue Of Unaccounted Investment & Rs.9,30,500/- On The Issue Of Unaccounted Commission U/S 69C Of The Act & For A.Y.2012-13, The Revenue Is Aggrieved By The Action Of The Ld. Cit(A) Deleting The Protective Addition Of Rs.6,88,00,000/- On The Issue Of Unaccounted

For Appellant: NoneFor Respondent: Shri H. N. Singh (DR)
Section 132Section 132(4)Section 143(1)Section 143(3)Section 153ASection 68Section 69C

adopt the figure accordingly in respect of the substantive addition in respect of M/s. Starwood Exports Pvt. Ltd and corresponding action of protective assessment accordingly in the hands of the assessee company. 8. Coming to the case of M/s. Firstwinner Textile (India) Pvt. Ltd., the Ld. CIT(A) noted that

DCIT-CC 3(2), Mumbai vs. Chintamani Textiles Pvt. Ltd., Mumbai

In the result, the appeals filed by the revenue are hereby

ITA 1878/MUM/2019[2011-12]Status: DisposedITAT Mumbai27 May 2022AY 2011-12

Bench: Shri Aby T. Varkey, Jm & Shri Gagan Goyal, Am आयकर अपील सं/ I.T.A. Nos. 1878 & 1879/Mum/2019 (निर्धारण वर्ा / Assessment Years:2011-12 & 2012-13) Dcit-Cc 3(2) बिधम/ Chintamani Textiles Pvt. Ltd. Room No.1913, Air India Mezanine Office No.2, Sujata Vs. Building, Nariman Point, Chambers, Narshi Natha Mumbai-400021. Street, Mumbai-400064. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaccc744Od (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri H. N. Singh (Dr) Assessee By: None सुनवाई की तारीख / Date Of Hearing: 10/05/2022 घोषणा की तारीख /Date Of Pronouncement: 27/05/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: These Appeals Are Against The Order Of The Ld. Cit(A)-51, Mumbai Dated 29.01.2019 For A.Y. 2011-12 & For A.Y.2012-13. 2. None Appeared For The Assessee Despite Notices. The Ld. Cit Dr Has Brought To Our Notice Reports Submitted By Ao On The Lis, Which According To Us Will Be Sufficient To Dispose Of Both The Appeals Of Revenue. 3. For A.Y.2011-12, The Revenue Is Aggrieved By The Action Of The Ld. Cit(A) Deleting The Protective Addition Of Rs.3,35,00,000/- On The Issue Of Unaccounted Investment & Rs.9,30,500/- On The Issue Of Unaccounted Commission U/S 69C Of The Act & For A.Y.2012-13, The Revenue Is Aggrieved By The Action Of The Ld. Cit(A) Deleting The Protective Addition Of Rs.6,88,00,000/- On The Issue Of Unaccounted

For Appellant: NoneFor Respondent: Shri H. N. Singh (DR)
Section 132Section 132(4)Section 143(1)Section 143(3)Section 153ASection 68Section 69C

adopt the figure accordingly in respect of the substantive addition in respect of M/s. Starwood Exports Pvt. Ltd and corresponding action of protective assessment accordingly in the hands of the assessee company. 8. Coming to the case of M/s. Firstwinner Textile (India) Pvt. Ltd., the Ld. CIT(A) noted that

Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore vs. Shri. T. Nadakrishna, Bangalore

In the result, assessee’s appeal in ITA No

ITA 575/BANG/2020[2007-08]Status: DisposedITAT Bangalore27 May 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

M/S. Spr Spirits Private Limited (Formerly Known As Spr Group Holdings Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, assessee’s appeal in ITA No

ITA 127/BANG/2020[2007-08]Status: DisposedITAT Bangalore27 May 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

M/S Spr Spirits Pvt. Ltd., Bengaluru vs. Deputy Commissioner of Income Tax Central Circle -1 (3), Bengaluru

In the result, assessee’s appeal in ITA No

ITA 1661/BANG/2018[2011-12]Status: DisposedITAT Bangalore27 May 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

M/S Spr Spirits Pvt. Ltd., Bengaluru vs. Deputy Commissioner of Income Tax Central Circle -1 (3), Bengaluru

In the result, assessee’s appeal in ITA No

ITA 1660/BANG/2018[2010-11]Status: DisposedITAT Bangalore27 May 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

M/S Spr Spirits Pvt.Ltd., Bengaluru vs. Deputy Commissioner of Income Tax Central Circle -1 (3), Bengaluru

In the result, assessee’s appeal in ITA No

ITA 1659/BANG/2018[2009-10]Status: DisposedITAT Bangalore27 May 2022AY 2009-10

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

M/S Spr Spirits Pvt. Ltd., Bengaluru vs. Deputy Commissioner of Income Tax Central Circle - 1 (3), Bengaluru

In the result, assessee’s appeal in ITA No

ITA 1658/BANG/2018[2008-09]Status: DisposedITAT Bangalore27 May 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Bharath L., A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 132Section 153ASection 37(1)Section 40A(3)

appeal by revenue in ITA No.575/Bang/2020 which emanated from the CIT(A) order dated 27.2.2020, which is in turn emanated from the protective assessment order dated 25.3.2014. The assessee also filed a cross objection in support of the order of CIT(A) dated 27.2.2020 in the case of that assessee

Assistant Commissioner of Income Tax Central Circle-2(3), Bangalore vs. M/S Conc Shade Constructions Pvt Ltd, Chikkamangalur

In the result, all the appeals by the assessee are partly allowed for statistical purposes

ITA 301/BANG/2018[2012-13]Status: DisposedITAT Bangalore20 Apr 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Sankar Ganesh K., Jt.CIT(DR)(ITAT), Bengaluru
Section 132Section 153CSection 2Section 292C

deleting the protective additions on account of undisclosed investment of Rs.1,10,93,254/- whereas Gujarat High Court in 140 ITR 517 settled that protective assessment should not be decided till substantive assessment reaches finality. 4. Whether on the facts and the circumstances of the case ... funds and add the same as undisclosed income of the Assessee Company. 46. The fact that the AO has also protectively assessed this impugned undisclosed investment also in the hands of Shri. H.B.Sudarshan, makes it is evident that the AO himself is not convinced of the fact that the impugned