Section 142(1) of the Income Tax Act
The decision most relied on for Section 142(1) is Collector, Land Acquisition v. Mst. Katiji (167 ITR 471), cited in 3,926 of the 9,716 judgments on BharatTax that turn on this section.
Leading authorities on Section 142(1)
Delay in filing appeals, when supported by sufficient or justifiable cause, should be condoned with a liberal approach to ensure substantial justice. This principle prioritizes the cause of justice over mere technicalities.
For revision under Section 263, the Assessing Officer's order must be both erroneous and prejudicial to the interests of the revenue; if either condition is not met, the revisionary jurisdiction cannot be invoked. An order is not erroneous merely because the Assessing Officer did not record the details of enquiries conducted, provided due enquiries were made.
An appeal before the Income Tax Appellate Tribunal can be dismissed for non-prosecution or treated as unadmitted when the appellant fails to appear, cooperate, or show diligence, in accordance with Rule 19(2) of the Income-tax (Appellate Tribunal) Rules. The law aids the vigilant, not those who sleep on their rights.
A court or tribunal is not bound to answer a reference or adjudicate an appeal on its merits if the party at whose instance the proceeding is made fails to appear at the hearing or take necessary steps for its proper conduct.
The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.
The principle of consistency dictates that if the facts and circumstances remain unchanged across assessment years, the revenue cannot adopt a divergent or adverse position on an issue that was previously allowed after due deliberation.
An appeal entails not only filing the memorandum of appeal but also actively and diligently pursuing it. Failure by the appellant to comply with notices and participate effectively in the appellate proceedings may lead to the appeal being decided ex-parte or dismissed.
An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.
Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.
Taxing statutes are presumed to operate prospectively unless a clear contrary intention for retrospective application is evident. The law applicable for determining tax liability is that which stands on the first day of the assessment year, following the principle that law looks forward, not backward (lex prospicit non respicit).
Judgments on Section 142(1)
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