Section 142(3) of the Income Tax Act
Income-tax Act, 2025: s.268
Section 142(3) falls under section 142 of the Income-tax Act, 1961, which corresponds to section 268 (Inquiry before assessment) of the Income-tax Act, 2025.
Read section 268 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 142(3) is 35 ITR 1 (SC), CIT v. A. Raman and Co. (82 ITR 831), cited in 44 of the 102 judgments on BharatTax that turn on this section.
Leading authorities on Section 142(3)
Reassessment under Section 147 is not permissible solely on a mere change of opinion or a reconsideration of the same material. The Assessing Officer loses jurisdiction to proceed with reassessment if the initial grounds for believing income has escaped assessment are subsequently found to be incorrect or non-existent.
Where an assessee-company receives share application money with a high and unjustified share premium from corporate entities, the Assessing Officer is not justified in accepting the transactions as genuine solely because the amounts were received through banking channels, without conducting proper inquiries.
An assessment is invalid if it relies on third-party statements without providing the assessee an opportunity to cross-examine those witnesses, violating natural justice.
