Section 142A of the Income Tax Act
Income-tax Act, 2025: s.269
Section 142A of the Income-tax Act, 1961 corresponds to section 269 (Estimation of value of assets by Valuation Officer) of the Income-tax Act, 2025.
Read section 269 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 142A is CIT v. R.K.Construction Co. (313 ITR 65), cited in 86 of the 364 judgments on BharatTax that turn on this section.
Leading authorities on Section 142A
When the Assessing Officer conducts inquiries and accepts the assessee's explanation, the PCIT cannot invoke revisional powers under Section 263 solely due to a difference of opinion with the conclusion drawn by the AO.
Reopening an assessment is not permissible without fresh tangible material, merely on a change of opinion or a fresh application of mind to the same facts.
The Assessing Officer cannot make additions to income solely based on a Valuation Officer's report under Section 55A or 142(2), particularly for unexplained investments or expenditure under Section 69B, as the AO is the primary fact-finding authority (this was the position pre-Section 142A).
A taxing statute must be strictly construed: the subject is not to be taxed unless the charging provision clearly and explicitly imposes the obligation, without room for intendment or implication. There is no equity about a tax, and nothing is to be read into or implied within the language used.
Additions cannot be made to assessments under Sections 153A and 153C if no incriminating material was found during a search operation. Assessments for each year preceding the search are distinct and separate.
Additions made by the Assessing Officer solely on the basis of a retracted statement under section 132(4) cannot be sustained without corroborating evidence, such as the recovery of assets, at the time of the search.
A direction for special audit under Section 142(2A), issued near the expiry of the limitation period primarily to gain an extension of time or with instructions beyond the section's scope, is illegal, rendering the subsequent assessment time-barred.
Share premium and share application money cannot be added as unexplained cash credits under Section 68 if the genuineness of the transaction and the creditworthiness and identity of the investors are established. The onus is on the revenue authorities to prove that the apparent nature of the receipt is not real.
When estimating construction costs or expenditure for assessment, local PWD rates must be preferred over CPWD rates, as CPWD rates are generally higher.