Section 143 of the Income Tax Act
The decision most relied on for Section 143 is CIT v. Shri Samson Perinchery (392 ITR 4), cited in 376 of the 254 judgments on BharatTax that turn on this section.
Leading authorities on Section 143
A penalty levied under section 271(1)(c) of the Income-tax Act is unsustainable if it is initiated on one limb (e.g., concealment of income) but ultimately levied on the other limb (e.g., furnishing inaccurate particulars). This also applies if the initial penalty notice is vague or ambiguous regarding the specific charge.
An assessment order is not erroneous or prejudicial under Section 263 merely because it is silent on a claim or lacks explicit reasons for its acceptance. Revision under Section 263 is impermissible if the Assessing Officer has taken a plausible view, even if the PCIT holds a different opinion.
For the applicability of Section 271(1)(c) penalty, the Assessing Officer must be satisfied that the assessee concealed income or furnished inaccurate particulars; however, this satisfaction is not required to be recorded in a particular manner or reduced to writing.
Journal entries for accepting or repaying loans and deposits, without any actual cash transaction, do not violate the provisions of Section 269SS or Section 269T of the Income Tax Act. Consequently, such transactions do not attract penalties under Section 271D or Section 271E.
An assessee company receiving share application money from identified alleged bogus shareholders cannot have this amount treated as its undisclosed income under Section 68, provided the company furnishes the shareholders' identity, creditworthiness, and genuineness of transactions. The tax authorities must instead proceed against the individual shareholders.
For a penalty to be imposed under Section 271(1)(c) of the Income Tax Act, all statutory conditions specified in that section must explicitly exist. The liability arises when the particulars of income disclosed in the return of income are found to be inaccurate.
For a valid assessment under Section 153C against an 'other person', the Assessing Officer's satisfaction note must explicitly identify seized documents or assets found during a search that specifically belong to that 'other person'. Mere association or relationship with the searched assessee, without specific findings of belonging documents or assets, is insufficient to assume jurisdiction.
Penalty orders under section 271D or 271E passed beyond six months from the end of the month in which assessments were completed are barred by limitation. Section 275(1)(c) is applicable to such penalty proceedings, and the limitation period is not reckoned from the issue of a show cause notice.
A tax demand subsists even if the assessment order is set aside, and the date of the original assessment remains the relevant date. This principle clarifies that tax payment methods do not alter the fundamental liability to pay tax based on an assessment order.
A penalty under Section 271D cannot be imposed after the expiry of the larger period of limitation, which is reckoned from the date of the first show cause notice for initiating penalty proceedings.
Judgments on Section 143
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