Jurisdiction in income tax reassessment proceedings is limited to the reasons recorded if no escapement of income is found for which reasons were recorded

0 comments Sunday, July 22, 2012
Bombay High Court in the following case namely CIT vs M S Sanklecha has held that reassessment order will be invalid if its based on the grounds other than the reasons recorded for the reopening of the case. This judgement of High Court again confirms the point that jurisdiction to make reassessment u/s 147/148 of Income Tax Act, 1961 is limited to the reasons recorded by AO for reopening the case.

Crux learning from the case: Section 147 has this effect that the Assessing Officer has to assess or reassess the income (“such income”) which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during the course of the proceedings. However, if after issuing a notice under Section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee
Read On
Subscribe to: Posts ( Atom )