S. 147: Even s. 143(1) Intimation cannot be reopened in the absence of new information

Mohan Gupta (HUF) vs. CIT (Delhi High Court)

S. 147: Even s. 143(1) Intimation cannot be reopened in the absence of new information


The reassessment is not on the basis of new information or facts that have come to the fore now, but rather, a re-appreciation or review of the facts that were provided along with the original return filed by the assesse. The record does not show any tangible material that created the reason to believe that income had escaped. Rather, the reassessment proceedings amount to a review or change of opinion carried out in the earlier A.Y. 2005-06, which amounts to an abuse of power and is impermissible. In response, it is argued that since the return was processed under Section 143(1) for the A.Y. 2005-06, which involves a mere intimation, rather than an application of mind or true assessment of the return, a less stringent threshold must be taken in terms of ‘reasons to believe’ that income has escaped assessment or not. This precise argument, however, has been considered and rejected by this Court in CIT v. Orient Craft [2013] 354 ITR 536 (Delhi)

Sec. 147: Failure To Compute Capital Gains U/s 50C Does Not Lead To Escapement Of Income

ITO vs. Haresh Chand Agarwal HUF (ITAT Agra)

S. 147: Failure to compute capital gains u/s 50C does not lead to escapement of income


The assessee sold property for Rs.6 lakh and offered capital gains on that basis. The AO accepted the claim without examining the applicability of s. 50C. He later (within 4 years from the end of the AY) reopened the assessment on the basis that the stamp duty valuation was Rs. 25 lakhs and the capital gains had to computed on that basis u/s 50C. The assessee challenged the reopening inter alia on the ground that the failure to apply s. 50C did not mean income had escaped assessment. The CIT(A) accepted the plea. On appeal by the department to the Tribunal HELD dismissing the appeal:

S. 50C is not a final determination to prove that it is a case of escapement of income. The report of the approved valuer may give estimated figure on the basis of facts of each case. Therefore, mere applicability of s. 50C would not disclose any escapement of income in the facts and circumstances of the case. The AO at the original assessment stage considered all the documents and material produced before him and has accepted the cost of property as was declared by the assessee. The reassessment is on change of opinion which is not justified

Note: On the question whether failure to voluntarily apply s. 50C attracts s. 271(1)(c) penalty see Madan Theatres (Cal HC), Renu Hingorani (ITAT Mum) & Chimanlal Manilal Patel (ITAT Ahd)