Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
Open DEMAT Account with in 24 Hrs and start investing now!
ITAT-Constitution of Benches »
Open DEMAT Account in 24 hrs
 Mere Securing a House on Rent in USA is not conclusive fact that Assessee is US Resident to Allow DTAA Benefit: ITAT
 20 LPA Opening Hiring Qualified CA For Assurance Manager Profile
 Non-Filing of Income Tax Return amounts to Escapement of Income: ITAT upholds Reassessment u/s 147
 Non Appreciation of facts in true perspective: ITAT sets aside Revision Order
 No Evidence of Tax Evasion by showing Fictitious or False Transactions: ITAT deletes Addition of Expenditure u/s 40A(3)
 Earning Interest Income from Inter-Corporate Deposit is Business Income: ITAT
 Income Tax Penalty u/s 271E cannot be levied in the absence of Regular Assessment: ITAT
 ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner
 Payment for Facebook Ads and Other Digital Advertising Companies not subject to TDS as per DTAA: ITAT
 No Service Tax Leviable on Goods component of Composite Works Contract as VAT has been paid: CESTAT
 ITAT deletes Addition on Account of Investment made from Undisclosed Sources as all Transactions were made through Banking Channels
 Relief to Honda: ITAT directs AO to delete Addition on account of Capitalisation of Royalty Expenses by Holding it to be Revenue in Nature
 Minimising tax liabilities by lawful means not illegal, says ITAT

Non-Filing of Income Tax Return amounts to Escapement of Income: ITAT upholds Reassessment u/s 147
November, 10th 2022

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently, in an appeal filed before it, while upholding the reassessment under section 147 of the Income Tax Act, 1961, held that non filing of income tax return amounts to escapement of income.

The aforesaid observation was made by the Mumbai lTAT when an appeal was preferred before it an appellant, as against the order dated 16/10/2019, passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals) Mumbai, for the assessment year 2010–11.

The facts of the case were that the assessee was an individual who was engaged in the business of trading in shares. The assessee was also the director of M/s Sanghi Corporate Service Ltd, and for the year under consideration, the he did not file his return of income.


Subsequently, on the basis of information received from ITD systems, reassessment proceedings were initiated against the assessee and notice under section 148 of the Income Tax Act was issued on 17/03/2015 after recording of reasons. And in response to the same, the assesse had electronically filed the return of income on 02/04/2015, declaring his total income as NIL.

Pursuant thereto, statutory notices under section 143(2) and 142(1) of the Act were issued and the assessee filed its reply to the information/details sought. And after considering the submissions of the assessee, the Assessing Officer (AO) vide his order dated 10/02/2016, passed under section 143(3) r/w section 147 of the Income Tax Act, assessed the total income at Rs. 44,50,240, after making certain additions to the income returned by the assessee.

And against the same, the assessee had preferred an appeal before the CIT(A), but the addition being made by the AO being confirmed by the CIT(A), the assessee was left with no other option but to prefer the instant appeal before the ITAT Bench.

With Shri Piyush Chhajed  along with  Shri Sumit Mantri, submitting on behalf of the assesse that the assessee had no taxable income during the year under consideration and  it was because of the same that no return of income was filed by the assessee, and further that it was merely on the basis that cash had been deposited by the assessee, that the proceedings under section 147 were initiated by the AO,  Shri Ajeya Kumar Ojha , the DR  for the Revenue submitted that no return was filed by the assessee for the year under consideration and  that after receipt of the information from ITD system, facts were verified.

He also added that it was noticed that the assessee had entered into certain transactions viz. cash deposit of Rs. 50,000 and more, share transaction of Rs. 20,000, or more and TDS return in respect of interest other than interest on securities, during the year under consideration, and that despite these said transactions, the assessee did not file the return of income.


Hearing the opposing contentions of both the sides and perusing the materials available on record, the ITAT Bench consisting of Om Prakash Kant, the Accountant Member, along with Sandeep Singh Karhail, the Judicial Member, observed:

“If there is reasonable information on the basis of which reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proceedings under section 147 of the Act can be validly initiated. Further, it is also well settled that sufficiency or correctness of the material is not a thing to be considered at the stage of recording of reasons.”

“Therefore, we are of the considered view that the AO had “reason to believe” on the basis of tangible material for initiating proceedings under section 147 of the Income Tax Act.”, dismissing the asssessee’s claim, the ITAT Bench ruled.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2023 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting