High Court of Delhi

Oriental Insurance Company v. Commissioner of Income Tax

MANU/DE/2677/2015

15.09.2015

Direct Taxation

Assessing Officer cannot reopen assessment on erroneous assumptions

To reopen a concluded income tax assessment for escaped income, a reason to suspect cannot be a reason to believe, which must be rational and bear a direct nexus to the material on which such a belief is based. The Court held that an Assessing Officer does not have jurisdiction to reopen an assessment for ‘believed’ escaped income, if such a belief is not based on tangible material or information. It noted, the Officer had reopened the assessment for escaped income on grounds other than those which suggested escaped income.

Relevant

Section 147 Income Tax Act, 1961 Act Commissioner of Income-Tax v. Kelvinator of India Ltd.: MANU/SC/0047/2010
Prabhu Dayal Rangwala v. Commissioner of Income-Tax: MANU/DE/0696/2015

Tags : Tax assessment escaped income belief

Share :