Assessment of Ram Bhajan Ltd for Asst. Year 2018-19 was completed under section 143(3) by making additions of ₹25 lakhs to the income declared in the return. The assessee company filed an appeal before the Commissioner (

CS Professional · Direct Tax Law & Practice · PYQS · December 2020
Assessment of Ram Bhajan Ltd for Asst. Year 2018-19 was completed under section 143(3) by making additions of ₹25 lakhs to the income declared in the return. The assessee company filed an appeal before the Commissioner (Appeals) which is pending till date for adjudication. In this backdrop, answer the following in the context of provisions contained under the Income Tax Act, 1961: Can the Assessing Officer initiate reassessment proceedings u/s 148 when the appeal is pending before Commissioner (Appeals) for adjudication on the basis of fresh information that there was escapement of income for the same assessment year?

Answer & Explanation:

Assessing Officer as per the third proviso to section 147 of the Income tax Act, 1961, may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Therefore, even when an appeal is pending before Commissioner (Appeals), the Assessing Officer can initiate reassessment proceedings in respect of income chargeable to tax which has escaped assessment, and does not form part of the additions of ₹25 lakhs made to the returned income, which are the subject matter of appeal.

Topics: Assessment Procedures

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