Reassessment Proceedings: Navigating the Scope and Limitations under Income Tax Act

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..... Delhi High Court on the scope and limitations of reassessment proceedings u/s 147 of the Income Tax Act, 1961 . The judgment clarifies the legal position regarding the powers of the Assessing Officer (AO) to assess or reassess income during reassessment proceedings initiated u/s 147 / 148 of the Act. Arguments Presented The central issue before the Court was whether the AO, after initiating reass .....

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..... g Works P. Ltd. and V. Jaganmohan Rao , as well as the Division Bench judgments of the Delhi High Court in Ranbaxy Laboratories Ltd. and Monarch Educational Society . The Court observed that while the AO must have a valid reason to believe that income has escaped assessment to initiate reassessment proceedings, once the assessment is reopened, the AO is not confined to the specific issues mentione .....

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..... ies Ltd. and upheld the principle that while the AO's power to reassess is not limited to the specific issues mentioned in the reasons recorded u/s 148(2) , this power is subject to the caveat that if no additions or modifications are ultimately made concerning the issues that formed the basis for initiating reassessment, the AO cannot make additions or modifications concerning other issues de .....

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..... S COMMISSIONER OF INCOME-TAX AND EXCESS PROFITS-TAX, ANDHRA PRADESH - 1969 (7) TMI 4 - SUPREME COURT RANBAXY LABORATORIES LIMITED VERSUS COMMISSIONER OF INCOME TAX - 2011 (6) TMI 4 - DELHI HIGH COURT Commissioner of Income-Tax (Exemption) Versus Monarch Educational Society - 2016 (2) TMI 971 - DELHI HIGH COURT Comprehensive Summary The Delhi High Court, in this landmark judgment, has clarified the .....

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..... n or supplant those reasons. The Court has quashed the impugned notices and orders, leaving it open to the Revenue to take appropriate steps permissible under the law. This judgment reinforces the principle of adherence to the reasons recorded for initiating reassessment proceedings and provides clarity on the scope and limitations of the AO's powers during such proceedings. Full Text : 2024 ( .....

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