M/S King Exports Thru Madan Lal v. Commissioner of Income Tax, Ludhiana

Punjab & Haryana HC4 Nov 2025ITA/96/2012

Case brief

AI extract

What is this about?

Keywords: ITA-96-2012 (O&M); Section 147 income escaping assessment; Section 148 notice of reassessment; recording of reasons by Assessing Officer before notice; four-year limit from end of relevant assessment year; escape by failure to disclose fully and truly all material facts; deemed escape cases — no return, understated income, excessive loss/deduction/allowance, international transaction report under section 92E, information under sub-section (2) of section 133C, asset located outside India; Finance Act, 2012 amendments applicable to assessment years beginning on or before 01.04.2012; deemed valid notices for returns furnished 01.10.1991–30.09.2005. Judgment body (parties, arguments, findings, result) not legible in source.

What the court decided

M/S King Exports Thru Madan Lal Vs Commissioner of Income Tax, Ludhiana — Punjab & Haryana HC (2025) — LawSathi Research

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ITA-96-2012 (O&M)

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ITA-96-2012 (O&M)

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ITA-96-2012 (O&M)

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₹ ₹

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ITA-96-2012 (O&M)

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ITA-96-2012 (O&M)

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ITA-96-2012 (O&M)

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Income escaping assessment.

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147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) :

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ITA-96-2012 (O&M)

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Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:

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Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:

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Provided also that the Assessing Officer 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.

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Explanation 1. —Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.

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Explanation 2. —For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :—

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( a ) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax ;

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( b ) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ;

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( ba ) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E;

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( c ) where an assessment has been made, but—

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( i ) income chargeable to tax has been underassessed ; or

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( ii ) such income has been assessed at too low a rate ; or

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( iii ) such income has been made the subject of excessive relief under this Act ; or

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( iv ) excessive loss or depreciation allowance or any other allowance under this Act has been computed;

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( ca ) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;

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( d ) where a person is found to have any asset (including financial interest in any entity) located outside India.

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Explanation 3. —For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section,

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ITA-96-2012 (O&M)

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notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148.

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Explanation 4. —For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.

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Issue of notice where income has escaped assessment-

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148. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :

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Provided that in a case—

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( a ) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and

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( b ) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in subsection (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:

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Provided further that in a case—

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( a ) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and

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( b ) subsequently a notice has been served under clause ( ii ) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause ( ii ) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.

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Explanation. —For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.

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(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.”

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

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SUNIL 2025.11.07 13:52 I attest to the accuracy and authenticity of this document

M/S King Exports Thru Madan Lal v. Commissioner of Income Tax, Ludhiana

Case brief

What is this about?

What the court decided

M/S King Exports Thru Madan Lal v. Commissioner of Income Tax, Ludhiana

Case brief

What is this about?

What the court decided

Statutes considered

Case details

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