My return was only processed under 143(1). Does that stop the department reopening it later?
No. An intimation under s.143(1) is not an assessment, so it does not bar the officer from later starting reassessment proceedings.
Decided by the Supreme Court (Dr. Arijit Pasayat and D.K. Jain, JJ. (judgment delivered by Dr. Arijit Pasayat, J.)) on 2007-05-23, reported as [2007] 291 ITR 500 (SC); [2007] 210 CTR 30 (SC); [2007] 161 Taxman 316 (SC); AIR 2007 SC 2163; (2008) 14 SCC 208; Civil Appeal No. 2830 of 2007. It bears on section 143(1), section 143(1)(a), section 143(3), section 147, section 148 of the Income Tax Act 1961, in Assessment & Scrutiny and Reassessment & Reopening matters.
This one favours the department. It is on this site precisely because you need to know what the other side will cite — an argument built on 'my return was accepted under 143(1)' runs straight into it.
Binding on every court and authority in India.
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The assessee, a private limited company, filed its return for assessment year 2001-02 on 30 October 2001 declaring a total loss of Rs.2,70,85,105. The return was processed under s.143(1) on 26 November 2001, the returned loss being accepted. The revenue audit then raised an objection to a debit of Rs.1,285.72 lakhs as bad debt out of total expenditure of Rs.1,307.64 lakhs, the conditions in s.36(1)(vii) read with s.36(2) not having been satisfied, and the Assessing Officer issued a notice under s.148 dated 12 May 2004. The assessee filed a return under protest at the same figure, obtained the recorded reasons, and objected on jurisdiction and on merits; the Assessing Officer rejected those objections on 4 February 2005, holding the reassessment validly initiated. The assessee's writ petition against the s.148 notice was allowed by a Division Bench of the Gujarat High Court, following that court's decision in Adani Exports v. Dy. CIT.
The appeal was allowed, without any order as to costs (para 20). An intimation under s.143(1)(a) cannot be treated as an order of assessment: since 1 April 1989 the requirement of passing an assessment order where the return is accepted has been dispensed with and an intimation is sent instead, and under the first proviso to the substituted s.143(1) the mere acknowledgement of the return counts as the intimation - an acknowledgement given not by any Assessing Officer but mostly by ministerial staff, who make no assessment at all (para 13). It follows that there being no assessment under s.143(1)(a), the question of a change of opinion does not arise (para 13). So long as the ingredients of s.147 are fulfilled the Assessing Officer is free to initiate proceedings under it, and a failure to take steps under s.143(3) does not render him powerless to reassess even where an intimation under s.143(1) has issued (para 18). The High Court had wrongly applied Adani Exports, which had no application on the facts given the conceptual difference between s.143(1) and s.143(3) (para 19). The Court declined to examine other points said to be available to the assessee, none having been urged before the High Court (para 20).
The Court traced the successive versions of s.143(1). Up to 31 March 1989 the officer made an assessment under s.143(1) and issued an assessment order if he accepted the return; from 1 April 1989 a new scheme substituted an intimation for that order (paras 11 and 13). Under the first proviso to s.143(1)(a) only three adjustments were permitted - rectification of apparent arithmetical errors in the return, accounts or accompanying documents, allowance of a loss carried forward, deduction, allowance or relief prima facie admissible on the information in the return but not claimed, and disallowance of one claimed but prima facie inadmissible. What was permissible was correction of errors apparent on the documents accompanying the return; the officer had no authority to adjudicate a debatable issue and no power to go behind the return, accounts or documents in either direction (para 12). Because no opportunity of being heard is given under s.143(1)(a), the officer must proceed by accepting the return and making only the permissible adjustments, which is why the legislative substitution of 'intimation' for 'assessment' marks two different concepts (para 13). The deeming of the intimation to be a notice of demand under s.156 was for the limited purpose of attracting the recovery machinery, and nothing more can be inferred from it (para 13). On s.147, 'reason' in 'reason to believe' means cause or justification; the officer need not have finally ascertained the fact by legal evidence, and at the stage of issuing notice the only question is whether there was relevant material on which a reasonable person could have formed the requisite belief, the formation of belief being within the realm of subjective satisfaction (para 16). The Court also noted the change in the provision itself: under the old s.147(a) two conditions had to be satisfied, but under s.147 as substituted with effect from 1 April 1989 the existence of the first condition alone suffices, though both must be met where the case falls within the proviso - and this case fell under the main provision, not the proviso (para 17).
So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued.
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Handle my notice → Ask a CA on WhatsAppNo. An intimation under s.143(1) is not an assessment, so it does not bar the officer from later starting reassessment proceedings. This was decided by the Supreme Court (Dr. Arijit Pasayat and D.K. Jain, JJ. (judgment delivered by Dr. Arijit Pasayat, J.)) and bears on section 143(1), section 143(1)(a), section 143(3), section 147, section 148 of the Income Tax Act 1961. It is reported as [2007] 291 ITR 500 (SC); [2007] 210 CTR 30 (SC); [2007] 161 Taxman 316 (SC); AIR 2007 SC 2163; (2008) 14 SCC 208; Civil Appeal No. 2830 of 2007. This one favours the department. It is on this site precisely because you need to know what the other side will cite — an argument built on 'my return was accepted under 143(1)' runs straight into it. If it applies to you, the first step is this: Do not build a reopening defence on the fact that a 143(1) intimation was issued.
The assessee, a private limited company, filed its return for assessment year 2001-02 on 30 October 2001 declaring a total loss of Rs.2,70,85,105. The return was processed under s.143(1) on 26 November 2001, the returned loss being accepted. The revenue audit then raised an objection to a debit of Rs.1,285.72 lakhs as bad debt out of total expenditure of Rs.1,307.64 lakhs, the conditions in s.36(1)(vii) read with s.36(2) not having been satisfied, and the Assessing Officer issued a notice under s.148 dated 12 May 2004. The assessee filed a return under protest at the same figure, obtained the recorded reasons, and objected on jurisdiction and on merits; the Assessing Officer rejected those objections on 4 February 2005, holding the reassessment validly initiated. The assessee's writ petition against the s.148 notice was allowed by a Division Bench of the Gujarat High Court, following that court's decision in Adani Exports v. Dy. CIT. The matter was decided on 2007-05-23 by the Supreme Court (Dr. Arijit Pasayat and D.K. Jain, JJ. (judgment delivered by Dr. Arijit Pasayat, J.)). On those facts the Supreme Court held as follows. The appeal was allowed, without any order as to costs (para 20). An intimation under s.143(1)(a) cannot be treated as an order of assessment: since 1 April 1989 the requirement of passing an assessment order where the return is accepted has been dispensed with and an intimation is sent instead, and under the first proviso to the substituted s.143(1) the mere acknowledgement of the return counts as the intimation - an acknowledgement given not by any Assessing Officer but mostly by ministerial staff, who make no assessment at all (para 13). It follows that there being no assessment under s.143(1)(a), the question of a change of opinion does not arise (para 13). So long as the ingredients of s.147 are fulfilled the Assessing Officer is free to initiate proceedings under it, and a failure to take steps under s.143(3) does not render him powerless to reassess even where an intimation under s.143(1) has issued (para 18). The High Court had wrongly applied Adani Exports, which had no application on the facts given the conceptual difference between s.143(1) and s.143(3) (para 19). The Court declined to examine other points said to be available to the assessee, none having been urged before the High Court (para 20).
The Court traced the successive versions of s.143(1). Up to 31 March 1989 the officer made an assessment under s.143(1) and issued an assessment order if he accepted the return; from 1 April 1989 a new scheme substituted an intimation for that order (paras 11 and 13). Under the first proviso to s.143(1)(a) only three adjustments were permitted - rectification of apparent arithmetical errors in the return, accounts or accompanying documents, allowance of a loss carried forward, deduction, allowance or relief prima facie admissible on the information in the return but not claimed, and disallowance of one claimed but prima facie inadmissible. What was permissible was correction of errors apparent on the documents accompanying the return; the officer had no authority to adjudicate a debatable issue and no power to go behind the return, accounts or documents in either direction (para 12). Because no opportunity of being heard is given under s.143(1)(a), the officer must proceed by accepting the return and making only the permissible adjustments, which is why the legislative substitution of 'intimation' for 'assessment' marks two different concepts (para 13). The deeming of the intimation to be a notice of demand under s.156 was for the limited purpose of attracting the recovery machinery, and nothing more can be inferred from it (para 13). On s.147, 'reason' in 'reason to believe' means cause or justification; the officer need not have finally ascertained the fact by legal evidence, and at the stage of issuing notice the only question is whether there was relevant material on which a reasonable person could have formed the requisite belief, the formation of belief being within the realm of subjective satisfaction (para 16). The Court also noted the change in the provision itself: under the old s.147(a) two conditions had to be satisfied, but under s.147 as substituted with effect from 1 April 1989 the existence of the first condition alone suffices, though both must be met where the case falls within the proviso - and this case fell under the main provision, not the proviso (para 17). In the words reproduced by the source cited on this page: "So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued." The decision followed or applied ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC) (followed and relied upon); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC) (followed and relied upon); Adani Exports v. Dy. CIT [1999] 240 ITR 224 (Guj.) (distinguished); Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662 (SC) (relied on, para 16).
It was decided by the Supreme Court on 2007-05-23 and is reported as [2007] 291 ITR 500 (SC); [2007] 210 CTR 30 (SC); [2007] 161 Taxman 316 (SC); AIR 2007 SC 2163; (2008) 14 SCC 208; Civil Appeal No. 2830 of 2007. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 143(1), section 143(1)(a), section 143(3), section 147, section 148, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The appeal was allowed, without any order as to costs (para 20). An intimation under s.143(1)(a) cannot be treated as an order of assessment: since 1 April 1989 the requirement of passing an assessment order where the return is accepted has been dispensed with and an intimation is sent instead, and under the first proviso to the substituted s.143(1) the mere acknowledgement of the return counts as the intimation - an acknowledgement given not by any Assessing Officer but mostly by ministerial staff, who make no assessment at all (para 13). It follows that there being no assessment under s.143(1)(a), the question of a change of opinion does not arise (para 13). So long as the ingredients of s.147 are fulfilled the Assessing Officer is free to initiate proceedings under it, and a failure to take steps under s.143(3) does not render him powerless to reassess even where an intimation under s.143(1) has issued (para 18). The High Court had wrongly applied Adani Exports, which had no application on the facts given the conceptual difference between s.143(1) and s.143(3) (para 19). The Court declined to examine other points said to be available to the assessee, none having been urged before the High Court (para 20). It arises in Assessment & Scrutiny and Reassessment & Reopening matters, on section 143(1), section 143(1)(a), section 143(3), section 147, section 148 of the Income Tax Act 1961, and was decided by Dr. Arijit Pasayat and D.K. Jain, JJ. (judgment delivered by Dr. Arijit Pasayat, J.). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Look instead at limitation, at whether reasons were recorded properly, and at sanction.
Still good law. Still cited for the narrow proposition that a s.143(1) intimation is not an assessment — the Supreme Court applied it in DCIT v Zuari Estate Development & Investment Co Ltd, and the Bombay High Court expressly worked with it in PCIT v Shodiman Investments Pvt Ltd (16 April 2018). Shodiman limits it: the words 'whatever reason' go to the type of material only, and the AO must still show a live link and independent application of mind, not borrowed satisfaction. Note that the doctrinal setting has moved on — from 1 April 2021 the trigger under s.147/148A is 'information which suggests' escapement rather than 'reason to believe', and from 1 April 2026 the provisions are ss.279-281 of the Income-tax Act 2025, so the 143(1)-versus-143(3) distinction no longer drives the analysis it once did. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This one favours the revenue and is included deliberately. A library holding only taxpayer-friendly cases would lead to arguments that collapse the moment the department answers. Adani Exports was distinguished, not followed, and the CASE REVIEW records the reversal of the Gujarat High Court judgment in Rajesh Jhaveri Stock Brokers (P.) Ltd. v. ACIT [2006] 284 ITR 593. Two things the summary version of this case tends to lose. The reopening here began with a revenue audit objection, and the Court was not asked to decide whether that alone can supply the officer's satisfaction - that question was worked out later, in the High Court decisions this entry's validity note names. And para 17 preserves the pre-1989 position where the case falls within the proviso to s.147: there both conditions must still be satisfied, and it was only because this case fell under the main provision that the first sufficed. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed, without any order as to costs (para 20). An intimation under s.143(1)(a) cannot be treated as an order of assessment: since 1 April 1989 the requirement of passing an assessment order where the return is accepted has been dispensed with and an intimation is sent instead, and under the first proviso to the substituted s.143(1) the mere acknowledgement of the return counts as the intimation - an acknowledgement given not by any Assessing Officer but mostly by ministerial staff, who make no assessment at all (para 13). It follows that there being no assessment under s.143(1)(a), the question of a change of opinion does not arise (para 13). So long as the ingredients of s.147 are fulfilled the Assessing Officer is free to initiate proceedings under it, and a failure to take steps under s.143(3) does not render him powerless to reassess even where an intimation under s.143(1) has issued (para 18). The High Court had wrongly applied Adani Exports, which had no application on the facts given the conceptual difference between s.143(1) and s.143(3) (para 19). The Court declined to examine other points said to be available to the assessee, none having been urged before the High Court (para 20).
TaxSphere, “ACIT v Rajesh Jhaveri Stock Brokers P Ltd”, https://taxnotice.vittsphere.com/caselaw/case/acit-v-rajesh-jhaveri-stock-brokers/ (validity last checked 2026-08-25)
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My return was only processed under section 143(1) and now the officer wants to reopen it. Can I say he is changing his opinion?
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