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Challenge to notice proposing reassessment of income under section 148 of the Income-tax Act, 1961. Analysis: The petitioner filed a return for the assessment year 1997-98, showing an income of Rs. 66,720 and claimed a refund of Rs. 12,145. The Assessing Officer finalized the assessment under section 143(1)(a) and granted the refund. Subsequently, the officer issued a notice under section 148 proposing reassessment based on the purchase of a plot for a shop, alleging suppression of income. The petitioner challenged the notice on grounds related to stamp duty payment, the value of the plot, and alleged suppression of construction costs. The respondent argued that the petitioner purchased the plot at a higher price to evade taxes. The court reviewed sections 147 and 148 of the Act and referred to relevant case laws to establish the legal framework for reassessment proceedings. The Supreme Court precedent in Phool Chand and Bajrang Lal v. ITO clarified that reassessment can be initiated if the assessing officer has specific, reliable, and relevant information indicating income escapement due to non-disclosure of material facts. The court emphasized that reassessment is not a mere change of opinion but based on fresh information justifying a belief of income escapement. The court in Raymond Woollen Mills Ltd. v. ITO further held that the sufficiency or correctness of material for reassessment cannot be challenged at the initial stage. The High Court, considering the facts of the case, found the reasons recorded by the respondent for initiating reassessment to be valid. The respondent's concern regarding the difference in plot price and stamp duty payment was deemed sufficient to form a prima facie opinion of income escapement. The court rejected the petitioner's argument that the plot being vacant negates the need for reassessment, emphasizing the validity of the main reason provided by the respondent. Consequently, the court dismissed the writ petition, allowing the petitioner to pursue remedies under the Act if adversely affected by future orders. In conclusion, the court upheld the validity of the notice issued under section 148 for reassessment, based on the discrepancy in plot price and stamp duty payment, rejecting the petitioner's challenges and affirming the legality of the respondent's actions in initiating reassessment proceedings.
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