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Issues involved:
Challenge to notice for reopening of assessment u/s 148 of Income Tax Act, 1961 and preliminary order for reassessment proceedings. Details of the judgment: Issue 1: Reopening of assessment beyond the prescribed period - Petitioner filed return for assessment year 2004-05 with all annexures and deduction u/s 80IB(10) was granted after scrutiny assessment. - Assessing Officer seeks to reopen assessment beyond 4 years without indication of non-disclosure of material facts, making the notice untenable. Issue 2: Reasons for reopening assessment - Reasons furnished by respondent stated that deduction under Section 80IB(10) was wrongly allowed due to the petitioner not undertaking a housing project as claimed. - Petitioner objected, arguing no concealment and reopening based solely on Finance Act amendment. - Assessing Officer rejected objections, citing duty of assessee to disclose all material facts and reliance on Supreme Court decision for reopening jurisdiction. Issue 3: Assessment order passed before court's permission - Court issued notice to respondent, directing not to pass final assessment without permission. - However, Assessing Officer passed assessment order on the same day, disallowing deduction under Section 80IB(10) and issuing demand notice and penalty. Issue 4: Court's decision - Court noted previous assessment details where deduction was allowed after due consideration of petitioner's business activities. - Court referred to previous cases where failure to disclose material facts was crucial for reopening jurisdiction. - Court allowed petition, quashing the notice for reopening and subsequent assessment order, as petitioner had disclosed all necessary facts for assessment. Separate Judgment: - Division Bench in Aayogan Developers case and Sadbhav Engineering Co. Ltd. case held that failure to disclose material facts is essential for reopening assessment. - Court in Pravinkumar Bhogilal Shah case also ruled in favor of assessee, emphasizing the need for full disclosure of material facts. - Court concluded that petitioner, being a works contractor, should be entitled to deduction under Section 80IB(10) and quashed the reopening notice and assessment order. This judgment highlights the importance of full disclosure of material facts by the assessee for assessment purposes and the limitations on the jurisdiction of reopening assessments beyond the prescribed period without evidence of non-disclosure.
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