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Issues:
1. Challenge to notice issued by Income-tax Officer for assessment year 1988-89. 2. Jurisdictional validity of notice issued beyond four years from the end of relevant assessment year. 3. Allegation of income escapement and failure to disclose material facts. 4. Application of capital gains tax on land transaction without executed sale deed. 5. Previous legal proceedings and withdrawal of notice. Analysis: 1. The petition challenges a notice issued by the Income-tax Officer for the assessment year 1988-89, alleging that the income of the assessee has escaped assessment due to failure to disclose all material facts. The petitioner contends that the notice is based on a mere change of opinion, as the Assessing Officer had previously concluded that the petitioner was not liable for capital gains on a land transaction due to the absence of a sale deed. 2. The notice was issued beyond four years from the relevant assessment year, raising questions about the jurisdictional validity. The court emphasized that for initiating proceedings beyond the four-year period, the Assessing Officer must have reason to believe that income escapement is due to the assessee's failure to disclose material facts. In this case, the court found that the condition precedent for assuming jurisdiction beyond the four-year period was not met, rendering the notice lacking in jurisdiction and warranting quashing. 3. The court analyzed the facts, noting that the assessee had disclosed receiving Rs. 42 lakhs under an agreement to sell the land, with possession handed over in 1983 without an executed sale deed. The assessing authority had acknowledged these facts and accepted the assessee's contention that the transaction did not attract capital gains tax, as per a decision of the Gujarat High Court. As there was no failure to disclose material facts, the court concluded that the notice was issued based on a mere change of opinion. 4. The case involved the application of capital gains tax on a land transaction without a registered sale deed. The court highlighted that a sale of immovable property requires a registered sale deed for a transfer to occur, triggering liability for capital gains tax only upon completion of a sale transaction. The court also noted that the amended definition of transfer under the Income-tax Act was not retrospective, further supporting the assessee's position. 5. Previous legal proceedings included a notice issued by the Assistant Commissioner of Income-tax, which was withdrawn following a court directive. Subsequent transfers of the case records occurred within the Income-tax department. The court ultimately quashed the impugned notice dated December 21, 1994, as it lacked jurisdiction and was deemed a mere change of opinion, ruling in favor of the petitioner without costs.
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