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Issues involved: Reopening of assessment u/s 148, Addition u/s 2(22)(a) of the Act, Validity of reassessment proceedings.
Reopening of assessment u/s 148: The appellant objected to the reopening of the assessment, contending that it was bad in law. The appellant raised additional grounds challenging the validity of the reassessment proceedings. The CIT(A) noted that the appellant did not file clarification on the additional ground raised, which was based on legal issues. The CIT(A) observed discrepancies in the reasons recorded by the Assessing Officer for reopening the assessment. The CIT(A) analyzed the issues considered for reopening and concluded that the AO did not exceed the scope of section 147 of the Act. The additional ground raised by the appellant was dismissed by the CIT(A). Addition u/s 2(22)(a) of the Act: The Assessing Officer made an addition of &8377; 44,04,467/- u/s 2(22)(a) of the Act, pertaining to deemed dividend on a gift received from a company. The appellant challenged this addition before the CIT(A), arguing that the issue of deemed dividend was not part of the original assessment u/s 143(3). The CIT(A) reviewed the reasons recorded for reopening and found that the issue of deemed dividend was considered along with other issues. The CIT(A) held that the reassessment order was valid in this regard. Validity of reassessment proceedings: The appellant contended that the reassessment proceedings should be quashed as there was no failure to disclose material facts. The appellant cited various case laws to support this argument. The Tribunal noted that the reasons recorded for reopening were not furnished to the assessee in a timely manner, as required by law. Citing legal precedents, the Tribunal held that the reassessment order passed without supplying the reasons for reopening was invalid. Consequently, the Tribunal set aside the assessment as invalid and allowed the appeal of the assessee.
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