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Issues involved:
Challenging legality of reassessment notices u/s 148 of the Income-tax Act, 1961 for the years 1986-87 and 1987-88. Summary: The High Court of Gujarat heard petitions against reassessment notices issued u/s 148 of the Income-tax Act, 1961 for the years 1986-87 and 1987-88. The petitioner contended that the notices were without jurisdiction and should be quashed as full and true disclosure of all material facts had been made. The court found that the reasons for reopening the proceedings were based on an audit objection regarding depreciation on plant and machinery, and not on any failure to disclose material facts. It was noted that the Commissioner of Income-tax had approved the reopening based on the audit objection, indicating a lack of independent application of mind by the respondent. The court held that notices issued solely on the basis of an audit report, without proper satisfaction by the competent authority, were contrary to law. Therefore, the petitions were allowed, the notices were quashed, and no costs were awarded.
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