9911796707
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Issues:
1. Initiation of proceedings under Section 148 of the Income Tax Act for Assessment Year 1985-1986 based on alleged suppression of stock. 2. Interpretation of Section 147(b) of the Income Tax Act in relation to the case. 3. Error in quashing the show-cause notice by the High Court. Analysis: Issue 1: The assessment for Assessment Year 1985-1986 was completed, but subsequent allegations of suppressed stock led to a notice under Section 148 of the Income Tax Act. The High Court quashed the notice, stating the assessee had disclosed all material particulars. However, the Supreme Court found discrepancies in the stock records and upheld the assessing officer's reasons to believe there was suppressed stock, reviving the proceedings. Issue 2: The Supreme Court highlighted Section 147(b) of the Income Tax Act, which allows reassessment if the assessing officer has reason to believe income has escaped assessment. The Court emphasized the application of this provision in cases where there is information indicating potential tax evasion, supporting the initiation of proceedings under Section 148. Issue 3: The High Court's decision to quash the show-cause notice was deemed erroneous by the Supreme Court. The Court noted that the statement made by the Chief Executive, indicating discrepancies in stock records, was crucial and had not been considered by the lower courts. The Supreme Court reinstated the show-cause notice, emphasizing the need to address the alleged suppressed stock in the ongoing proceedings. In conclusion, the Supreme Court allowed the appeal, setting aside the High Court's order and reviving the proceedings under Section 148 for Assessment Year 1985-1986. The Court clarified that the correctness of the Chief Executive's statement would be examined during the proceedings. No costs were awarded in this matter.
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