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Issues involved: Assumption of jurisdiction under section 147 of the Act, validity of reopening of assessment, requirement of providing reasons for reopening, and addition made by the assessing officer.
Assumption of jurisdiction under section 147: The assessing officer reopened the assessment based on specific information obtained during search and survey proceedings, including gifts received and deposits made by the assessee. The ld. CIT (Appeals) upheld the jurisdiction under section 147, stating that there was prima facie material for reassessment. The assessee contended that the assessing officer did not provide reasons for reopening within a reasonable time, as per the GKN Driveshafts case. The Tribunal found that the assessee requested reasons after the assessment was passed, contrary to the proper procedure. Therefore, the matter was set aside for the assessing officer to provide reasons and for the assessee to raise objections, as per legal requirements. Validity of reopening of assessment: The ld. CIT (Appeals) rejected the assessee's argument that the assessment was reopened for roving and fishing enquiries, stating that specific information led to the reassessment. The Tribunal emphasized the importance of providing reasons for reopening within a reasonable time, as per legal precedents. The failure to provide reasons before passing the assessment order led to the decision to set aside the matter for proper procedure to be followed. Requirement of providing reasons for reopening: The Tribunal highlighted the necessity for the assessing officer to furnish reasons for reopening the assessment within a reasonable time, as per legal guidelines. The assessee's ex-post facto request for reasons after the assessment order was passed was deemed improper. Following the GKN Driveshafts case, the Tribunal directed the assessing officer to provide reasons promptly and allow the assessee to raise objections, ensuring a fair process. Addition made by the assessing officer: As the issue of jurisdiction under section 147 was set aside, the addition made by the assessing officer and confirmed by the ld. CIT (Appeals) was also set aside. The Tribunal directed that the addition be decided afresh after providing the assessee with a reasonable opportunity to present their case. Ultimately, the appeal filed by the assessee was allowed for statistical purposes, with the matter remanded for further proceedings.
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