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Validity of reassessment proceedings under section 148 of the Income-tax Act, 1961. Analysis: The case involved the reassessment proceedings initiated by the Income-tax Officer based on information that the creditors were involved in hawala business and were merely name-lenders. The Appellate Assistant Commissioner initially held that all necessary particulars were furnished during the original assessment, questioning the validity of the reassessment. However, the Tribunal disagreed, stating that the Income-tax Officer was justified in initiating reassessment as the assessee had not fully disclosed all material facts. The Tribunal emphasized that the information provided by the assessee was not true, leading to the initiation of reassessment proceedings. The Tribunal's decision was supported by previous judgments, including the Supreme Court's ruling in ITO v. Lakhmani Mewal Das and the High Court's decision in Jai Singh v. CIT. These cases established that the assessing authority must have a valid reason to believe that the assessee failed to disclose all material facts for assessment. The Tribunal distinguished another case, Kirpa Ram Ramji Dass v. ITO, where the alleged name-lender denied advancing the loan, which was not the situation in the present case. As a result, the Tribunal ruled in favor of the Revenue, stating that the reassessment proceedings were valid based on the non-disclosure of material facts by the assessee. Ultimately, the High Court answered the referred question in the negative, favoring the assessee and ruling against the Revenue. The judgment highlighted the importance of disclosing all material facts during assessment to avoid reassessment proceedings and emphasized the assessing authority's right to initiate reassessment if there is a lack of full and true disclosure by the assessee.
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