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2019 (1) TMI 1698 - HC - Income TaxValidity of Reopening of assessment u/s 147 - tribunal held that the notice issued u/s 148 was not valid on ground that AO has not demonstrated the failure of the assessee in disclosing the material fact - HELD THAT - Perusal of the reasons recorded by the AO would show that the Tribunal was perfectly correct in coming to the conclusion that the notice of reopening of assessment was invalid. From the reasons we gather that there was no element of lack of true and full disclosure on the part of the assessee, which resulted into any income chargeable to tax escaping assessment. The reasons clearly reveal that the AO was proceeding on the material which was already on record. In the absence of the statutory requirement of income chargeable to tax have been escaped assessment due to the failure on the part of the assessee to disclose truly and fully all material facts been satisfied, the Tribunal correctly held that the notice of reopening of assessment was invalid. - Decided against revenue.
Issues:
Validity of notice issued under section 148 for reopening assessment beyond the prescribed period. Analysis: The High Court was presented with an appeal by the Revenue challenging the judgment of the Income Tax Appellate Tribunal regarding the validity of a notice issued under section 148 for reopening assessment. The main question raised was whether the Tribunal was correct in holding that the notice was not valid due to the Assessing Officer's failure to demonstrate the assessee's failure in disclosing material facts. The Tribunal had previously ruled that the notice of reopening, issued beyond four years from the end of the relevant assessment year, was invalid. Upon reviewing the reasons recorded by the Assessing Officer for issuing the notice, the High Court found that the Tribunal's conclusion was justified. The reasons cited by the Assessing Officer did not indicate any lack of true and full disclosure on the part of the assessee, leading to income chargeable to tax escaping assessment. The High Court observed that the Assessing Officer based the notice on information already present in the records. Since there was no evidence of the assessee's failure to disclose material facts resulting in escaped assessment, the Tribunal's decision to deem the notice invalid was upheld by the High Court. Consequently, the High Court dismissed the tax appeal, affirming the Tribunal's ruling on the matter. In summary, the High Court's judgment focused on the validity of a notice issued under section 148 for reopening assessment beyond the prescribed period. The court analyzed the reasons provided by the Assessing Officer and agreed with the Tribunal's decision that the notice was invalid due to the absence of any failure on the part of the assessee to disclose material facts leading to escaped assessment. This case underscores the importance of adhering to statutory requirements when initiating reassessment proceedings and ensuring that there is sufficient evidence of non-disclosure by the taxpayer before reopening assessments.
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