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Issues involved: Appeal under cl. 10 of the Letters Patent u/s 148 read with s. 147 of the I.T. Act, 1961; Conditions precedent for issue of notice u/s 148; Application of Supreme Court decisions in reassessment cases.
Judgment Summary: The High Court of Delhi heard an appeal under cl. 10 of the Letters Patent u/s 148 read with s. 147 of the I.T. Act, 1961. The court upheld the judgment of the learned single judge who quashed a notice issued by the ITO and restrained further proceedings against the respondent. The court found that conditions precedent for the notice u/s 148 had not been fulfilled, as per cl. (a) of s. 147. The facts of the case were compared to Supreme Court decisions in Chhugamal Rajpal v. S. P. Chaliha and ITO v. Lakhmani Mewal Das, where assessments were reopened unjustifiably for cash credits previously accepted as genuine. The appellants contended that the Supreme Court decisions were wrongly applied, but the court disagreed. It was noted that the present case mirrored the situations in the Supreme Court cases, where no new material connected to the cash credits was presented to justify reassessment. Reference was made to Calcutta and Madras High Court decisions, which were found distinguishable based on facts and disclosure of material information during original assessments. The court concluded that the reassessment in the present case lacked a live connection between the information available to the ITO and the genuineness of the loans recorded. The court dismissed the appeal, agreeing with the learned judge's decision. The respondent was awarded costs amounting to counsel's fee Rs. 300.
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