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Issues:
1. Validity of the cancellation of reassessment under section 147A of the IT Act, 1961 for the assessment year 1970-71. Analysis: The appeal in question revolved around the cancellation of reassessment made under section 147A of the IT Act, 1961 for the assessment year 1970-71. The original assessment on the assessee was completed under section 143(3) of the Act, and subsequently, a search in the assessee's residential premises led to the initiation of action under section 147A by the Income Tax Officer (ITO). The Appellate Assistant Commissioner (AAC) held that the law does not impose an obligation on the assessee to disclose investments made, and non-disclosure does not justify reopening the assessment under section 147A. The AAC also highlighted that the ITO had the information regarding the remodelling of the house and the expenses incurred as early as 1971 but did not make any inquiries until 1973. The AAC further emphasized that even if the facts warranted action under section 147B, the reassessment had become time-barred. The Department appealed against the AAC's order. The Departmental representative argued that under the Explanation to section 147A, mere production of account books or evidence that could have led to material evidence does not constitute disclosure unless it is full and true. The representative referred to a ruling of the Madras High Court to support this contention. Upon careful consideration of the submissions and a review of the case records, the Appellate Tribunal agreed with the AAC's conclusion. The Tribunal found that the reasons for reopening the assessment indicated that the Department was aware of the remodelling and expenses incurred by the assessee as early as 1971. The Tribunal concurred with the AAC that the assessee was not obligated to disclose investments, as there was no such requirement in the return form. The Tribunal upheld the AAC's order, dismissing the Revenue's appeal.
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