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2018 (2) TMI 674 - HC - Income TaxReopening of assessment - Validity of reasons to believe - Held that - Requirement of reason to believe would apply even in a case where the reopening of assessment is being resorted to where previously no scrutiny assessment was framed. In the context of such requirement of reason to believe, on number of occasions, this Court has held and declared that reopening of the assessment cannot be held for a fishing or a roving inquiry or for verification of the records. If one reverts back to the reasons recorded by the Assessing Officer for reopening the assessment, all that he has stated that the records suggest that the assessee has entered into sale transaction of the property of ₹ 40,00,000/and the sale transaction entered into by the assessee is required to be verified. In the result, impugned notice dated 27.03.2017 is set aside. Petition is allowed
Issues:
Challenge to notice of reopening by Assessing Officer for assessment year 2010-11 based on short term capital gain on sale of land without scrutiny assessment. Analysis: The petitioner challenged a notice of reopening issued by the Assessing Officer for the assessment year 2010-11, which was initially accepted without scrutiny. The Assessing Officer's reasons for reopening the assessment were based on the petitioner's sale transaction of immovable properties amounting to ?40,00,000 as per AIR information. The petitioner objected to the notice, but the objections were rejected, leading to the petition before the High Court. The High Court noted that in cases where no scrutiny assessment was previously conducted, the concept of change of opinion would not be relevant for reopening the assessment. However, the Assessing Officer must have a valid reason to believe that income chargeable to tax has escaped assessment, even in such cases. The Court emphasized that reopening cannot be done for a fishing or roving inquiry, as highlighted in previous judgments. The Assessing Officer's reasons for reopening, which focused on verifying the sale transaction, were deemed insufficient to justify the reopening. Therefore, the High Court set aside the impugned notice dated 27.03.2017, ruling in favor of the petitioner and disposing of the petition accordingly.
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