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2014 (2) TMI 791 - HC - Income TaxReassessment u/s 147/148 of the Act – Whether the income on purchase and sale of shares to be treated as business income OR Short Term Capital Gain – Held that:- The reasons provided u/s 148 must indicate specifically what such objective material facts are, on the basis of which a reopening is initiated under Section 148 - There is a vague reference in this case to ‘material facts’, which does not meet the standard under Section 148 – Relying upon Phool Chand Bajrang Lal and Anr. v. Income Tax Officer and Anr., [1993 (7) TMI 1 - SUPREME Court] - the return was processed under Section 143(1) for the A.Y. 2005-06, which involves a mere intimation, rather than an application of mind or true assessment of the return, a less stringent threshold must be taken in terms of ‘reasons to believe’ that income has escaped assessment or not. The decision in CIT v. Orient Craft [2013 (1) TMI 177 - DELHI HIGH COURT] followed – the expression "reason to believe" cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made under section 143(3) and another applicable where an intimation was earlier issued under section 143(1) - it is open to the assessee to contend that notwithstanding that the argument of "change of opinion" is not available to him, it would still be open to him to contest the reopening on the ground that there was either no reason to believe or that the reason to believe is not relevant for the formation of the belief that income chargeable to tax has escaped assessment - it is open to the assessee to challenge the reasons recorded under section 148(2) on the ground that they do not meet the standards – Decided in favour of Assessee.
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