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2014 (8) TMI 7 - ALLAHABAD HIGH COURTNotice for reopening of assessment u/s 148 - Reasons to believe that the income chargeable to tax has escaped assessment – Held that:- The AO have reasons to believe that there had been some omission or failure to disclose fully or truly all material facts necessary for the assessment must be based on some material facts which according to the AO is based on some reasonable belief and which would have a material bearing on the question of under assessment - relying upon Calcutta Discount Co. Ltd. Vs. Income Tax Officer and another [1960 (11) TMI 8 - SUPREME Court] - the reasons recorded by the AO nowhere states that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year - the entire material had been placed by the petitioner before the AO at the time when the original assessment was made and that the AO had applied its mind to that material and accepted the contention canvassed by the assessee. Merely because the tax audit report opined that there was excess expenditure shown and that the excess payment should be treated as a deemed gift u/s 4(1)(c) of the Gift Tax Act on the basis of the same material is in our opinion a clear case of change of opinion - the AO has dealt with the audit report and justified his assessment order indicating in its order dated 4th July, 2000 that the issue pertaining to deemed gift and the purchase consideration was examined in detailed looking the business necessity for the petitioner company to acquire the copyright and held that the quantum of purchase consideration as disclosed by the petitioner was reasonable and was a true business transaction and that no gift appeared to be involved. Once the AO had made an assessment on the primary facts and documents placed before it, the AO could not at another point of time form another opinion on the same primary facts and arrive at a conclusion that he had committed an error or come to a conclusion that he has now reasons to believe that income had escaped assessment and reopen the assessment proceedings - on the basis of an audit report, notice u/s 148 of the Act could not be issued as such audit report cannot be regarded as "information" within the meaning of 147(b) of the Act for the purpose of reopening an assessment – the notice issued u/s 148 is to be set aside – Decided in favour of Assessee.
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