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2017 (6) TMI 600 - MADRAS HIGH COURTValidity of reopening of assessment - Whether it is right in law to initiate parallel proceedings u/s.148 when proceedings u/s.142(1) is still pending? - Held that:- In the affidavit dated 22.06.2016 filed on behalf of the revenue, it is stated that a notice u/s.148 of the Income Tax Act was issued on 23.9.2011 for the assessment year 2009-10 and no notice was issued under section 142(1) of the Income Tax Act for the assessment year 2009-10. The Letter dated 29.07.2011 was a covering letter addressed to the assessee. No notice u/s.142(1) was enclosed for the assessment year 2009-10 and it was only for the assessment year 2010-11. Therefore, the contention of the appellant that there are parallel proceedings – one under section 148 and another under section 142(1) of the Income Tax Act is untenable. It is also pertinent to note that no such ground was raised either before the appellate authority or Income Tax Tribunal. Existence of reasons to believe - information received from a third party - Held that:- AO is empowered to re-open the assessment if he has reasons to believe that the income has escaped from the assessment. It is not required by the revenue to show that income which has escaped assessment was due to the failure on the part of the appellant to disclose fully and truly all the materials relevant to the assessment. Both the appellate authority and the Income Tax Tribunal has found that the assessing officer was empowered to re-open the assessment in the instant case. It is an admitted fact that the assessee had failed to file his return of income for the assessment year 2009-10. Pursuant to the survey conducted under section 133A of the Act in the business premises of Smt.Leela Surana, a Share Sub-Broker, on 25.11.2009, it came to light that the assessee had made cash payments of ₹ 6,80,000/- on 17.09.2008 and ₹ 30,000/- on 24.9.2008 to Smt. Leela Surana for purchase of shares and had obtained 'back dated' contract note for the purchase of 4,700 share of 'Shyam Star'. Subsequently, the assessee had sold these shares on 17.9.2008 and 24.9.2008 for ₹ 6,75,838.61 and 27,378.47 and remitted the sale proceeds to his bank account. Therefore, the assessing officer had the reasons to re-open the assessment of the assessee. Hence, in our view, the Tribunal was justified in assessing the correctness of the notice for reopening the assessment under Section 148 on the basis of the reasons which were disclosed by the Assessing Officer. - Decided against assessee.
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