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2014 (2) TMI 1073 - HC - Income TaxValidity of Reassessment proceedings u/s 148 of the Act – Held that:- This is a serious lapse, and it is apparent that the proceeding sheets in the revenue custody and charge have been removed – when proceedings/hearings were held, then order/proceeding sheet should be available - reassessment proceedings have been initiated after four years from the end of the relevant assessment year and as per the first proviso to Section 147 of the Act - it has to be shown that there was failure on the part of the assessee to disclose fully and truly all facts necessary for the assessment - In the “reasons to believe” it is mentioned that absence of “crucial information” relating to income and expenditure on account of activities of the petitioner in India had resulted in improper computation of income for the assessment year 2003-04. As per the reasons to believe itself, in case the petitioner had furnished statement showing income and expenditure from Indian activities in the course of the original assessment proceedings, there was no lapse or failure on the part of the assessee i.e. the petitioner - Once it is held that the details were furnished, the reassessment notice would fail - Letter/reply dated 22nd March, 2006 enclosing the details would go to the very root and falsify the averments made in the reasons to believe - The said reasons would be factually incorrect and reassessment notice bad and contrary to the first proviso to Section 147 of the Act - The reassessment notice is hit by the principle of “change of opinion”. Reasons to believe must have nexus and live link with the formation of opinion by the Assessing Officer that taxable income had escaped assessment - As per mandate of Section 149(1)(b), income escaping assessment should be or likely to exceed Rupees one lac. - This required prima facie computation of income escaping assessment - This in turn required examination of data or figures relating to “Indian operations” - This being the position and stand of the Revenue, the Assessing Officer could not have formed any prima facie or tentative opinion that income had escaped assessment as the petitioner had positive income from “Indian operations”, if we take into account “actual expenditure” incurred relating to Indian operations. In the absence of the details, the averment made in the reasons to believe will be only a guess work or surmise and not cogent or reliable material to form a prima facie view - the Assessing Officers may be handicapped in such cases but there are sufficient provisions in the Act to get hold of the said data before proceedings are initiated or reasons are recorded - There is nothing to indicate and show the data and figures of the year in question were ascertained or gathered from records for other assessment years or otherwise - Thus, the petition is allowed and the reassessment proceedings set aside initiated by issue of notice under Section 148 relating to assessment year 2003-04 – Decided in favour of Assessee.
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