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2017 (7) TMI 576 - HC - Income TaxReopening of assessment - reasons to believe - validity of second notice under Section 148(1) - Held that:- For reasons which are not clear, the Revenue did not pursue the notice dated 23rd March, 2015 issued to the Petitioner under Section 148 of the Act. An attempt was made by Mr Rahul Chaudhary to suggest that since the AO who issued the said notice was replaced by another AO, the said notice was not pursued. He, however, insisted that under Section 129 of the Act it was possible to continue proceedings which commenced with the notice dated 23rd March, 2015 and that was in fact what was done on 18th January, 2016 when the second notice was issued by the incumbent AO. A careful perusal of the notice dated 18th January, 2016 reveals that it does not state anywhere that it is in continuation of the earlier notice dated 23rd March, 2015. There is no noting even on the file made by the AO that while issuing the said notice he was proposing to continue the proceedings that already commenced with the notice dated 23rd March, 2015. Annexure- A to the notice under Section 142(1) of the Act reveals what weighed with the AO when he issued the said notice dated 18th January, 2016. In this document with the sub-heading “proceedings u/s 148/147 for AY 2008-2009, show cause notice - reg.”. It is plain to understand that according to the AO, the notice dated 18th January 2016 under Section 148 of the Act was issued ‘initiating’ afresh the proceedings. It was not merely in continuation of the earlier proceedings that commenced with the notice dated 23rd March, 2015. The entire proceedings under Section 148 of the Act stood vitiated since even according to the AO, he initiated proceedings on 18th January, 2016 on which date such initiation was clearly time barred. Secondly, the fresh initiation did not have the approval of the Additional CIT, as required by law. The Court has not been provided with any satisfactory explanation as to why the notice dated 23rd March, 2015 issued by the AO under Section 148 of the Act was not carried to its logical end. The mere fact that the AO who issued that notice was replaced by another AO can hardly be the justification for not proceeding in the matter. On the other hand, the AO did not seek to proceed under Section 129 of the Act but to proceed de novo under Section 148 of the Act. This was a serious error which cannot be accepted to be a mere irregularity. It is not clear why the AO did not wait for the process of supplying reasons to the Petitioner, considering the Petitioner’s objections thereto and passing a reasoned order thereon to be completed before issuing the notice under Section 142(1) and 143(2) of the Act. There appears to be non-application of mind by the AO to the legal requirement. - Decided in favour of assessee.
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