2009 (9) TMI 27 - HC - Income Tax

Validity and legality of notice issued u/s 148 – held that - The essential requirement for initiating reassessment proceeding u/s 147, read with sec. 148 is that the assessing authority must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year. - The High Court in the exercise of its jurisdiction under article 226 of the Constitution can interfere in a writ petition against a notice u/s 148 of the Act when it is of the opinion that there is no material in possession of the assessing authority on which reasonably an opinion can be formed that the income has escaped assessment - the amount of ₹ 8, 34,720 was not credited in the profit and loss account even though it was mentioned in the balance sheet, however, it cannot be said that mere production of the account books before the Assessing Officer would amount to discloser within the meaning of explanation 1 to Section 147, since the same could have been discovered by the Assessing Officer only with due diligence – notice issued u/s 148 held to be valid and legal.