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2022 (5) TMI 628 - HC - Income TaxReopening of assessment u/s 147 - Eligibility of reasons to believe - Assessee was engaged in sale of immovable property with a capital gain was occurred, as per insight verification details - HELD THAT:- It is wholly undisputed that “reasons to believe” recorded by the Assessing Authority for assuming jurisdiction under Section 148 of the Act, 1961 by issuing impugned notice, was totally unfounded and non existent. The Assessing Authority formed the “reasons to believe” on the ground that petitioner – Assessee has sold an immovable property and gained the capital gain during the F.Y. 2012-13 relevant to A.Y. 2013-14 but has not shown the same in his return of income, which was totally unfounded and not bonafide. In the case of Radha Krishna Industries vs. State of H.P. [2021 (4) TMI 837 - SUPREME COURT] Hon’ble Supreme Court reiterated the law laid down in its earlier judgments in the case of Kelvinator of India Limited. [2010 (1) TMI 11 - SUPREME COURT] and TechSpan India (P.) Ltd. [2018 (4) TMI 1376 - SUPREME COURT] and held that the power to reopen an assessment must be conditioned on the existence of “tangible material” and that “reasons must have a live link with the formation of the belief”. Since the impugned notice under Section 148 of the Act, 1961 is a jurisdictional notice and the “reasons to believe” recorded by the Assessing Authority was totally unfounded and not bonafide, therefore, the notice itself was without jurisdiction and the Assessing Authority could not have assumed jurisdiction to issue notice under Section 148 of the Act, 1961. Therefore, the impugned notice under Section 148 of the Act, 1961 issued by the Assessing Authority can not be sustained and deserves to be quashed. Consequently, the impugned reassessment order can also not stand and, therefore, it also deserves to be quashed. WP Allowed.
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