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2018 (8) TMI 1066 - HC - Income TaxReopening of an assessment - reason to belief - The reassessment notice is based on reasons, which the revenue asserts, was recorded on 28 May, 2007. The question is whether the assessee is correct in asserting-as he does in this case, that these reasons were inserted later and did not exist, or were not reflected when the notice was issued. - The losses claimed were in respect of two transactions; sale of shares of M/s Parsec Technology and on account of sale of mutual fund units. - AO observed that transaction was not genuine and was a device to avoid tax, to claim loss that was not warranted. Held that:- These circumstances, in the opinion of the court, show that the reasons had been recorded only after 22.08.2007 and not before. The inescapable inference from the records made available is that but the “reasons to believe” had not been recorded on28.05.2007 i.e. prior to the issue of notice under Section 148 of the Act but were recorded later. Therefore, this court is of the opinion that the official record lends credence- rather proves the petitioner’s allegations that no reasons were recorded prior to the issue of the notice on 28.05.2007. The AO should have recorded some reasons to justify such reassessment notice, before it was issued, given that it is a mandatory requirement under section 148(2) of the Act. In these circumstances, this court hereby directs the Chief Commissioner concerned to cause an inquiry to be conducted as to the involvement of the officials or employee in the manipulation of the record in this case, and take strict disciplinary action, according to the concerned rules and regulations. This inquiry should be in regard to the conduct of the concerned AO posted at the time, who issued the notice under Section 147/148 as well as the officers who filed the affidavits in these proceedings. The investigation and consequential action shall be completed within four months. The impugned reassessment notice and all subsequent orders, made pursuant thereto are hereby quashed. - Decided in favor of assessee.
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