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2021 (5) TMI 122 - HC - Income TaxReopening of assessment u/s 147 - Sham transaction of gift - whether the revenue is justified in reopening the assessment for the year under consideration ? - HELD THAT:- We are of the view that, when specific query with regard to transaction of gift was raised by the AO and the same was answered by the assessee, the AO thought fit not to make any addition, which clearly proves that, he consciously formed the opinion and framed the assessment. We have examined the objections raised by the audit party and subsequent enquiries made by the AO before reopening of the assessment. Except the audit objections, no any new material came in the hands of the assessing officer while initiating the proceedings of reopening of the assessment for the year under consideration. The audit objections do not constitute a tangible material to reopen the assessment. Reliance may be placed on the decision of this Court in the case of Adani Exports [1998 (12) TMI 51 - GUJARAT HIGH COURT] wherein, this Court has held that, reassessment was not valid as the AO held no belief on his own at any point of time that, income of assessee had escaped assessment on account of erroneous computation of benefit u/s 80HHC and was constrained to issue notice only on the basis of audit objections. The same view was taken in the case of Indian & Eastern Newspaper Society Vs. CIT [1979 (8) TMI 1 - SUPREME COURT], that the audit objections cannot be basis for reopening of the assessment. No new material surfaced during the reassessment proceedings on which the AO could have formed a requisite belief with regard to escapement of assessment and the assessee had disclosed all the materials fully and truly during the previous assessment proceedings. Under the circumstances, the impugned Notice under Section 148 of the Act dated 26.02.2019 assuming jurisdiction under Section 147 of the Act after the expiry of four years from the end of the relevant assessment year is clearly without jurisdiction of law and cannot be sustained in law. - Decided in favour of assessee.
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