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2015 (11) TMI 931 - ALLAHABAD HIGH COURT

2015 (11) TMI 931 - ALLAHABAD HIGH COURT - TMI - Reopening of assessment - undisclosed share transaction - Held that:- A perusal of the first proviso indicates that the reasons to believe also indicate that there was failure on the part of the assessee to make a return under Section 139 of the Act or in response to a notice under sub-section (1) of Section 142 or Section 148 of the Act has failed to disclose fully and truly all material facts necessary for his assessment. The foundational requir .....

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facts. There is nothing to indicate failure on the part of the petitioner disclosing fully and truly all material facts. In the absence of this foundational requirement, the initiation of proceedings was patently erroneous and cannot be sustained. The notice is, accordingly, quashed - Decided against revenue - Civil Misc. Writ Petition (Tax) No. 356 of 2003 - Dated:- 5-11-2015 - Hon'ble Tarun Agarwala And Hon'ble Vinod Kumar Misra, JJ. ORDER ( Per: Tarun Agarwala, J. ) We have heard Sri .....

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ven by the Supreme Court but, in the instant case, we are of the opinion that relegating the petitioner to an alternate remedy at this belated stage would amount to travesty of justice. We find that the writ petition was filed in the year 2003 and the same was admitted on 28th July, 2008. Once the petition has been admitted and affidavits have been exchanged, we are of the opinion that the matter should be decided on merits rather than relegating the matter again to the authority on the ground o .....

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proceedings is extrated hereunder:- "The facts of this year are similar to the Asst. year 1996-97 wherein addition of above ₹ 12 lakhs has been made on account of dealing in shares. The basis of addition has been discussed in detail in the body of assessment order. In this year also loss of ₹ 14 lakhs has been claimed which is to be disallowed. Also the expenses in the head office a/c. are to be examined since huge additions have been made in A.Y. 1996-97. In view of these fact .....

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uthority held that the reasons recorded by the Assessing Officer were not honest reasons and since no valid reasons had been recorded, the assessment made in pursuance thereto was invalid and, accordingly, the assessment order was quashed. The Commissioner of Income Tax (Appeals) however, observed that the purchase and sales of shares made by the petitioner appears to be dubious transactions and, therefore, directed the Assessing Officer to take action under Section 148 of the Act against the pe .....

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ber, 2012 dismissed Income Tax Appeal No.365 of 2009 and affirmed the order of the first appellate authority. While all these proceedings were going on, the Assessing Officer recorded fresh reasons under Section 148 of the Act and, after taking necessary permission from the competent authority, again issued a notice under Section 148 of the Act. Fresh reasons so recorded are extracted hereunder:- "Return declaring an income of ₹ 7,73,880/- was filed on 31.10.1995. The Assessee firm is .....

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he extent of ₹ 14,74,000/- has escaped assessment. It is worthwhile here to mention that the assessment u/s 1473(3) after issue of notice u/s 148 was completed on 24.3.2000. But the same was quashed by the Ld. Commissioner of Income-tax (Appeals)-II, Kanpur vide his order dated 16.6.2000 directing the Assessing Officer to take action u/s 148 against the assessee afresh by recording fresh reasons." Based on these reasons, notices were issued against which the present writ petition has .....

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48 and 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 and 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) o .....

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