INCOME TAX ACT, 1961

Section 148

Reassessment - Validity of reasons to believe - Correct facts not recorded in the reason -

Assessee was issued notice for reopening of assessment under section 148 after the regular assessment was completed under section 143(3). AO alleged that assessee and his brothers and their family members have floated numerous front companies for the purpose of routing the funds and to acquire vast tracts of land. Held: Where the return of income has been accepted by processing under section 143(1) reopening of an assessment can only be done when AO had reason to believe that income chargeable to tax had escaped assessment. The mere fact that the return was processed under section 143(1) did not give AO a carte blanche to issue a reopening notice. AO had fundamentally proceeded on wrong facts to come to the reasonable belief that income chargeable to tax has escaped assessment. Thus, notice under section 148 was issued without jurisdiction

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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