INCOME TAX ACT, 1961

Section 148

Reassessment - Notice under section 148 - Receipt of information from investigation wing as to assesse having received accommodation entries -

AO received information from investigation wing as to M/S 'P' with which assessee had transactions worth Rs. 3 crores for capital infusion, was engaged in providing accommodation entries. Accordingly, AO issued notice under section 148 so as to reopen assessment. Assessee challenged this by way of writ petition. Assessee's case was that issue of receipt of share capital had been examined during original assessment and reassessment notice was issued out of mere change of opinion. Held: Subsequent acquisition of knowledge that monetary transaction undertaken by assessee was with a bogus entity/person such as an accommodation entry provider - which knowledge was not available to AO at the time of completion of scrutiny assessment, was material change of circumstances, and formation of belief that taxable income has escaped assessment would not suffer from the taint of simplicitor change of opinion. Accordingly, reassessment notice could not be set aside in writ proceedings as assesse would have opportunity to raise objection during reassessment proceedings.

REFERRED :

FAVOUR : against the assesse

A.Y. :

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