B. Radha & Ors. v. Dy. CIT

INCOME TAX ACT, 1961

--Reassessment--Full and true disclosureNotice under section 148 issued after expiry of 4 years----Reopening of assessment made after expiry of four years from the end of relevant assessment year, based on suspicion of income having escaped assessment with no reason to believe recorded, was not justified.--Assessee was sister-in-law of Mr. B, Chairman of SCS Ltd. In light of the confessional statement made by Mr. B, assessments of the family members were reopened for the said assessment year. Accordingly, reassessment notice was issued and additions were made. Assessee challenged the reopening of assessment after expiry of four years from the end of relevant assessment year and the action of AO in making additions. Held: Reopening of assessment in the impugned assessment year was bad in law as it was a change of opinion based on suspicion of income having escaped assessment with no reason to believe recorded. Further, additions made were not correct as they were made only on surmises and conjectures with no corelation.

Income Tax Act, 1961, Section 147

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