Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 1995-96 - Whether where during original assessment, completed under section 143(3), several queries were raised by Assessing Officer with respect to investment of petitioner in purchasing shares of a company, reopening of assessment beyond period of four years on ground that interest would not be deductible under section 57(iii) on funds borrowed for purchasing such shares, was unjustified as there was no failure on assessee's part to disclose all material facts - Held, yes [In favour of assessee] CASES REFERRED TO Ketan B. Mehta [Special Civil Application Nos. 4549 & 4551 of 2002] (Para 5) JUDGMENT Akil Kureshi, J - Petitioner has prayed for quashing and setting aside the notice dated 11.3.2002 as at Annexure A to the petition. By virtue of such notice, the Assessing Officer, sought to reopen the assessment of the petitioner for the assessment year 1995-96. Notice for reopening was thus beyond four years from the end of relevant assessment year. The assessee challenges such notice on various grounds, including that in absence of any failure on his part to disclose fully and truly all material facts for such assessment, reopening beyond the period of four years from the end of relevant assessment is not permissible. The assessee also contends that the reasons recorded by the Assessing Officer are not sufficient to permit reopening. It is the contention of the petitioner that the reasons recorded do not form sufficient basis to enable the Assessing Officer to hold a belief that income chargeable to tax has escaped assessment. Thus, the petitioner seeks to challenge the reopening of assessment on twin grounds of the reopening being beyond the period of four years without any failure on his part to truly and fully disclose all material facts and that there was no basis for the Assessing Officer to form an opinion that income chargeable to tax has escaped assessment. 2. The reasons recorded by the Assessing Officer have been produced along with the affidavit in reply dated 28th June, 2002, filed by one Shri Hemant Leuva, Assistant…

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