Law:

Section:

Section 148 of the Income-tax Act, 1961 - Reassessment - Notice for - Whether where in notice issued under section 148 neither reasons for reopening of assessment were mentioned nor as to whether reassessment proceedings were proposed to be taken under section 147(a) or 147(b), ITO was justified in reopening assessment - Held, no - Whether tact that minor son of petitioner had advanced an amount to petitioner which was invested in a private company but interest therefrom was not disclosed, was sufficient reason for ITO to exercise power under section 148 - Held, no Facts Notices under section 148 were issued to the petitioner for the relevant assessment years, merely reciting that the ITO had reason to believe that income chargeable to tax had escaped assessment within the meaning of section 147 and that the ITO proposed to reassess the income of the petitioner. On receipt of these notices, the petitioner wrote to the ITO seeking the reasons for the issue of the notices and also as to whether the reassessment proceedings were proposed to be taken under section 147(a) or 147(b). A reply was sent by the ITO stating that it was not possible to give reasons for the issue of the notices at that stage. On writ, the revenue contended that notices were issued to the petitioner on the ground that the minor son of the petitioner had advanced a certain sum to the petitioner and that amount was invested in a private company but the interest secured therefrom was not disclosed. Held The attitude adopted by the ITO and his failure to not to disclose any reasons for reopening the assessment led to the irresistible conclusion that his action was entirely erroneous. It was unfortunate that the ITO should have declined to disclose the reasons which prompted him to adopt the proceedings under section 148. Even if the notices were issued to the petitioner on the ground that the minor son of the petitioner had advanced an amount to the petitioner and that amount was invested in a private company but the interest secured from the deposit was not disclosed, still it had to be concluded that this was a wholly unsustainable reason to exercise power under section 148. It was for the ITO…

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