Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 2005-06 - Assessees were husband and wife and were doctors working in EHIRCL, Delhi - They were issued notices under section 147/148 on grounds that they had wrongly valued perquisite on account of rent-free accommodation provided by their employers; and that annual letting value of their house property in Delhi had not been declared for assessment purposes - Facts revealed that in relevant assessment year assessees were posted at Raipur by their employer and, in fact, after August 2001, even when assessees were in Delhi, they were occupying their own flat and not rent free accommodation provided by their employer - Further, when owing to their employment, assessees were stationed at another place and could not occupy their house in Delhi, annual letting value of said property had to be taken at nil in terms of section 23(2)(b) - Whether, on facts, reasons recorded by Assessing Officer for reopening assessment were ex facie without any foundation and, therefore, notices issued under section 147 were liable to be quashed - Held, yes FACTS The assessees were husband and wife and were doctors working in EHIRCL. Their returns of income for the assessment year 2005-06 were duly processed under section 143(1). Thereafter, they were issued notices under section 147/148 on the grounds that they had wrongly valued perquisite on account of rent-free accommodation provided by their employers; and that the annual letting value of their house property in Delhi should have been declared for assessment purposes as they had made a claim of interest expenditure on the housing loan taken for the property. The assessees filed writ petition challenging the said notices. They contended that the reasons, which had been given for reopening of the assessment, did not show that any new material had come to light for reopening of the assessment. As regards issue of incorrect valuation of the perquisite of the rent-free accommodation provided by the employer, the assessees contended that they were not occupying rent-free accommodation given by their employer and, in…

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