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Issues: Whether the notice issued for reopening assessment under Section 148 of the Income-tax Act, 1961 was valid when the recorded reasons did not disclose the material basis for the Assessing Officer's belief.
Analysis: The notice itself did not state any reasons, but the Court examined the file to see whether reasons had been recorded there. It held that the requirement is not satisfied by merely reproducing the language of the statute. The recorded reasons must show prima facie material, disclose the factual basis for the belief that income had escaped assessment, and demonstrate application of mind by the Assessing Officer. A bare assertion that the assessee had not fully and truly disclosed material facts, without any supporting material or factual linkage, was held insufficient.
Conclusion: The notice under Section 148 was invalid and was quashed for want of adequate recorded reasons and want of jurisdiction.
Final Conclusion: The writ petition succeeded to the extent that the reopening notice and proceedings founded on it were set aside, while leaving it open to the Assessing Officer to issue a fresh notice in accordance with law if justified.
Ratio Decidendi: Reopening of assessment under Section 148 requires recorded reasons that disclose the factual basis for the belief that income has escaped assessment; a mere repetition of statutory language is insufficient and does not confer jurisdiction.
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