Court rules against Income-tax Officer's jurisdiction in reopening 1965-66 assessment. Reassessment deemed mere change of opinion.

The court held that the Income-tax Officer lacked jurisdiction to reopen the assessment for the year 1965-66 based on new information. The reassessment was deemed a mere change of opinion and lacked a valid link to income escapement. Consequently, the reassessment was deemed not maintainable in law, and all issues were decided in favor of the assessee, with no costs awarded.

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Issues involved:
The judgment involves issues related to the jurisdiction of the Income-tax Officer to reopen the assessment for the assessment year 1965-66 based on the receipt of new information after the original assessment was completed.

Issue 1: Jurisdiction to Reopen Assessment
The Income-tax Officer reopened the assessment based on information received regarding concealed income in the form of a loan, alleging deliberate concealment by the assessee. The Commissioner of Income-tax (Appeals) canceled the reassessment, stating there was no live nexus leading to the belief of income escaping assessment. The Tribunal upheld this decision, emphasizing that the initiation was a mere change of opinion and lacked jurisdiction.

Issue 2: Application of Section 147(b)
The Department argued that the provisions of section 147(b) applied due to the confessional statement of the loan creditor, indicating bogus entries. However, the Tribunal held that section 147(b) did not apply, as it was deemed a change of opinion and upheld the Commissioner's orders.

Issue 3: Maintenance of Jurisdiction
The Tribunal further upheld the Commissioner's decision that the Income-tax Officer lacked jurisdiction to reopen the assessment for the year 1965-66. The Tribunal found no live link or close nexus between the materials before the Income-tax Officer and the belief formed under section 147(a) of the Act, leading to the conclusion that the reassessment was not maintainable in law.

The judgment concluded by affirming that there was no valid basis for the Income-tax Officer to reopen the assessment, as the link between the materials and the belief of income escapement was deemed too tenuous. Consequently, all questions in the reference were answered in favor of the assessee, and there was no order as to costs.

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