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High Court quashes Income Tax Act notice & reassessment for 2005-06 & 2006-07. Grounds for reopening invalidated. The High Court allowed both petitions, quashing the notice under Section 148 of the Income Tax Act and the reassessment proceedings for Assessment Years ...
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High Court quashes Income Tax Act notice & reassessment for 2005-06 & 2006-07. Grounds for reopening invalidated.
The High Court allowed both petitions, quashing the notice under Section 148 of the Income Tax Act and the reassessment proceedings for Assessment Years 2005-06 and 2006-07. The court held that as the grounds for reopening assessments were invalidated by the tribunal and upheld by the court, the notice and reassessment were deemed unsustainable. No costs were awarded.
Issues Involved: Challenge to impugned notice under Section 148 of the Income Tax Act for Assessment Years 2005-06 and 2006-07.
Analysis: The petitioner, an urban development authority, filed petitions under Article 226 of the Constitution to challenge the notice issued by the Assessing Officer under Section 148 of the Income Tax Act to reopen assessments for the years 2005-06 and 2006-07. The Assessing Officer alleged that income chargeable to tax had escaped assessment. The petitioner had earlier been registered under Section 12AA of the Income Tax Act and claimed deductions under Section 11 for the years in question. The Assessing Officer later canceled the registration retrospectively based on commercial nature activities, leading to the reopening of assessments. The petitioner objected to the reassessment, citing a tribunal order quashing the cancellation of registration. The High Court confirmed the tribunal's decision, holding that since the grounds for reopening assessments did not exist, the notice under Section 148 and the reassessment proceedings for the years 2005-06 and 2006-07 were quashed and set aside.
Conclusion: The High Court allowed both petitions, quashing the impugned notice under Section 148 of the Income Tax Act and the reassessment proceedings for the years 2005-06 and 2006-07. The court held that since the basis for reopening assessments had been set aside by the tribunal and confirmed by the court, the notice and reassessment could not be sustained. No costs were awarded in the case.
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