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of <h1>High Court invalidates assessment notice for 2012-2013 due to lack of disclosure, upholding petitioner's compliance.</h1> <h3>Himmatbhai Dhanjibhai Dholakiya Versus Joint Commissioner Of Income Tax (OSD)</h3> Himmatbhai Dhanjibhai Dholakiya Versus Joint Commissioner Of Income Tax (OSD) - TMI Issues:1. Validity of notice to reopen assessment for the assessment year 2012-2013.2. Allegations of failure to disclose true particulars of income.3. Disallowance of deduction under section 80IB(10) and section 14A of the Income Tax Act.Analysis:Issue 1: Validity of notice to reopen assessmentThe petitioner challenged the notice issued by the Assessing Officer to reopen the assessment for the assessment year 2012-2013. The notice was based on discrepancies found in the Profit & Loss Account, Balance Sheet, and computation of income. The Assessing Officer cited violations related to the deduction under section 80IB(10) and exempt income under section 10(2A) of the Act as reasons for reopening the assessment. The petitioner contended that the notice was invalid as it was issued beyond the four-year period from the end of the relevant assessment year. The High Court noted that the reasons recorded by the Assessing Officer did not point out any failure on the part of the assessee to disclose material facts. The notice was set aside as there was no failure on the part of the assessee to make full and true disclosures.Issue 2: Allegations of failure to disclose true particulars of incomeThe Assessing Officer alleged that the petitioner had breached conditions related to the deduction under section 80IB(10) by allotting more than one residential unit to a single purchaser. Additionally, the Assessing Officer raised concerns regarding the disallowance of interest expenditure under section 14A of the Act for earning exempt income. The High Court observed that the reasons recorded by the Assessing Officer were based on facts gathered from the assessment proceedings, including the return and accompanying documents. However, the court found that the petitioner had not failed to disclose necessary facts, and therefore, the notice for reassessment beyond the four-year period was deemed invalid.Issue 3: Disallowance of deduction under section 80IB(10) and section 14AThe petitioner contested the allegations of breaching conditions for claiming deduction under section 80IB(10) and not disallowing interest expenditure under section 14A of the Act. The petitioner clarified that there was no double allotment of units to a single purchaser and no interest expenditure was claimed in the return. The Assessing Officer dismissed these objections, stating that verification could only be done during the assessment. The High Court, however, emphasized that the petitioner had not failed to disclose all material facts, leading to the setting aside of the impugned notice.In conclusion, the High Court allowed the petition, setting aside the notice to reopen the assessment for the assessment year 2012-2013, as there was no failure on the part of the assessee to disclose true particulars of income, rendering the notice invalid.
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