Appeal Dismissed, Assessee's Relief Upheld, Reassessment Invalid.

The High Court dismissed the appeal, affirming the decision of the learned Single Judge in granting relief to the assessee. The Court held that the re-assessment notice under Section 147/148 for the assessment years 2005-06, 2006-07, and 2007-08 was not valid as the Revenue's challenge to the ITAT order did not justify reopening assessments. Additionally, the Court upheld the assessee's contentions regarding disallowance under Section 36(1)(iii) and non-deduction under Section 194H, emphasizing the need for tangible material for valid reassessment under Section 143(3).

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Issues:
1. Validity of re-assessment notice under Section 147/148 of the Income Tax Act, 1961 for A.Y. 2005-06, 2006-07, and 2007-08.
2. Disallowance under Section 36(1)(iii) and non-deduction under Section 194H by the assessee.
3. Applicability of extraordinary remedy of writ petition.
4. Requirement of tangible material for valid reopening of assessment under Section 143(3).

Analysis:
1. The High Court addressed the issue of the validity of the re-assessment notice issued under Section 147/148 of the Income Tax Act, 1961 for the assessment years 2005-06, 2006-07, and 2007-08. The notice was challenged by the assessee, contending that the matter regarding interest allowance was debatable as it had been appealed to the ITAT, which granted relief. The Court held that the mere preference of the Revenue to challenge the ITAT order did not justify the re-opening of assessments for the concerned years.

2. The Court further examined the issue of disallowance under Section 36(1)(iii) and non-deduction under Section 194H by the assessee. The assessee successfully argued that the income tax amounts were paid in accordance with the provisions at the time of filing the final return, well within the stipulated time. The Court considered the provisions of Section 194H and upheld the assessee's contentions in this regard.

3. The Court discussed the applicability of extraordinary remedies like a writ petition in tax matters. The Revenue relied on various judgments to support its position that the assessee should not have availed of the writ petition as a remedy. However, the Court did not find merit in this argument and upheld the decision of the learned Single Judge in granting relief to the assessee.

4. Finally, the Court analyzed the requirement of tangible material for a valid reopening of assessments under Section 143(3). It emphasized that the Assessing Officer's job is to consider claims in accordance with the law and not solely based on what the assessee states. The Court referred to the Supreme Court's decision in Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd., emphasizing the need for tangible material outside the existing record for a valid reopening of assessments. The Court concluded that in the absence of tangible material, the revenue could not have been afforded an opportunity for reassessment, leading to the dismissal of the appeal.

In conclusion, the High Court dismissed the appeal, affirming the decision of the learned Single Judge in granting relief to the assessee on both aspects, highlighting the absence of suppression or mis-declaration by the assessee and the necessity of tangible material for valid reassessment.

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