Court quashes assessment reopening, ruling for petitioner. Reasons lacked validity, impermissible to reopen.

The Court quashed the notices and orders related to the reopening of the assessment for the year 2017-2018, ruling in favor of the petitioner. The Court held that the reasons for reopening the assessment lacked validity as they ignored the petitioner's earlier explanations during the regular assessment. It was deemed impermissible to reopen the assessment when all relevant facts were disclosed during the original assessment. The Court allowed the petition, making the rule absolute and disposing of the Civil Application without costs.

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Issues Involved:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and subsequent orders for reopening assessment for the assessment year 2017-2018.

Analysis:
1. The petitioner filed a petition under Article 226 of the Constitution of India, seeking various writs to quash and set aside impugned notices and orders related to the reopening of the assessment for the year 2017-2018.

2. The challenge was against notices dated 30.03.2021 and 20.05.2021, along with an order dated 12.08.2021, issued by the respondent authority under Sections 148 and 143(2) read with Section 147 of the Income Tax Act, 1961, rejecting objections raised by the petitioner.

3. The petitioner argued that the reopening of the assessment was a change of opinion as the issue regarding cash deposits during demonetization was previously examined during the regular assessment under Section 143(3) of the Act.

4. The respondent authority contended that there was tangible material to believe that income had escaped assessment, as the petitioner failed to explain the nature and source of bank deposits post-demonetization.

5. The Court examined the facts, noting that the petitioner had provided detailed explanations and documents during the assessment proceedings, including responses to summons and notices regarding cash deposits.

6. It was observed that the Assessing Officer accepted the explanations provided by the petitioner during the regular assessment under Section 143(3) of the Act, which included clarifications on cash collections and deposits during demonetization.

7. Referring to precedents, the Court held that the reasons recorded by the Assessing Officer for reopening the assessment lacked validity, as they ignored the petitioner's earlier explanations during the regular assessment.

8. Relying on the principle that reopening an assessment due to the failure of the assessee to fully disclose material facts is impermissible when all relevant facts were disclosed during the original assessment, the Court allowed the petition.

9. Consequently, the Court quashed the notices and orders related to the reopening of the assessment for the year 2017-2018, ruling in favor of the petitioner.

10. The Court made the rule absolute, disposing of the Civil Application without costs in light of the judgment.

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