Reassessment notice invalid where recorded reasons used figures from another year and no proper basis existed for reopening.

A reassessment notice under the Income-tax Act was held invalid because the recorded reasons did not relate to the relevant assessment year and instead contained figures from a different year. The Court found that no proper basis existed to reopen the assessment year in question, and that the notice had been issued mechanically at the fag end of limitation without a valid formation of opinion. On that basis, the reassessment proceedings were quashed in favour of the assessee.

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Issues: Whether the notice issued for reopening the assessment under section 148 of the Income-tax Act, 1961 was valid when the recorded reasons contained figures pertaining to a different assessment year and no proper basis was shown for reopening the assessment year in question.

Analysis: The validity of reassessment depends on the existence of recorded reasons for reopening the assessment for the relevant assessment year. The recorded reasons supplied in support of the notice were found to contain figures relating to another assessment year, and the same mistake was admitted in the counter. On that basis, the Court found that there was no proper reason available for reopening the assessment for the assessment year in question and that the notice had been issued mechanically at the fag end of limitation without formation of opinion.

Conclusion: The reopening notice was invalid and the impugned proceedings were quashed, in favour of the assessee.

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