Income-tax reassessment notice u/s147 questioned for vague 'reason to believe' and missing transaction details; notice quashed The dominant issue was the validity of reassessment initiation under s.147 on the 'reason to believe' standard. The HC held that the AO had territorial ...
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Income-tax reassessment notice u/s147 questioned for vague "reason to believe" and missing transaction details; notice quashed
The dominant issue was the validity of reassessment initiation under s.147 on the "reason to believe" standard. The HC held that the AO had territorial jurisdiction to issue the notice despite the assessee's name change, since it did not alter territorial jurisdiction and AOs within the same territory could act; consequently, the jurisdictional challenge failed. However, the HC found the reopening unsustainable because the recorded reasons lacked essential particulars (nature and date of transaction) and failed to show a live nexus between the information relied upon and the assessee's audited books, so the AO could not form even a prima facie belief of income escaping assessment; accordingly, the notice was quashed. The SC refused to interfere and dismissed the SLP.
Delay was condoned. The Court held: "We are not inclined to interfere with the impugned judgment and order of the High Court; hence, the special leave petition is dismissed." As a result, the High Court's impugned judgment and order remained undisturbed, and the special leave jurisdiction was not exercised. It was further directed that "Pending interlocutory application(s), if any, shall stand disposed of."
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