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2014 (2) TMI 949

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....India) Ltd., the assessee/petitioner, for the assessment year 1990-91. 2. For the assessment year 1990-91, the assessee filed a return of income on 31.12.1990, disclosing NIL income under Section 115J of the Act. This return was accompanied with the statement of accounts and the Auditor's Report as required by Section 44AB of the Act. The Revenue, after scrutinizing the return and issuing notice under Section 143(2), passed an assessment order under Section 143(3) of the Act dated 23.03.1993. That order assessed the income at Rs. 44,77,640/-. The assessee appealed against this order to the Commissioner of Income Tax (Appeals), who by an order dated 20.07.1994 (in Appeal No. 43/93-4) partly allowed the appeal. The assessee further appealed ....

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....s to be served had expired, and thus, the impugned notice under Section 148 was time-barred. The re-assessment proceedings, however, were not discontinued, leading to the present writ petition. 4. The writ petitioners urge that the impugned notice under Section 148 is bad in law for a host of reasons. First, it is submitted that the impugned action under Section 147 could not be taken after 4 years from the end of the assessment in respect of which action has been taken. Secondly, it is submitted that there are no reasons to believe that income has escaped assessment. Thirdly, it is argued that a notice under Section 143(2) cannot be served on an assessee after 12 months from the end of the month in which the return is furnished pursuant t....

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....ax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief......................." 6. Thus, while the Court will not judge the adequacy of the reasons provided by the Assessing Officer, the Court must assess whether the belief is based on relevant and specific information that could lead to such a belief. This well-accepted principle has found acceptance in ITO, Calcutta and Ors. v. Lakhmani Mewal Das 1976 (103) ITR 437 (SC); Central Provinces Manganese Ore. Co. Ltd. v. Income Tax Officer, Nagpur, [1991] 191 ITR 662 (SC), Sri Krishna Pvt. Ltd. Etc. v. Income Tax Officer, Calcutta and Ors., (1996) 9 SCC 534. Equally, as held in CIT v. Kelvinator of India Ltd., 2010 (320)....

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.... The reasons recorded by the Assessing Officer state:    "It has been informed by the ... vide letter dated ... that after the death of Sh. Ramesh D. Aggarwal on 30.9.91 the found fictitious companies submitted to the Bank four copies of the fictitious resolution passed by each of them in which names of bogus and non-existent persons were mentioned as new directors of the company and in terms of these resolutions"    (emphasis supplied) The bank account was operated to funnel income which would otherwise be undetected. Furthermore, and crucially, this Court notices that the assessee was asked - through a questionnaire - queries and details about the same "fictitious entities" in respect of which amounts were reflected....