Reopening of Income Tax Assessment Valid Under Sections 147/148 for Undisclosed Share Capital from Paper Companies

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....The HC upheld the reopening of the assessment under Sections 147/148 of the IT Act, rejecting the assessee's contention that once returns are filed and accepted, they cannot be reopened. The Court emphasized that the assessing officer must have a recorded reason to believe, supported by tangible material with a live link, that income has escaped assessment. The facts showed that the assessee raised substantial share capital from paper companies, which was not reflected in the original returns, justifying the reopening. The procedural requirements, including sanction from higher authorities and furnishing reasons to the assessee, were complied with. The Court held that the power to reassess is intended to prevent wilful misstatements and ens.........