No reopening in the absense of tangible material even when only intimation u/s 143(1) was issued originaly

0 comments Friday, August 24, 2012

Gujrat High Court in Inductotherm (India) Pvt. Ltd. vs CIT has held that reopening of aseessment u/s 147/148 would be invalid when no new material has come before the AO even when no assessment u/s 143(3) was framed earlier but only an intimation u/s 143(1)(a) was issued.

In this case: For AY 2002-03, the AO issued an Intimation u/s 143(1) accepting the return. Subsequently, based on objections raised by the audit, he issued a s. 148 notice to reopen the assessment. The AO set out four issues in the recorded reasons and for two he stated that the reopening was to “verify” the expenditure. The assessee filed a Writ Petition to challenge the reopening inter alia on the ground that there was no reason to believe that income had escaped assessment. 

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