Case Law Details
Delhi High Court held In the case of Principal CIT vs. G & G Pharma India Ltd. that this is basic requirement of law u/s 147 that before reopening of assessment, AO must have apply his mind to the available materials and have reasons to believe that income of the assessee has escaped assessment. After reopening of assessment, analysis of material will be only a post mortem exercise which will not make any basis for validity of reopening of assessment.
Facts of the Case
The Assessee filed its return on 14th November 2004 at Rs.1,190/- which was processed under Section 143(3) of the Act on 1st March 2004. Thereafter, on the basis of information received from the Directorate of Investigation, the AO issued notice under Section 148 of the Act to the Assessee on 19th March 2010 i.e., more than six years after the assessment. The AO made various additions and completed the assessment at Rs.55,50,1801. The Appeal of the Assessee was dismissed by the CIT (A).The Assessee’s further appeal was allowed by the ITAT on the ground that AO has no reason to believe that the income has escaped assessment.
Contention of the Assessee
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