Delhi HC quashes Sec. 148
proceedings (initiated beyond 4 years period) on assessee–company (engaged
in the real estate business) for AY 2008-09; AO had recorded reasons
that the five companies that subscribed to assessee’s share capital were ‘paper
companies’, however, HC notes that assessee had disclosed the names of all the
five companies along with the details of share premium amount received from
them during original assessment proceedings; Accordingly, HC holds there was
‘no new material’ for initiating re-assessment, remarks that “the reasons for
reopening do not mention as to what fact or information was not disclosed by
the Petitioner…. An allegation that the companies are `paper companies' without
further facts is by itself insufficient to reopen assessments”; However,
considering that a large number of writ petitions are filed on a routine basis
challenging reopening u/s. 147/148, HC lays down a four-point guideline
in matters of reopening of assessments, viz.: 1) while communicating reasons,
copy of the standard form used by AO for obtaining the approval of the Superior
Officer should itself be provided to assessee, 2) reasons ought to spell out
all the reasons and grounds available with the AO for re-opening including
reference to investigation report or enquiry, 3) where the reasons make a
reference to another document, such document and/ or relevant portions of such
report should be enclosed along with reasons and 4) the exercise of considering
assessee’s objections to reopening, not a mechanical ritual, hence AO
should give proper reasons for the conclusion.:HC
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