For the AY 1998-99, the assessee filed a second revised return declaring a loss as a result of demerger of its bottling division. The AO issued notices under sections 143(2) and 142(1) along with a questionnaire. The assessee furnished the reasons for filing the revised returns of income and provided clarifications in response to the various queries raised and the balance sheet and the profit and loss account. Thereafter, the AO passed an order under section 143(3) computing the total income of the assessee at Nil after making certain disallowances and after setting off earlier years’ losses. Aggrieved, the assessee filed an appeal before the Commissioner (Appeals).

The Commissioner by an order under section 263 directed the AO to pass a fresh assessment order after considering the issues identified in his order. Thereafter, an order under section 143(3) read with section 263 was passed.

After the expiry of four years the AO issued a notice under section 148 to reopen the assessment under section 147. On a writ petition:

Held, allowing the petition, that the reasons recorded for reopening of the assessment did not state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the AY 1998-99. The notice issued under section 148 after a period of four years for reopening the assessment under section 147 and the consequential order passed were quashed and set aside. (AY. 1998-99)

For the AY 1998-99, the assessee filed a second revised return declaring a loss as a result of demerger of its bottling division. The AO issued notices under sections 143(2) and 142(1) along with a questionnaire. The assessee furnished the reasons for filing the revised returns of income and provided clarifications in response to the various queries raised and the balance sheet and the profit and loss account. Thereafter, the AO passed an order under section 143(3) computing the total income of the assessee at Nil after making certain disallowances and after setting off earlier years’ losses. Aggrieved, the assessee filed an appeal before the Commissioner (Appeals).

The Commissioner by an order under section 263 directed the AO to pass a fresh assessment order after considering the issues identified in his order. Thereafter, an order under section 143(3) read with section 263 was passed.

After the expiry of four years the AO issued a notice under section 148 to reopen the assessment under section 147. On a writ petition:

Held, allowing the petition, that the reasons recorded for reopening of the assessment did not state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the AY 1998-99. The notice issued under section 148 after a period of four years for reopening the assessment under section 147 and the consequential order passed were quashed and set aside. (AY. 1998-99)