Assessee, a shareholder in company RRPR,Holding Pvt Ltd, filed her return which was accepted, and an assessment order was passed. Subsequently, assessment was reopened on the ground that she had purchased shares of a company NDTV at a substantially lower consideration than its market value from company RRPR. During reassessment, the Assessing Officer called upon assessee to explain as to why the loan received from company RRPR should not be treated as income (deemed dividend) within the meaning of section 2(22)(e) . However, no addition was made as deemed dividend as proposed in relation to the loan received from company RRPR by treating the same as income defined under section 2(22)(e). After three years, another reopening notice was issued on the ground that a complaint was received that RRPR had raised an interest-bearing loan from a bank and out of this loan amount, it immediately granted interest-free loans to its directors, which included assessee. Assessing Officer opined that the same was liable to be included in assessee’s income by virtue of section 2(24)(iv). On writ, the Court held that the specific issue in relation to the loan received by the assessee had been raised during first reassessment proceedings and an explanation was sought from the assessee. It was also noted that audited books of account, balance sheet as well as the assessee’s account in RRPR were produced by the assessee during earlier proceedings. Furthermore, the balance sheet of the company showed that the auditor had clearly made a note that during the relevant year, the company had given an interest-free loan to the assessee, being a director of the company. Court held that it could not be said that the assessee had failed to disclose true and material facts before the Assessing Officer, and issuance of notice was clearly contrary to section 149 and without jurisdiction. Court held that subjecting the assessee to reassessment proceedings a second time for the same transaction and practically for the same issue was arbitrary and without jurisdiction, and the reopening notice and consequential orders were quashed.  (AY . 2009-10)