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The Cuttack bench of the Tribunal in [2023] 102 ITR (Trib) 701 (ITAT[Ctk]) held that as the reasons recorded does not quantify even an estimated amount of the alleged income which has escaped assessment and as it is noticed that the reasons recorded do not contain any live link to the alleged illegal mining, the reasons recorded for the purpose of reopening of assessment are invalid and is nothing but fishing enquiry. Consequently, the reasons recorded are held to be invalid and notice issued under section 148 of the Act for the purpose of reopening stands quashed. Consequently, the assessment also stands quashed.


In this case there was a reference to penalty of Rs. 243.48 crores initiated by the state government for illegal mining which prompted reopening without first estimating the income escaping assessment in this case.


In the nutshell thus with respect to the show cause reasons recorded for reopening the following is pre desirable:


1.            there is quantification of the income alleged to have escaped assessment; &

2.            also there is an estimate of income chargeable to tax for meeting Section 149 conditions.


In the interim judgement rendered by the DHC in W.P.(C) 3405/2023 & CM APPL. 13157-13158/2023 dated 20.03.2023 in MANJEET KAUR DUGGAL in the previous the AO has only quantified the transactions of sale of shares and not estimated the capital gains component chargeable to tax that have escaped assessment for 149 purpose. 


In the right earnest there is a need for the CBDT/AO/AU to provide/annex statement of computation of estimate of income chargeable to tax escaping assessment with every notice issued u/s148A in a prescribed template. 

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