CIT Vs. KANODIA & SONS

JUDGEMENT

(1.) The present appeal has been filed under section 260A of the Income Tax Act, 1961, hereinafter referred to as 'the Act', against the order dated 31.3.2005 passed by the Income Tax Appellate Tribunal, Lucknow Bench Lucknow. The Department has proposed the following substantial questions of law said to be arising out of the Tribunals order.: WHETHER the Income Tax Appellate Tribunal was justified in law in dismissing the appeal filed by the department against the order of the CIT(A) in quashing the assessment for invalid reasons recorded by the Assessing Officer without appreciating the facts of the case?

(2.) WHETHER the Income Tax Appellate Tribunal was justified in law in dismissing the appeal of the department on technical ground without going to the merit of the case?

(3.) SRI Ashok Kumar submitted that the CIT (Appeal), as also the Tribunal was not justified in setting aside the reassessment order and also in quashing the order for issuing notice under section 148 on the ground that no proper reasons were recorded and on the reason recorded the proceedings under section 148 could not have been initiated. He further submitted that in the assessment proceeding for the assessment year 1996 -97 bogus share transactions were detected as the modus operandi was the same as in the previous assessment year also and therefore the proceedings for reassessment were validly initiated.