INCOME TAX OFFICER, AZAMGARH & ANR. vs MEWALAL DWARKA PRASAD & VICE VERSA

The Supreme Court held that the notice issued under Section 148 of the Income Tax Act was quashed as it was beyond the limitation period of four years for reopening the assessment. The Court emphasized that the High Court should not have examined the validity of the notice regarding the two transactions if it found the notice valid for another item. The Court clarified that the Income Tax Officer had sufficient primary facts during the original assessment and the alleged escapement of income did not result from the assessee's failure to disclose material facts, thus allowing the assessee's appeal and dismissing the Revenue's appeal.