ORDER 1. Petitioner has challenged notice for reopening dated 25.3.2014 as at Annexure-H to the petition in the following factual backgrounds:- 2. The petitioner as an individual, for the assessment year 2008-09 filed his return of income on 3.3.2009 showing total income of Rs. 4,43,830/-. During the period relevant to the assessment year, the petitioner had sold a residential property and claimed exemption under section 54 of the Income Tax Act (the Act for short). Amount which remained unutilized was deposited by the petitioner with the State Bank of India as under:- (a) SBI Capital Gains Savings Bank Account Rs. 2,00,000/- (b) SBI Capital Gains Deposit Scheme Rs. 37,00,000/- 3. Assessing officer undertook scrutiny of the return. During the course of assessment, various queries were raised by the assessing officer and replied by the petitioner. Eventually, the assessing officer passed an order of assessment dated 20.8.2010 making no additions to the total income of the assessee. In the body of the assessment order, he noted that the assessee had derived income from salary, from house property, profit from the firm as also capital gain. It is this scrutiny assessment the respondent desired to reopen for which impugned notice within the period of 4 years from the end of relevant assessment year came to be issued. The petitioner was supplied the reasons record by the assessing officer for issuing such notice which reasons read as under:- “In this case, you have filed its return of income on 03.03.2009 declaring total income of Rs. 4,43,830/-. Further, assessment order u/s.143(3) of the Act was finalized in the case on 20.08.2010 determining total income at Rs. 4,43,810/-. Verification of case record of your revealed and your income from and capital gain and was allowed exemption of capital gain income under section 54E of the Act. For Rs. 37,00,000/- invested in State Bank of India term deposit for 40 days upto 366 days i.e. for less than three years. As per provision quoted above you are not entitled to get exemption for investment less than three years.” 4. The petitioner raised detailed objections under communication dated 18.9.2013. In such communication he pointed out that his claim for exemption from payment of capital gain was under section 54 of the Act and not 54E. The assessing officer, therefore, in the reasons recorded has made wrong reference to the said section. 5. The petitioner raised detailed objections under communication dated 18.9.2013. In such communication he pointed out that his claim for exemption from payment of capital gain was under section 54 of the Act and not 54E. The assessing officer, therefore, in the reasons recorded has made wrong reference to the said section. 5. The objections of the petitioner were disposed of by the assessing officer on 16.12.2013. In such order he did not deal with the petitioner’s pointed contention that his claim for exemption from payment of capital gain fell under section 54 and not 54E of the Act. 6. On the basis of documents on record and the submissions made before us following aspects emerge: (1) Assessment previously framed after scrutiny is sought to be reopened within a period of four years from the end of relevant assessment year. There is nothing conclusive on record to suggest that the question of assessee’s claim for exemption from capital gain under section 54 was examined by the assessing officer. (2) Undisputedly, however, the claim of the assessee was under section 54 and not 54E of the Act. (3) The assessing officer in the reasons recorded desired to disallow the claim on the ground that as required under section 54E of the Act, the assessee did not invest the surplus for a minimum period of 36 months. (4) Though through the affidavit-in-reply it is now pointed out that reference to section 54E is mere typographical error and the intention was to refer to section 54 of the Act, we are of the opinion that such stand is wholly incorrect. Had this been a case of mere typographical error, we would have ignored the mistake and referred to the correct statutory provision. The fact that reference under section 54E was however, not an error is manifest from the reasons recorded. It referred to the requirement of investing the surplus fund for a minimum period of 36 months. Such requirement flows from section 54E of the Act and not section 54. Section 54 in fact requires the assessee to acquire a new unit within a year or build himself within three years. In the later case he has to invest the surplus in specified investments. Such requirement flows from section 54E of the Act and not section 54. Section 54 in fact requires the assessee to acquire a new unit within a year or build himself within three years. In the later case he has to invest the surplus in specified investments. This was thus not a mere typographical error but a conscious decision on the part of the assessing officer to disallow the exemption claimed, for breach of the requirement of section 54E of the Act. 7. What thus emerges from the above discussion is that the reasons on which the notice for reopening is issued lacks validity. Section 54E of the Act was neither applicable nor sought to be applied by the assessee. The question of denying any such claim under the said provision for breach of condition therein therefore simply did not arise. It is well settled that notice for reopening has to be sustained and supported only on the basis of reasons recorded by the assessing officer and not with the help of extraneous ground, material or possible improvement. Reference in this respect can be made to the decision of this Court in the case of Aayojan Developers vs. Income Tax Officer, (2011) 335 ITR 234 (Guj). 8. Under the circumstances, notice dated 25.3.2014 is quashed. Petition is allowed. Rule is made absolute.