INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Non-application of mind by AO -

AO received information from Investigation Wing as to assessee having received accommodation entries. Accordingly, AO reopened assessment and made addition. Assessee challenged this. Held: Whatever material was relied upon by AO for recording reasons for reopening of assessment were admittedly not supplied to assessee. No statement recorded during search in the case of alleged entry operators was confronted to assessee and no person was produced for cross-examination on behalf of assessee. Further, AO did not verify the report of investigation wing and accepted same as it was that assessee has received accommodation entries of Rs. 15 lakhs, despite it was a wrong and incorrect fact which would show that AO did not apply his mind to the information and material supplied by the investigation wing. Further, objections of assessee were not disposed of prior to passing of the re-assessment order. Thus, reopening of assessment was set aside as invalid.

Relied:GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 0734 (SC), Haryana Acrylic Manufacturing Company v. CIT & Anr. (2009) 308 ITR 38 (Del.) : 2009 TaxPub(DT) 1007 (Del-HC), Fomento Resorts & Hotels Ltd. v. Asstt. CIT [Tax Appeal No. 63 of 2007, dated 30-8-2019] : 2019 TaxPub(DT) 6719 (Bom-HC)

REFERRED :

FAVOUR : in assessee's favour

A.Y. : 2011-12

SUBSCRIBE FOR FULL CONTENT