INCOME TAX ACT, 1961

Section 147

Reassessment - Reason to believe - Borrowed satisfaction of investigation wing -

AO issued section 148 notice on the basis of information received from DIT (I & CI), Jaipur wherein it was stated that assessee had sold property P.No. C-27, 1st Floor, Lal Kothi Yojana, Jaiur for sale consideration of Rs. 9 lakhs which was registered by Sub-Registrar, Jaipur at Rs. 16 lakhs for stamp duty purpose. On this basis, AO concluded that income to the extent of Rs. 16 lakhs had escaped assessment. Held: Sub-Registrar for stamp duty purpose has valued the property at Rs. 15,98,915 as mentioned in sale deed. Thus, it was evident that only basis for reopening of assessment was information received from DIT(I & CI), Jaipur. From the date of receipt of information by AO to the date of issue of notice under section 148, AO had not made any further enquiry. The primary condition for initiating action under section 147 was that AO must have reason to believe that any income chargeable to tax has escaped assessment. This satisfaction must be of AO himself and not a borrowed satisfaction. Reason to belief cannot be at the instance of audit party or investigation conducted by others or third party statement, etc. Accordingly, assessment reopened mechanically without application of mind and jurisdiction, was not valid.

Relied:Pioneer Town Planners (P) ltd. v. Dy. CIT (2018) 170 DTR 237 (Del)(Trib) : 2018 TaxPub(DT) 5311 (Del-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

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