INCOME TAX ACT, 1961

Section 147

Reassessment - Reason to believe - Information emanated from Investigation Wing - Assessee alleged non-application of mind on AO's part

AO received information from investigation wing as to assessee having booked expenditure in the name of fictitious entities. Accordingly, AO reopened assessment by issuing notice under section 148. Assessee challenged this on the ground of no independent application of mind on AO's part.Held: Reopening of assessment should be on the basis of fresh tangible material which suggest escapement of income. On perusal of reasons recorded by AO, it was abundantly clear that AO formed reasonable belief of escapement of income on the basis of tangible material which came to his possession subsequent to completion of assessment under section 143(1) and on that basis, he concluded that there was escapement of income within meaning of section 147 and thus merely for the reason that reasons recorded for reopening were based on information received from investigation wing, it could not be said that AO has not applied his mind and not formed opinion on the basis of information. Accordingly, reopening of assessment was valid.

Supported by:Asstt. CIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC) : 2007 TaxPub(DT) 1257 (SC) and Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC) : 1999 TaxPub(DT) 348 (SC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 69C

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