| The Tax Publishers2020 TaxPub(DT) 4928 (Chd-Trib) : (2020) 084 ITR (Trib) 0174 INCOME TAX ACT, 1961
Section 147
Where AO initiated reassessment proceedings against assessee merely relying on information passed on to him by Investigation Department regarding accommodation entry taken by assessee, without even applying his mind to it and verifying the same, as satisfaction regarding escapement of income, as recorded in the reasons, was not that of AO but was borrowed satisfaction, jurisdiction assumed to reopen case under section 147 was bad in law.
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Reassessment - Validity - AO initiated reassessment proceedings against assessee merely relying on information passed on to him by Investigation Department regarding accommodation entry taken by assessee -
Assessee company was sub-broker of company (L). Pursuant to information received from investigation wing, that assessee was beneficiary of accommodation entries. AO made addition under section 68 by reopening assessment of assessee. Held: AO merely relied on information passed on to him by Investigation department regarding accommodation entry taken by assessee, without even applying his mind to it and verifying the same. There was nothing in the reasons revealing application of mind by AO to information in his possession, as to whether he verified that any such amount was actually received during year and if so in what mode or manner i.e., as share capital or unsecured loan, etc. Since satisfaction regarding escapement of income, as recorded in the reasons, was not that of AO but was borrowed satisfaction, jurisdiction therefore assumed to reopen the case under section 147 was bad in law.
REFERRED : Pr. CIT v. Meenakshi Overseas Pvt. Ltd. (2017) 395 ITR 677 (Del) : 2017 TaxPub(DT) 1791 (Del-HC), Pr. CIT- v. G & G Pharma India Ltd. (2016) 384 ITR 147 (Del) : 2015 TaxPub(DT) 4054 (Del-HC), M/s Indo Global Techno Trade Ltd. v. ITO [ITA No. 1616/Chd/2018 for the assessment year 2010-11 vide order dt. 15-6-2020] : 2020 TaxPub(DT) 2508 (Chd-Trib), M/s Rajshikha Enterprises Pvt. Ltd. v. Income Tax Officer [ITA No. 6113/Del/2014 for the assessment year 2005-06 vide order dt. 23-2-2018]
FAVOUR : In assessee's favour.
A.Y. : 2009-10
IN THE ITAT, CHANDIGARH BENCH
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