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2024 (5) TMI 106 - BOMBAY HIGH COURTValidity of reopening of assessment - Validity of grant the approval by the PCIT - relevancy of information reported by Insight portal - reason to believe - AO proceeds on the basis that on a search conducted under Section 132 on one Prathamesh Constructions,as subcontracting its jobs to various subcontractors and Petitioner was one of such sub-contractors - as submitted AO is a mere post office, who finds materials and then forwards it to the Faceless Assessing Officer (“FAO”) and the FAO will go into the details to decide whether there is any escapement of income - HELD THAT:- Admittedly, in the notice issued under Section 148A (b) of the Act, certain allegations have been made to which reply has been filed and the AO has accepted that the information is accounted for by the assessee. AO, wanted to verify the genuineness of the contract work done by Petitioner or whether any accommodation entry was provided to Prathamesh Constructions. It is necessary to note that, first of all, in re-assessment proceedings, the law is clear. An Assessing Officer cannot indulge in a fishing enquiry. In this case, the AO has accepted the contention of the assessee and held that the information report by the Insight portal is accounted for by the assessee in his books and income arising out of those transactions is duly offered for taxation. Therefore, the impugned order dated 21st April 2023 under Section 148A (d) of the Act cannot be sustained. At the same time if the AO wishes to, he could issue a fresh notice under Section 148A (b) of the Act if, that is permitted in law. We are expressing no opinion. In the circumstances, the AO having accepted the explanation of Petitioner, he could not have gone ahead and recommended that it was a fit case where income chargeable to tax has escaped assessment. We would add that the approval granted by the PCIT is also without application of mind. In the approval, it is stated “I have perused the facts of the case vis-a-vis information/material available on record and found the case to be fit case for issue of notice u/s 148 of the I.T. Act, 1961. Accordingly, the draft order u/s 148A (d) of the I.T. Act submitted by the AO is approved.” If only the PCIT had read the impugned order and the notice issued under Section 148A (b) of the Act, he would have refused to grant the approval. The PCIT seems to have done nothing and it is clear that he has mechanically signed the approval. Decided in favour of assessee.
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