TMI Blog2021 (1) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... es, I am satisfied that this is a fit case for reopening under section 147. Such a satisfaction was not found valid by ITAT, Delhi Benches in the cases of Shree Balkishan Agarwal Glass Industries Ltd., Delhi [ 2020 (9) TMI 1153 - ITAT DELHI] and M/s. Behat Holdings Ltd., Delhi vs., ITO, Ward-4(3), New Delhi [ 2020 (1) TMI 1358 - ITAT DELHI] based on several decisions of the Hon ble High Courts. Thus, the issue is covered against the Revenue by the above decisions of the Tribunal as well. The A.O. has thus no justification to assume jurisdiction under section 147 in a Lawful manner and as such the same are liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. Since we have quashed the reopening of the assessment, therefore, there is nothing to decide the issue of addition on merits. Appeal of the Assessee allowed. - ITA.No.4257/Del./2019 - - - Dated:- 17-12-2020 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee : Shri Raj Kumar, C.A., Shri Sumit Goel, C.A. For the Revenue : Shri Prakash Dub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of proceedings u/s.148 of Income Tax Act, 1961. 1. Name of Assessee M/s. Maheshwari Roller Flour Mills Pvt. Ltd., B-11, W.H.S. Kritinagar, New Delhi-110015 2. Permanent Account Number AAACM1075C 3. Status Company 4. District/Circle/Range Ward-16(1) 5. Assessment year in respect of which it is proposed to issue notice u/s.148. 2009-10 6. The quantum of income which has escaped assessment. ₹ 25,00,000/- 7. Whether the provisions of sec.147(a) or 147(b) are applicable or both the sections are applicable 147(b) 8. Whether the assessment is proposed to be made for first time. If the reply is in the affirmative, please state : YES. (a) Whether any voluntary ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case for the issue of a notice under section 148. For the reasons as recorded by me in Annexure-I [copy attached with Memo], I am satisfied that it is a fit case for issue of notice u/s.148 of the Act. Approval u/s.151 is granted. Sd/- Sanjay Kumar Mishra Pr. Commissioner of Income Tax-06, New Delhi. 4.1. He has submitted that A.O. in para-11 has attached Annexure-A which are reasons for reopening of the assessment which is reproduced at pages 2 to 8 of the assessment order, copy of which is also filed at PB-1 to 13. The same reads as under : 4.2. Learned Counsel for the Assessee referring to the aforesaid Form for reopening of the assessment and reasons, submitted that initiation under section 147 of the I.T. Act have been done by mentioning the wrong Section 147(b) of the I.T. Act which is deleted from the Income Tax Act w.e.f. 01.04.1989, therefore, reopening is done under non-existent Section in a mechanical manner without application of mind. He has also referred to PB 40 to 79 which is the report of the DDIT (Inv.) Dated 12.03.2013 and report of DDIT (Inv.) to CIT, New Delhi which is referred to in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the decision of Hon ble Tribunal in the case of VRC Township Pvt. Ltd., (supra). 5. The Ld. D.R. on the other hand relied upon the Orders of the authorities below and submitted that reassessment have been done on the basis of information received from Investigation Wing. 6. We have considered the rival submissions and perused the material on record. It is well settled Law that validity of re-assessment proceedings is to be determined on the basis of the reasons recorded for reopening of the assessment. The A.O. in the Form for recording the reasons for initiating the re-assessment under section 148 of the I.T. Act, 1961 has mentioned that reopening have been done under section 147(b) of the I.T. Act as is reproduced above. Further, such Section under section 147(b) of the I.T. Act have already been omitted from the Income Tax Act w.e.f. 01.04.1989. Learned Counsel for the Assessee further placed on record report of DIT (Inv.) Dated 12.03.2013 which is referred to in the reasons for reopening of the assessment in which A.O. has clearly suggested that the impugned amount is required to be taxed by initiating the proceedings under sections 147/148 of the I.T. Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. 3. Briefly the facts of the case are that the return declaring income of ₹ 21,000/- was e-filed on 31.10.2007. The return was processed under section 143(1) at retuned income. Proceedings under section 147 of the Income Tax Act, 1961 were initiated after recording reasons that the assessee's income has escaped to the tune of ₹ 80 lakhs. Accordingly notice under section 148 was issued on 29.03.2012. The assessee in reply thereto submitted that the return originally filed may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961. The A.O. noted in the present case that information was received from Investigation Wing that assessee has taken accommodation entries totaling to ₹ 80 lakhs from the companies floated by Shri Tarun Goyal. The A.O. after examining the issue on merit made the addition of ₹ 80 lakhs under section 68 of the I.T. Act, 1961. 3.1. The assessee challenged the reopening of the assessment as well as addition on merit before the Ld. CIT(A), however, the Ld. CIT(A) dismissed the appeal of assessee. 4. In the present appeal the assessee challenged the initiation of re-assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have considered the rival submissions. It is well settled Law that validation of re-assessment proceedings shall have to be determined with reference to the reasons recorded for reopening of the assessment. The Ld. CIT(A) filed copy of the reasons recorded for reopening of the assessment at pages 14 and 15 of the PB. The same read as under : 6.1. The above recording of reasons for initiation of re-assessment proceedings clearly show that in para 7 A.O. has mentioned Section 147(b) of the I.T. Act is applicable for reopening of the assessment, though such Section does not exist in the statute on the day of recording of the reasons for reopening of the assessment. Column Nos.8 and 9 above are Blank and did not provide any details. It did not say if assessee has filed any return earlier and whether assessee was assessed to tax prior to recording of the reasons, though the fact remain that assessee filed return of income voluntarily for the assessment year under appeal on 31.10.2007 through e-filing and such record was available with the A.O, therefore, non-mentioning of the correct fact would lead to the conclusion that no material was available before A.O. to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able defect under section 292B of the Act. Therefore, the impugned notice cannot be held to be bad for mere incorrect mentioning of section on account of the mistake. 8. There can be no dispute with regard to the application of Section 292B of the Act to sustain a notice from being declared invalid merely on the ground of mistake in the notice. However, the issue here is not with regard to the mistake / error committed by the Assessing Officer while taking a sanction from the Joint Commissioner of Income Tax but whether there was due application of mind by the Joint Commissioner of Income Tax while giving the necessary sanction for issuing the impugned notice. It is a settled principle of law that sanction granted by the higher Authority for issuing of a reopening notice has to be on due application of mind. It cannot be an mechanical approval without examining the proposal sent by the Assessing Officer. Prima facie, it appears to us that if the Joint Commissioner of Income Tax would have applied his mind to the application made by the Assessing Officer, then the very first thing which would arise is the basis of the notice, as the provision of law on which it is based is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow:- Bank Book Date From TO Bank Cheque/RTGS Cheque Date Amount Through Annexure No. Page No, AVAIL Shri Balkishan Agarwal Glass Industries Ltd. ABN PIO No. 947828 11-Nov-04 500000 Neeraj A-148 22 AVAIL Shri Balkishan Agarwal Glass Industries Ltd, ABN PIO No. 947829 11-Nov-04 500000 Neeraj A-148 22 AVAIL Shri Balkishan Agarwal Glass Industries Ltd. ABN PIO No. 947830 11-Nov-04 500000 Neeraj A-148 23 GRAPH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The escapement of income has been clearly on account of failure on the part of the assessee to truly and fully disclose all the material fact necessary for assessment. Thus it is a fit case for initiation of proceedings u/s 148 of I.T.Act, 1961. Therefore, I have reason to believe that an income of Rs,55,00,0QQ/- lias escaped assessment within the meaning of section 147 of the Income Tax Act 1961. No assessment u/s 143(3) has been done earlier. The assessment record is being submitted for kind perusal and approval of the Addl. Commissioner of Income-tax, Range-8, New Delhi according to section 151(1) of the IT Act, 1961 for issuance of notice u/s 148 of the IT Act. Sd/- (Nishtha Tiwari) Dy. Commissioner of Income Tax Circle-8(1), New Delhi 24. We find, in the performa for recording reasons for initiating proceedings under section 148 and for obtaining approval of the Addl. CIT, the AO at para 7 of the performa has mentioned that the assessee has not filed the return voluntarily. The form for recording reasons for initiating the proceedings is reproduced hereunder for the sake of clarity:- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice based on wrong facts is without jurisdiction and has to be quashed. The above decision of the Hon ble High Court was challenged by the Revenue before the apex court and the apex court dismissed the SLP vide SLP No.42379/2007, order dated 9th February 2018. Since, in the instant case, although the assessee has filed return of income which was processed u/section 143(1), however, the AO proceeded to reopen the assessment by mentioning that no voluntary return has been filed by the assessee and, thus, proceeded to reopen the assessment on wrong appreciation of facts on record. 26. We further find the Hon ble Delhi High Court in the case of BPTP vs PCIT, vide Writ Petition No.13803/2018, order dated 11th January 2020, has held that if the AO has failed to perform its statutory duty, he cannot review his decision and reopen on a change of opinion. The reopening is not an empty formality. There has to be relevant tangible material for the AO to come to the conclusion that there is escapement of income and there must be a live link with such material for the formation of the belief. Mearly using the expression failure on the part of the assessee to disclose fully and truly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 133(6) and non-production of the Directors of the Investor Companies made the addition against the assessee. The A.O. in the reasons has mentioned that information was forwarded by Serious Fraud Investigation Office, Delhi which were received through Pr. CIT vide Letter Dated 05.01.2017. The A.O. has also referred to such report based on search and seizure in the case of third parties. The assessee made a request to the A.O. to supply complete copy of the reasons along with Annexures and Report of SFIO Dated 05.01.2017 and approval granted by Pr. CIT. The A.O, however intimated that since SFIO report is confidential, therefore, same cannot be provided to the assessee. Thus, the complete Annexures to the reasons were not provided to the assessee and A.O. has also failed to provide copy of the report dated 05.01.2017 to the assessee which is the basis for reopening of the assessment. Assessee cannot be given surprise to file objections without providing all the relevant material. The report Dated 05.01.2017 is the basis for reopening of the assessment and since it is not confronted and provided to assessee, the assessee may not be able to file proper objections to the reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 9,616/- which was processed under section 143(1) of the I.T. Act, 1961. The assessee declared income from brokerage and commission, interest on loan and profit on sale of investment also. 2.1. An information was received from the O/o. CIT, Central-2, New Delhi, vide letter Dated 14.02.2014 mentioning therein that a search/survey operation under section 132/133A of the Income Tax Act, 1961 was conducted by the Investigation Wing at the business and residential premises of Shri Himanshu Verma and his Group on 29.03.2012 wherein after intensive and extensive inquiry and examination of documents seized during the course of search, it has been gathered that the said persons are involved in providing accommodation entries to the persons who were named in the report. During the course of inquiry made by the Investigation Wing, it also came to the notice that Shri Himanshu Verma was engaged in the business of providing accommodation entries through cheques/PO/DD in lieu of cash to large number of beneficiary companies through various paper and dummy companies floated and controlled by him. The cash received from the parties for providing accommodation entries was first depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 investor companies on the reasons that replies have been received in bunch for similar style of envelopes and posted from three post offices. The A.O. also noted that none of the parties explained as to why high premium was paid and parties have not explained source of the investment. The A.O. also noted that 26 parties filed copy of the ITR, balance sheet, P L A/c and bank statement, but, it shows that their income shown is very meagre in the return of income. The assessee was asked to produce the persons/Principal Officers of these entities for verification. However, assessee did not produce the same. The A.O. also analysed the statement of Shri Himanshu Verma through whom amount have been received and the A.O. ultimately rejected the explanation of assessee on genuine share application money received from 38 parties and made addition of ₹ 11.05 crores. The A.O. further noted that assessee has paid commission in cash for arranging these entries, on which, addition was made of ₹ 22,10,000/- i.e., @ 2% of the amount in question which was also added to the returned income. 3. The assessee challenged the reopening of the assessment as well as addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under section 151 have been granted in a most mechanical manner without applying independent mind by the Pr. Commissioner of Income Tax. He has submitted that Pr. Commissioner of Income Tax has recorded in the approval as under : Form for recording the reasons for initiating proceedings u/s 147 and for obtaining the approval of the Ad CIT/CIT/CBDT 1. Name and address of the assessee M/s. Ganesh Ganga Investment P. Ltd., A-52, Top Floor Street No.l, Guru Nanak Pura, Laxmi Nagar, Delhi 110092 2. PAN AAACG2710J 3. Status Company 4. Ward/Circle Ward-10(1) 5. Asstt. Year in respect of which it is proposed to issue notice u/s 148 2010-11. 6. The quantum of income which has escaped assessment ₹ 2,45,00,000/- 7. Whether the provisions of section 147(a) or 147(b) are applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., vs. Commissioner of Income Tax 258 ITR 317 in which approval by Addl. Commissioner of Income Tax under section 151 was given in the following terms Yes I am satisfied that it is a fit case for issue of notice under section 148 of the I.T. Act. The Hon ble Delhi High Court considering the similarly worded approval did not approve the same and held that in the present case, there has been no application of mind by Addl. Commissioner of Income Tax before granting the approval. The assessee also relied upon Judgment of Hon ble Supreme Court in the case of Commissioner of Income Tax vs., S. Goyanka Lime Chemical Ltd., [2015] 64 taxmann.com 313 (SC) approving the Judgment of Hon ble Madhya Pradesh High Court in the case of Commissioner of Income Tax, Jabalpur vs., S. Goyanka Lime Chemical Ltd., [2015] 56 taxmann.com 390 (M.P.) in which the Departmental SLP has been dismissed on the same reason because the Joint Commissioner of Income Tax recorded satisfaction in a mechanical manner and without application of mind. The assessee also relied upon Judgment of Hon ble Madhya Pradesh High Court in the case of Arjun Singh vs., ADIT [2000] 246 ITR 363 (M.P.) in which also similarl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not belong to Shri Himanshu Verma. In assessment order name of M/s. Management Services Pvt. Ltd., do not appear. PB-13 of the assessment order referred to the statement of Shri Himanshu Verma in which name of M/s. Shubh Propbuild Pvt. Ltd., does not appear. The A.O, therefore, recorded incorrect reasons and did not apply his mind to the material on record. The A.O. has not gone through the record and the balance Company do not belong to the assessee. The statement of Shri Himanshu Verma was not subjected to cross-examination on behalf of assessee, despite making a request to the A.O. [PB-19]. In the statement of Shri Himanshu Verma filed on record, no such companies have been mentioned, therefore, no adverse inference could be drawn against the assessee. The assessee did not receive any notice for production of the parties before A.O. There is no evidence on record of any payment of commission paid by assessee for arranging share capital. Learned Counsel for the Assessee relied upon Order of the ITAT, Delhi Bench in the case of Pioneer Town Planners Pvt. Ltd., vs. DCIT ITA.No.132/Del./2018 Dated 06.08.2018 in which in similar circumstances the re-assessment have been quashed wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied. Therefore, reopening of the assessment is valid because information was received from Investigation Wing that assessee has received accommodation entries. The name of assessee was appearing. Sufficiency of reasons is not required at this stage of formation of re-assessment proceedings. The A.O. cannot do any roving enquiry at initial stage. The assessee failed to prove creditworthiness of the Investor Companies as they were having meagre income. The assessee did not prove genuineness of the transaction in the matter. The A.O. made enquiry from Investors and assessee did not produce parties before A.O. Even a premium have been charged for allotment of shares for which no reasons have been explained. The companies are having meagre income only. Apart from statement of Shri Himanshu Verma, there is enough material to justify the addition on merit. The assessee also did not prove identity and creditworthiness of the Investors even if no cross-examination to the statement of Shri Himanshu Verma have been allowed. The Ld. D.R. relied upon Judgment of Hon ble Supreme Court in the case of Raymond Woollen Mills 236 ITR 34 (SC). He has submitted that information is prima facie rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so evidently established by the Investigation Wing that Sh Himanshu Verma is known entry providers and is the actual controller of more than 100 companies/proprietary firms/partnership firms. They control these entities through various persons by appointing them as directors/partners/proprietors apart from nominating them as authorized signatories for maintaining the bank accounts of these entities but in fact all these persons act only as their stooges. The cash received from the recipient parties for providing the accommodation entries was first deposited in the accounts of these dummy firms/companies in the disguise of the cash received against the bogus sales, duly shown in the books of accounts. From there, this cash was transferred to the different paper companies floated by Sh. Himanshu Verma through a complex trail of transactions, so as to hide the actual sources of funds of the last set of recipient companies of Sh. Himanshu Verma In this way, the reserve surpluses and the capital account of a specific set of companies are enhanced with the help of the unexplained cash received by Himanshu Verma, which is routed to these companies through their dummy firm/companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is to be brought to tax under section 147/148 of the I.T. Act 1961. Moreover, as the case pertains to a period beyond four years from the end of relevant assessment year, for issuing the notice u/s 148, necessary approval / sanction may kindly be accorded by the Pr. Commissioner of Income Tax, Delhi-4, New Delhi in view of the amended provision of section 151 w.e.f 01.06.2015. Sd/- H.K. Sharma, Dated : 27.03.2017. ITO, Ward-10(1), New Delhi. 8.1. PB-29 is the sanction granted by Pr. Commissioner of Income Tax for reopening of the assessment in which it is mentioned as under : 13. Whether the Pr. Commissioner of I. Tax is satisfied on the reasons recorded by the ITO that it is a fit case for the issue of notice u/s.148. Yes I am satisfied that it is a fit case for issue of notice u/s.148 of the I.T. Act, 1961. Sd/-S.K. Mittal, Pr. Commissioner of I. Tax, New Delhi. 8.2. Learned Counsel for the Assessee relied upon Judgment of Hon ble Delhi High Court in the case of United Electrical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Commissioner of Income Tax, Jabalpur (MP) vs., S. Goyanka Lime Chemicals Ltd., [2015] 46 taxmann.com 313 held as under : SLP dismissed against High Court s ruling that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid. 8.4. Similar view have been taken by Hon ble Madhya Pradesh High Court in the case of Mr. Arjun Singh vs., Asst. Director of Income Tax [2000] 246 ITR 363 (MP) (supra), copy of which is filed at page-97 of the paper book. The ITAT, Delhi Bench in the case of M/s. Pioneer Town Planners Pvt. Ltd., vs., DCIT (supra) in paras 7 to 22 on similar facts relating to entry provider Shri Himanshu Verma held as under : 7. Apropos these legal grounds , we have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal. As agreed by both the parties, we have heard argument of both the sides on these legal grounds of the assessee, wherein the assessee has challenged to the initiation of reassessment proceedings and reopening of assessment u/s. 147/148 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be on due application of mind. Sanction accorded despite mention of non-existent section in the notice is prima facie evidence of non-application of mind on the part of the sanctioning authority. Their lordship in this judgment categorically held that such defect cannot be cured u/s. 292B of the Act. 10. The ld. AR placed reliance on the decision of Hon'ble High Court of Delhi dated 31.08.2017 in WP(C) No. 614/2014 in the case of Yum Restaurants Asia Pte Ltd. vs. DDIT it was held that the glaring mistakes in the proforma for approval is the valid ground for quashing the assessment on the premise of non-application of mind by all the authorities involved in the process of recording reasons and providing satisfaction/s. 151 of the Act. Further placed reliance on the decision of ITAT, Mumbai in the case of GTL Ltd. vs. ACIT reported in 37 ITR (Trib.) 0376 (Mum.), notice u/s. 148 of the Act does not mention the fact that the same is issued after the satisfaction of the authority u/s. 151 of the Act, such non-mentioning of this fact renders the consequent assessment invalid in law, Relied on the judgment of DSJ Communication vs. DCIT 222 Taxman 129 (Bom.). 11. On the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Hon ble Jurisdictional High Court of Delhi in the case of PCIT vs. Meenakshi Overseas P. Ltd. 395 ITR 677 (Del) if the reasons failed to demonstrate the link between the tangible material and formation of the reasons to believe that the income has escaped assessment then, it would amount to borrowed satisfaction and it has to be presumed that there is no independent application of mind by the AO to the tangible material which forms the basis of the reason to believe that income has escaped assessment. The ld. AR submitted that from the three pages of reasons recorded, it is discernable that in first four paras the AO has noted facts of the information received from DDIT (investigation), Faridabad, in para 6 modus operandi of entry providers has been noted thereafter, in para 7 8, it has been arisen that either during survey or post survey proceedings the assessee company has not submitted satisfactory explanation to prove identity, genuineness and creditworthiness of share capital/premium introducers and thus, the same is from paper companies of entry operator and then, he recorded satisfaction that the assessee company taken bogus/ accommodation entries. The ld. AR veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. DR submitted that in column 12 of approval the ACIT Shri Sarabjeet Singh has granted valid approval by noting that Yes, I am satisfied which is sufficient to comply with the provisions of s. 151 of the Act. He also submitted that if there is any defect therein the same is rectifiable u/s. 292B of the Act and thus, the reassessment proceedings and orders cannot be challenged on this count. The ld. DR further submitted that the format/proforma for granting approval u/s. 151 of the Act has been designed by the Department and there is no role of AO in framing and designing the same and the allegation of non-application of mind on the basis of such proforma or words used by the approving authority cannot be made. 17. The ld. DR submitted that the team of Revenue officers work under the supervision and guidance of PCIT and the Department is very careful about the compliance of the provision of the Act as well as directions of Hon'ble Supreme Court, Hon'ble High Court and CBDT Circulars and also towards working of the Revenue Officers in the cases of initiation of reassessment proceedings and framing of reassessment orders. The ld. DR submitted that the proforma of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 151 of the Act. As per ratio of the decision of High Court of Madhya Pradesh in the case of CIT v. M/s. S. Goyanka Lime and Chemical Ltd. (supra), where the JCIT/ACIT has only recorded Yes, I am satisfied then, it has to be held that the approving authority has recorded satisfaction in a mechanical manner and without application of mind to accord sanction for issuing notice u/s. 148 of the Act for reopening of assessment and in this situation initiation of reassessment proceedings and reopening of assessment has to be held as invalid and bad in law. Therefore, we are inclined to hold that the reopening of assessment and notice u/s. 148 of the Act are bad in law and consequently all subsequent proceedings in pursuant thereto are also bad in law and the same cannot be held as valid and sustainable. 20. So far as legal contention of the ld. AR on behalf of the assessee regarding non-application of mind by the AO, while recording reasons for reopening of assessment, is concerned from careful perusal and reading of the three pages of reasons recorded, we observe that in first four paras the AO has noted facts of the information received from DDIT (Investigation), Faridabad, fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to the tangible material which form the basis of the reasons to believe that income has escaped assessment. 22. In the present case, as we have noted above, the conclusion recorded by the AO in para 9 10 of the reasons is based on the information received from the director of investigation wing and the AO without making any effort to examine and discuss the material received from the Investigation Wing and without application of the mind to the same formed a reason to believe that income had escaped assessment. This shows that the AO proceeded to initiate reassessment proceedings on the basis of borrowed satisfaction without any application of mind and exercise on the information received from the Investigation Wing of the Department. Therefore, we have no hesitation to hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and to issue notice u/s. 148 of the Act on the basis of borrowed satisfaction and without any application of mind and examination of the so called material and information received from the investigation wing to establish any nexus, even prima facie, with the such information. Therefore, in our considered opinion the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne through the details of the information and has not even applied his mind and merely concluded that he has reason to believe that income chargeable to tax has escaped assessment. In the reasons A.O. has recorded that assessee has received accommodation entry of ₹ 2.45 crores, but, ultimately made an addition of ₹ 11.05 crores without bringing any material against the assessee. The reasons to believe are, therefore, not in fact reasons, but, only conclusion of the A.O. In the case of Meenakshi Overseas Pvt. Ltd., (supra), the A.O. in the reasons has even mentioned that he has gone through the information received which is lacking in the present case. The A.O. being a quasi-judicial authority is expected to arrive at subjective satisfaction independently on his own. The A.O. however, merely repeated the report of the Investigation Wing in the reasons and formed his belief that income chargeable to tax has escaped assessment without arriving at his satisfaction. Thus, there is no independent application of mind by the A.O. to the report of Investigation Wing to form the basis for recording the reasons. The reasons recorded by the A.O. are also incorrect as noted above. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on only. 9. In the result, appeal of Assessee allowed. 5.2. Considering the facts of the case in the light of above decisions, it is clear that all the documents and Annexures referred to in the reasons have not been supplied to the assessee and that approval granted by Pr. CIT is invalid. Therefore, reopening of the assessment is wholly invalid and void abinitio. Resultantly, the reopening of the assessment is liable to be quashed. Following the reasons for decision in the case of M/s. Ganesh Ganga Investments Pvt. Ltd., vs., ITO, Ward-10(1), New Delhi (supra), we set aside the Orders of the authorities below and quash the reopening of the assessment. In the result, all the additions stand deleted. 6. In the result, appeal of Assessee allowed. 6.4. Considering the totality of the facts and circumstances of the case and that wrong Section have been mentioned in the reasons and some of the Columns material for re-assessment are left Blank and that Addl. CIT did not record how he was satisfied on wrong facts and wrong reasons would clearly show that reopening have been done in the matter without application of mind based on wrong facts and as such the reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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