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2018 (12) TMI 912 - AT - Income TaxRevision u/s 263 - Reopening of assessment u/s 147 - Held that:- The assessee could be permitted to challenge the validity of the Order passed under section 263 on the ground that the assessment order was non-est.” Since the reassessment order itself is bad in law, therefore, Learned Counsel for the Assessee, rightly contended that the same cannot be revised under section 263. Only valid re-assessment order can be revised under section 263. On this ground itself the proceedings under section 263 of the I.T. Act are bad in law and liable to be quashed. We, accordingly, set aside the Order of Pr. CIT passed under section 263 and quash the same. The remaining plea of the assessee are not required to be adjudicated. However, we may briefly note that A.O. examined entire seized material at the time of recording reasons and re-assessment stage. The assessee produced sufficient evidences at the re-assessment proceedings to prove the identity of the creditors, their creditworthiness and genuineness of the transaction. The A.O. also made direct enquiry by issuing summons under section 133(6) of the I.T. Act to the Investors who have also replied directly to the A.O. Therefore, A.O. rightly accepted the credits as genuine. In view of the above finding, there is no need to give a finding in detail on merits. In view of the above, we allow the appeal of assessee. Reopening of assessment - non independent application of mind - Held that:- A.O. on the basis of the information and material received from Investigation Wing has recorded reasons for reopening of the assessment which was ultimately found to be incorrect and non-existent. It is well settled law that when no new material other than examined by the A.O originally found on record for the purpose of initiating the re-assessment proceedings, the proceedings under section 148 would be invalid and bad in law. We rely upon decision of Delhi High Court in the case of Atul Kumar Swamy [2014 (3) TMI 759 - DELHI HIGH COURT]. The Hon’ble Delhi High Court in the case of SNG Developers Ltd.[2017 (7) TMI 575 - DELHI HIGH COURT] held that when A.O. initiated the re-assessment proceedings without application of mind, such proceedings would be invalid. A.O. in the present case has failed to verify the information received from Investigation Wing. Therefore, it is non-application of mind on the part of the A.O. to record correct facts in the reasons for reopening of the assessment. In such circumstances, the re-assessment order could not be treated as valid and in accordance with law. Since re-assessment proceedings are invalid and bad in law, therefore, such proceedings could not be revised under section 263 of the I.T. Act. We set aside the order passed by the Ld. Pr. CIT under section 263 of the I.T. Act and quash the same. - Appeal of the Assessee is allowed.
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