Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1311 - AT - Income TaxReopening of assessment u/s 147 - as recorded in reasons AO has reopened the assessment solely on the basis of suggestion/dictum of DGIT(Inv.), New Delhi - non application of mind being constitutes borrowed satisfaction - HELD THAT:- From the reasons recorded by the AO, it is evident that he has formed reason to believe that income of ₹ 85,00,000/- has escaped assessment within the meaning of section 147 based on the suggestion of DDIT(Inv.), New Delhi that in the case of the assessee, notice u/s 148 of the Act for AY 2010-11 is required to be issued to bring to tax the undisclosed income regarding accommodation entry of ₹ 85,00,000/- obtained by the assessee. The provisions of section 147 mandates that reassessment proceedings can be attracted only if the AO has “reason to believe” that any income chargeable to tax has escaped assessment. It is the opinion and belief of the AO which initiates reassessment proceedings and not the suggestion of any superior or parallel authority. The suggestion of DDIT(Inv.) does not confer power to assume jurisdiction up on the AO to initiate reassessment proceedings. Therefore, in the present case, the reasons for initiating reassessment proceedings are against the spirit of provisions of section 147 of the Act and the notice issued u/s 148 of the Act on the suggestion of DDIT(Inv.) by the AO is bad in law. AO has proceeded to initiate reassessment proceedings u/s 147 of the Act and to issue notice u/s 148 of the Act 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 such information, by way of borrowed satisfaction and following Deepraj Hospital Pvt. Ltd. [2018 (6) TMI 496 - ITAT AGRA] we accept the grievance of the assessee justified. As such, the impugned order, notice u/s 148 of the Act and reassessment proceedings u/s 147 are not sustainable in the eyes of law. - Decided in favour of assessee.
|