2020 (1) TMI 460 - AT - Income Tax

Revision u/s 263 - reassessment u/s 147 - AO was satisfied the explanation of the assessee with regard to Accommodation entries. - Assessee submitted that, assessment was reopened based on mere Investigation Wing appraisal report - Revenue submitted that, assessment erroneous as well as prejudicial to the interests of the Revenue because A.O. has not examined the seized material found during the course of search.

Held that:- it is clear that the Addl. CIT and Ld. Pr. CIT while granting approval for reopening of the assessment under section 147/148 of the I.T. Act merely stated “Yes”, which would show that they have not applied their independent mind and merely accorded sanction without going through any material on record. The issue is thus covered against the Revenue by the aforecited decisions in which even on more facts the approval was not found valid.

Reopening of the assessment in this case is invalid, bad in law and therefore, such re-assessment proceedings could not be reopened under section 263 of the I.T. Act, 1961. It may also be briefly noted that the A.O. in the reasons recorded in the assessment order has mentioned that assessee has received accommodation entries in assessment year under appeal from five parties in a sum of ₹ 70 lakhs and after reopening of the assessment, A.O. called for the details and documents from the assessee and was satisfied with the explanation of assessee, therefore, the of proceedings under section 263 of the I.T. Act by the Ld. Pr. CIT could not have substituted the view taken by the A.O.

Revision order quashed and set aside.