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2021 (3) TMI 55 - HC - Income TaxReopening of assessment u/s 147 - material before the assessing Officer to reopen the assessment or not ? - borrowed satisfaction or independent application of mind by AO - HELD THAT:- AO has initiated the proceedings not only on the basis of the information received from the concerned Department, but based upon his independent satisfaction and other available materials to form a belief with regard to the escaped assessment of income. The reasons recorded further establish that, the prop. of R S enterprise is the husband of Smt. Harshaben Gosai having financial transactions with the R.S Enterprise and Marshal Enterprise and all these entities including JK enterprise and P M & Co. have no business activities and were managed to provide accommodation entries and routed the money through bank transactions showing the transactions as sale and purchase issuing bogus invoices without actual delivery of goods. There was live link or direct nexus between the material which suggested the escapement of income and information on the basis of which, it could be said that, the income has escaped assessment. Assessing Officer has acted on specific information and after collecting the available material as referred to above has opened his mind through reasons and formed a belief that, the income has escaped assessment. It is settled law that, at the stage of Section 148 of the Act, what is required is “reason to believe”, but not the established fact of escapement of income. Thus it cannot be said that there was no material before the assessing Officer to reopen the assessment and he proceeded mechanically based on the information received from the Income Tax Department, Ahmedabad. The information of Smt. Bhavnaben Gosai has some relevance with the transactions reflected in the bank account of the assessee. Therefore, it cannot be said that, the Assessing Officer has mechanically relied on the third party information and the proceedings being initiated for verification and inquiry. Proceeding has been initiated after four years and the sanction accorded by the authority as contemplated under Section 151 of the Act is not legal and valid - The sanction order has n ot been placed on record by the assessee. The intimation letter cannot be termed as approval given by the authority. Therefore, in absence of any other evidence indicating that, the authority concerned has mechanically accorded the sanction as contemplated under Section 151 of the Act, the contention raised by the writ applicant cannot be accepted. As examined the order of disposing the objections by the authority. By going through the said order, we find that, the objections submitted by the assessee has been extensively dealt with and detailed order came to be passed. Therefore, the decision arrived at by the authority to reopen the assessment is just and proper. Thus it cannot be said that, the impugned notice issued under Section 148 of the Act is without jurisdiction and contrary to Section 147 of the Act and/or bad in law. - Decided in favour of revenue.
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