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2023 (10) TMI 193 - AT - Income TaxReopening of assessment u/s 147 - investment in penny stock company - information received from DDIT(Inv), Unit-8(3), Mumbai stating that the assessee has traded in penny stock /shares of M/s Nivyah Infrastructure and Telecom Services Pvt. Ltd to bring its unaccounted income in the books through, circuitous route during AY 2011-12 - HELD THAT:- As decided in SOUTH YARRA HOLDINGS [2019 (3) TMI 582 - BOMBAY HIGH COURT] on receipt of information, the least that is expected of the Assessing Officer is to examine the same in the context of the facts of this case and satisfy himself whether the information received does prima facie lead to a reasonable belief that income chargeable to tax has escaped assessment. In this case, the reasons indicate that the Assessing Officer has not carried out such exercise and accepted the report of DDIT(Inv), Unit-8(3), Mumbai to conclude that the petitioner had dealt with Nivyah Infrastructure and Telecom Services Ltd during the previous year relevant to the assessment year 2011-12. Admittedly, there was no company by name "M/s Nivyah Infrastructure & Telecom Services Ltd" in existence during that year for consideration. This clearly shows that the Assessing Officer acted on the satisfaction of the Deputy Collector of Income Tax (Investigation) that income chargeable to tax has escaped assessment. It must also be borne in mind that the impugned notice is issued beyond the period of four years from the end of the relevant assessment year in a case, where the assessment was completed u/s 143 (3) - Therefore, the Assessing Officer would have to examine the information received in the context of the facts on record. If such an exercise were to be done, it is likely that the Assessing Officer would have come to the conclusion that there was no failure to disclose truly and fully all material facts necessary for assessment. Thus, hit by the proviso to section 147 - AO has not applied his mind to the information received in the context of the facts on record. Appeal of the assessee is allowed.
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