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2021 (2) TMI 781 - ITAT CHANDIGARHReopening of assessment u/s 147 - primary argument of the assessee challenging the assumption of jurisdiction by the AO u/s 147 on the premise that the reasons recorded by the AO for assuming jurisdiction to reopen the case were bad in law, being based on incorrect facts which showed no application of mind by the AO on the information in his possession and also that the satisfaction for escapement of income was not his own but borrowed - HELD THAT:- Reassessment proceedings undertaken by the AO in the present case were invalid since the reasons recording his satisfaction of escapement of income were based on incorrect facts and there was no application of mind at all by the AO. The fallacies in the facts pointed out by the ld. counsel for the assessee, regarding the quantum of bogus purchases noted by the AO in his reasons as also name of one of the parties, has not been disputed or controverted by the Revenue. Even the fact recorded by the AO in the reasons that the bogus bills had been debited to the Profit & Loss Account was incorrect which is evident from the fact that the ld. CIT(A) in his order passed on merits has found these bills to be relating to purchase of fixed assets and has accordingly, made the disallowance of only depreciation relating to the same, which has not been challenged by the Revenue before us. It is clearly evident that on receiving information from the Commercial Tax Department, the ld. AO did not even care to verify the same from his records from where all these factual inaccuracies would have been brought out. Non application of mind by the AO and the belief of escapement of income is definitely not his own but borrowed from that of the commercial tax officer who had forwarded the information. The basic requirement of law for reopening an assessment is application of mind by the AO to the material or information in his possession to conclude and arrive at a satisfaction therefrom that income has escaped assessment. Both application of mind and satisfaction/belief of the AO are lacking in the present case. The reassessment therefore we hold is invalid. The case laws relied upon by the Ld.Counsel for the assessee support the case of the assessee. The order passed by the AO is, therefore, set aside.
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