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| The Tax Publishers2020 TaxPub(DT) 0080 (Del-Trib) INCOME TAX ACT, 1961
Section 147
In reasons recorded for reopening of assessment, there was no mention of any independent inquiry or any link between any tangible material and formation of reasons to believe that income chargeable to tax had escaped assessment. Accordingly, mechanical reopening merely on the basis of information received from investigation wing regarding alleged accommodation entries without any independent application of mind by AO was a case of borrowed satisfaction and was thus without jurisdiction.
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Reassessment - Reason to believe - Information emanated from Investigation Wing - No independent application of mind by AO.
AO received information from Investigation Wing as to assessee company having received accommodation entry of Rs. 8 lakhs in the garb of share application money. Accordingly, AO reopened assessment and made addition under section 68. Assessee challenged this on the ground of non-application of mind by AO to information emanated from investigation wing.Held: In reasons recorded for reopening of assessment, there was no mention of any independent inquiry or any link between any tangible material and formation of reasons to believe that income chargeable to tax had escaped assessment. Accordingly, mechanical reopening merely on the basis of information received from investigation wing regarding alleged accommodation entries without any independent application of mind by AO was a case of borrowed satisfaction and was thus without jurisdiction.
Follwed:ACIT v. Dhariya Construction Co. (2011) 197 Taxman 202 (SC) : 2010 TaxPub(DT) 1530 (SC), CIT v. SFIL Stock Broking Ltd. (2010) 325 ITR 285 (Delhi) : 2010 TaxPub(DT) 1872 (Del-HC), Pr CIT v. RMG Plyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Delhi) : 2017 TaxPub(DT) 2034 (Del-HC), Pr. CIT v. Meenakshi Overseas (P) Ltd. (2017) 395 ITR 677 (Del.) : 2017 TaxPub(DT) 1791 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
IN THE ITAT, DELHI BENCH
H.S. SIDHU, J.M.
Giggle Infotech (P) Ltd. v. ITO
ITA No. 1284/Del/2018
1 January, 2020
Assessee by : Deepak Ostwal, FCA
Department by : Pradeep Singh Gautam, Sr. DR
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