INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Reopening on basis of information emanated from investigation wing -

AO received information as to assessee being beneficiary of Rajendra Jain Group and having obtained accommodation entries in the form of purchase/loan from concerns controlled and managed by Rajendra Jain. Accordingly, AO reopened assessment. Assessee challenged reopening contending that there were no reasons to believe and AO reopened the case simply forming opinion without bringing on record any corroborate evidence. Held: Reasons recorded or the material available on record must have nexus to subjective opinion formed by AO regarding escapement of income but then, while recording reasons for belief formed, AO is not required to finally ascertain the factum of escapement of tax and it is sufficient for AO in case he had cause or justification to know or suppose that income had escaped assessment. In the instant case, AO had specific information based on which and after recording of reasons and approval, assessment was reopened. Therefore, reopening was sustained as valid.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 145(3)

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