Ankit Financial Services Ltd. v. Dy. CIT

INCOME TAX ACT, 1961

--Reassessment--Notice under section 148Base information from investigation wing as to receipt of accommodation entries----Where AO sought to reopen the assessment on the basis of information orginating from investigation wing as to assessee being beneficiary of entry operators, AO could not be said to having no material for reopening and at that stage he was not required to have finally ascertained the fact by legal evidence or conclusion, therefore, reopening of assessment was found justified.--AO received information from investigation wing as to assessee being beneficiary of entry operators. AO sought to reopen the assessment. Assessee challenged reopening on the ground that AO while framing assessment had accepted the return in toto without doubting any transaction and solely on the basis of borrowed satisfaction, concluded assessment couldnot be reopened. Held: It could not be said that there was no material before AO to reopen the assessment. Information furnished at the time of original assessment. When by subsequent information received from the investigation wing itself was found to be controverted, the objection to the notice of reassessment under section 147 must fail. At the stage of issuance of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief was within the realm of subjective satisfaction of the AO. Therefore, reassessment notice could not be said to be without jurisdiction.