Borrowed satisfaction in reassessment cannot sustain reopening without independent application of mind by the Assessing Officer.

Reassessment under sections 147 and 148 was treated as invalid because the Assessing Officer acted only on Investigation Wing information about alleged accommodation entries. The recorded reasons did not show any independent verification of the material or any separate formation of belief on the basis of facts available with the Assessing Officer. Reopening based on borrowed satisfaction, without independent application of mind, was therefore impermissible and the reassessment proceedings were held illegal and void.

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Issues: Whether the reassessment initiated under sections 147 and 148 of the Income-tax Act, 1961 was valid where the Assessing Officer relied on information from the Investigation Wing without independent application of mind.

Analysis: The reopening was founded on information received from the Investigation Wing regarding alleged accommodation entries. The recorded reasons did not show any independent verification by the Assessing Officer or any separate formation of belief on the basis of the material available with him. Reassessment based only on borrowed information, without such independent application of mind, was held to be impermissible.

Conclusion: The reassessment proceedings were held to be illegal and void, and the assessee succeeded on the legal challenge.

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