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Reassessment reopening for alleged bogus LTCG via shell entities, based on copied investigation report, quashed for no 'reason to believe' Reopening of assessment was challenged on the ground that the AO's recorded reasons lacked independent application of mind and were merely a reproduction ...
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Reassessment reopening for alleged bogus LTCG via shell entities, based on copied investigation report, quashed for no "reason to believe"
Reopening of assessment was challenged on the ground that the AO's recorded reasons lacked independent application of mind and were merely a reproduction of an investigation report alleging bogus LTCG and accommodation entries through alleged shell entities. The HC held that such reasons do not satisfy the statutory requirement of "reason to believe" because the AO must form an independent belief on relevant material; consequently, the reassessment and related additions were unsustainable. The SC dismissed the revenue's SLP both on delay and on merits, thereby affirming the HC's quashing of the reopening and consequential additions.
The Supreme Court, exercising its discretionary jurisdiction under Article 136, dismissed the Special Leave Petition both "on the ground of delay as well as on merits." By doing so, the Court held that the petitioner had not satisfactorily explained the delay in approaching the Court, thereby failing to meet the threshold for condonation of delay. Independently of this procedural defect, the Court also found no substantive ground warranting interference with the impugned order, indicating that even if the delay were overlooked, the petition lacked merit under the standards governing Special Leave Petitions. The dual basis of dismissal-procedural (delay) and substantive (merits)-reinforces the finality of the lower forum's decision and leaves no scope for further challenge in this proceeding. The Court further directed that all pending applications, "if any, shall stand disposed of," thereby bringing an end to all ancillary or interim proceedings connected with the Special Leave Petition.
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