Invalid reopening based on borrowed satisfaction and incorrect facts was quashed for lack of independent application of mind.

Reopening of assessment under sections 147 and 148 was held invalid where the recorded reasons rested on incorrect factual premises about share capital, premium, and recipient entities. The Tribunal found borrowed satisfaction: the Assessing Officer relied on Investigation Wing information without independent application of mind, so the belief for reopening was defective. It also held that reopening could not be based only on search or survey statements without corroborative material. The reassessment was quashed and the consequential assessment was set aside.

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Issues: Whether the reopening of assessment under sections 147 and 148 was valid when the reasons recorded proceeded on incorrect factual premises and borrowed satisfaction.

Analysis: The Tribunal found that the reasons recorded for reopening were factually inconsistent with the assessee's accounts, including the amount of share capital received, the alleged premium, and the identity of alleged recipient entities. It held that the Assessing Officer had acted on information from the Investigation Wing without independent application of mind, rendering the formation of belief defective. The Tribunal also held that reopening could not rest merely on statements recorded during search or survey without corroborative material.

Conclusion: The reopening of assessment was quashed as invalid in law, and the consequential assessment was set aside.

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