Notice U/s 147

[Saurav Dugar]

Please answer the Query with Case law if any

X pvt ltd purchase from Mr. Y.Search & Seizure was Carried out on Mr. Y.A statement U/s 131(1) of Mr.Y was recorded wherein he had admitted that he has engaged in providing accommodation entries through his bougus Concern. X pvt ltd is also one of the beneficiaries assesed by Department.AO has Reason to believe that X pvt ltd has received bogus enteries from Mr.Y and has escaped assessement u/s 147.

My query wether the case was fit for re-opening u/s 147 base on search carried on third party from that A.O has Reason to believe that X pvt ltd has Escaped income is A.O tenable to open a case U/s 147. if not please provide remedy for that with supporting Case law..Thank U..

AI Summary

Reopening Tax Case under Section 147 Requires Solid Evidence, Not Just Suspicion; Legal Options for Assessees Explained A forum user inquired about the validity of reopening a case under Section 147 of the Income Tax Act, based on a search conducted on a third party, Mr. Y, who admitted to providing bogus entries. The respondent explained that for a valid notice under Section 148, the assessing officer must have a 'reason to believe' that income has escaped assessment, which cannot be based on mere suspicion. The officer must document reasons, and new material must emerge. If the notice is challenged, the assessee can file objections or a writ petition in the High Court, referencing the GKN Driveshafts case.