TaxTMI 
TaxTMI 
2021 (11) TMI 379
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....12/2016 on certain grounds. In ground No. 1, the assessee has challenged the reassessment jurisdiction of Ld. AO and the ground read as under:- 1. issue of Notice u/s. 148 with infirmities and against invalid reasons to believe - Impugned Order may be quashed on the ground of jurisdictional defect The Id. CIT erred in not appreciating that when the reopening notice u/s. 148 is besieged with legal infirmities as outlined herein below, the same may be treated as void-ab-initio and consequently, the order impugned may be quashed on the following factors: (i) that the Report of the ADIT(Inv) is not a valid formation of belief by the Assessing Officer out of his own satisfaction; hence, the reason to believe on borrowe....
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....ted and addition of Rs. 4.70 Lacs was made in the hands of the assessee on the allegation that the loss from F&O transactions was fictitious loss obtained through Client Code Modification. 4. During appellate proceedings, the assessee assailed the reassessment proceedings, inter-alia, on the ground that the case was reopened merely upon receipt of information from investigation wing about entering into suspicious transactions. However, there was no independent application of mind by Ld. AO as to formation of belief that the income had escaped assessment. The reopening was done merely on borrowed satisfaction. However, the legal grounds were rejected on the ground that there was clear cut information that the assessee's broker had shi....
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....essment within the meaning of section 147 of the Income Tax Act, 1961. Upon perusal of the recorded reasons, it could be gathered that the reasons have been recorded in a mechanical manner without ascertaining as to how the assessee has obtained fictitious losses through client code modification. The reasons are mere repetition of the information received from investigation wing without establishing the linkage of the assessee with the broker who manipulated the transactions. The details/nature of transactions which would, prima-facie, lead to reasonable belief of escapement of income has not been specified in the recorded reasons. The Hon'ble High Court of Bombay in the case of Pr. CIT V/s. M/s. Shodiman Investments Pvt. Ltd. (IT....
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....n received from the DIT (Investigation) about a particular entity, entering into suspicious transactions. However, that material is not further linked by any reason to come to the conclusion that the Respondent-Assessee has indulged in any activity which could give rise to reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped Assessment. It is for this reason that the recorded reasons even does not indicate the amount which according to the Assessing Officer, has escaped Assessment. This is an evidence of a fishing enquiry and not a reasonable belief that income chargeable to tax has escaped assessment. 14. Further, the reasons clearly shows that the Assessing Officer has not applied his m....