TaxTMI 
TaxTMI 
2026 (2) TMI 936
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....elhi [hereafter referred to as "the Ld.CIT(A)]. 2. The assessee has challenged the reopening of assessment u/s 147 of the Act by issuing notice u/s 148 of the Act on 30.03.2021 based on incorrect information received from the DDIT (Inv.), Unit-1(3), Kolkata and without any application of mind by the AO and without there being any tangible material showing live link with escapement of income. 3. The facts in brief are that the assessee filed return of income u/s 139(1) of the Act on 13.10.2017 showing total income at Rs. 1,72,78,870/-. Thereafter, AO received information from DDIT (Inv.) Unit-1(3), Kolkata that the assessee has taken accommodation entry in the form of unsecured loan or an in other forms to the tune of Rs. 2,00,35,589/-....
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....ge no. 96 of the paper book which is extracted below: "The Assessee company filed its return of income on 13 10.2017 declaring total income at Rs 1,72,78,870/-. No assessment u/s 143(3) of the Income-tax Act, 1961, or u/s 147 of the act has been made in this case. 2. Subsequently information was received on 14.12.2018 from DDIT (Inv.), Unit-1(3) Kolkata that the assessee company has availed the accommodation entry in from of unsecured loan or and in other forms to the tune of Rs. 2,35,00,589/- during the F. Yr. 2045,16. Out of which Rs. 1,80,00,429/- was taken from Mis M A Finance Services Pvt. Ltd. and Rs. 55.00.160/- was from M/s Zenith Fiscal Services Pvt. Ltd. 3. Search & seizure operation u/s 132 of the Incom....
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....he AO at that point of time. The material facts regarding accommodation entry involve in the information was not disclosed by the Assessee company during the course of regular assessment. 6. In view of the above, provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income of chargeable to tax has escaped assessment. Hence, I have reason to believe that 55.00.160-chargeable to tax has escaped assessment for the AY 2017-18." 6. A perusal of above reasons, reveals that the AO in para 2 has stated that as per the information received from DDIT (Inv.), Unit-1(3), Kolkata assessee has received accommodation entry in the fo....
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....ly exercised. It certainly cannot be invoked casually or mechanically. The heart of the provision is the formation of belief by the Assessing Officer that income has escaped assessment. The reasons so recorded have to be based on some tangible material and that should be evident from reading the reasons. It cannot be supplied subsequently either during the proceedings when objections to the reopening are considered or even during the assessment proceedings that follow. This is the bare minimum mandatory requirement of the first part of section 147 (1). [Para 24] The first part of section 147(1) of the Act requires the Assessing Officer to have "reasons to believe" that any income chargeable to tax has escaped assessment. It is thus....
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....axmann.com 153 dated 16.04.2018 has held as under: The submission of the Dept that in view of Rajesh Jhaveri 291 ITR 500 (SC), the AO can reopen the assessment for "whatever reason" is preposterous. The AO cannot reopen on the basis of info received from DIT (Investigation) that a particular entity has entered into suspicious transactions without linking it to the assessee having indulged in activity which could give rise to reason to believe that income has escaped assessment. Such reopening amounts to a fishing inquiry. The AO has to apply his mind to the information received by him from the DDIT (Inv.) and cannot act on borrowed satisfaction. It is for this reason that the recorded reasons even does not indicate the amount which....