DCIT Vs Vedanta Resources Private Limited (ITAT Kolkata)
Reopening Quashed for Borrowed Satisfaction Assessment Held Time-Barred – Revenue Appeal Dismissed
The Kolkata ITAT allowed the assessee’s cross-objection and quashed the reassessment proceedings on two independent legal grounds. First, the Tribunal held that the reopening under Section 147 was invalid as it was based purely on information from the Investigation Wing without any independent application of mind by the Assessing Officer. The reasons recorded were found to be cryptic, vague and merely a reproduction of the investigation report, amounting to “borrowed satisfaction”, with no live link between the material and formation of belief. Relying on PCIT v. Meenakshi Overseas (Delhi HC) and PCIT v. Shodiman Investments (Bombay HC), the Tribunal held the assumption of jurisdiction itself to be bad in law.
Secondly, the Tribunal held the reassessment order to be barred by limitation since the assessment order dated 31.03.2022 was dispatched only on 02.04.2022 and served on 04.04.2022, i.e., after expiry of the statutory time limit. Following CIT v. BJN Hotels Karnataka and CIT v. Kuppumalai Estate, it was held that an order is “passed” only when it leaves the control of the Assessing Officer within limitation. Consequently, both the notice under Section 148 and the reassessment were quashed, rendering the Revenue’s appeal on merits infructuous and dismissed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
