Reassessment merely based on information received from investigation wing is bad in law

AmritBrakewell Products Vs ITO (ITAT Delhi)

ITAT Delhi held that reopening of assessment proceedings merely on the basis of information received from the investigation wing is invalid and bad in law and hence liable to be quashed.

Facts- Vide the present appeal, the appellant mainly contested that learned CIT(A) has erred both in facts and in law in upholding the reassessment proceedings as there is no live nexus between the reasons recorded and belief formed by AO.

Conclusion- In view of the above, I have no hesitation to hold that from the reasons recorded I am unable to see any exercise done by the AO to ensure what is the character of alleged accommodation entries and no exercise has been undertaken by him regarding impugned five entries tabulated in the reasons recorded. In the last operative part he again reiterated that on the basis of information received from Investigation Wing he has reason to believe that income as escaped assessment. Therefore, it is clear that AO has acted only on the basis of information received from Investigation Wing without any exercise it has own level and only on the basis of borrowed satisfaction, he initiated the reopening of assessment u/s 147 and issued notice u/s 148 of the Act, which are invalid being bad in law and liable to be quashed.

FULL TEXT OF THE ORDER OF ITAT DELHI

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