Case Law Details
Paresh Babubhai Bahalani Vs ITO (Gujarat High Court)
Gujarat High Court held that reopening of assessment under section 147 of the Income Tax Act merely based on ‘borrowed satisfaction’ as against statutory requirement of ‘independent satisfaction’ is bad-in-law.
Facts- The petitioner who is an individual filed his return of income for A.Y. 2017-18 on 21.06.2017 declaring total income of Rs.7,67,190/- including the income under the head “Profit and Gains from business or profession” in accordance with the provisions of Section 44AD of the Act.
The respondent-AO issued impugned notice dated 31.03.2021 u/s. 148 of the Act for reopening the assessment. Notably, as per the reasons for reopening recorded by AO, the petitioner has entered into unaccounted transactions during the year under consideration as per the information made available through Insight Portal along with the report of the Deputy Commissioner of Income Tax, Central Circle, Surat which reveals that the petitioner has entered into unaccounted transaction of Rs.44,34,265/-during the year under consideration. The respondent was therefore of the view that such unaccounted transaction represents income of the petitioner which has escaped assessment.
The petitioner filed objections on 09.10.2021 contending that no escapement of income chargeable to tax emanates from the reasons for reopening as the same are vague and nonspecific. The respondent by order dated 08.12.2021 disposed of the objections holding that the reopening is justified. Being aggrieved, the petitioner has preferred this petition.
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