Belong Tracom Private Limited Vs ITO (ITAT Guwahati)
Borrowed Satisfaction Fatal: Guwahati ITAT Quashes Reopening Based Solely on Investigation Wing Input
The Guwahati Bench of the ITAT allowed the appeal of Belong Tracom Pvt. Ltd. vs. ITO, Ward 2(1), Dibrugarh, ITA No. 254/GTY/2019, AY 2011-12, vide order dated 18.12.2025, and quashed the reopening u/s 147 and notice u/s 148 as being bad in law
The Assessee had originally filed its return declaring a nominal loss, which was processed u/s 143(1). Subsequently, the AO reopened the assessment based on information received from the Investigation Wing, Kolkata, alleging that the Assessee was a beneficiary of accommodation entries from a shell company. Based on this, the AO issued notice u/s 148 and ultimately made an addition of ₹1.35 crore u/s 68 towards unexplained share application money.
The Tribunal noted that the reasons recorded for reopening were a mere reproduction of the Investigation Wing’s report, without any independent application of mind or objective satisfaction by the AO. There was no live link shown between tangible material and formation of belief that income had escaped assessment. The reopening was thus held to be based on borrowed satisfaction, which is impermissible in law.
Placing reliance on the landmark ruling of the Delhi High Court in PCIT vs. Meenakshi Overseas (P) Ltd. (395 ITR 677) and the Calcutta High Court decision in PCIT vs. Krishna Nirman Pvt. Ltd., the Tribunal held that recording of “reasons to believe” cannot be reduced to “reasons to suspect”.
Accordingly, the entire reassessment proceedings were quashed, and since the jurisdiction itself failed, the addition u/s 68 and other grounds were left open. The Assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT GUWAHAT
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Dibrugarh (hereinafter referred to as the “Ld. CIT(A)”] dated 26.04.2019 for the AY 2011-12.
