Rajendra Prasad Choudhary Vs ACIT (ITAT Jaipur)
The Jaipur ITAT allowed the assessee’s appeals for Assessment Years 2012-13 and 2013-14, holding that the reassessment proceedings initiated under Section 147 were invalid as they were based on borrowed satisfaction rather than the Assessing Officer’s independent application of mind. The Tribunal also found violation of principles of natural justice due to denial of cross-examination and observed that the additions were unsustainable even on merits.
The assessee’s case was reopened on the basis of information received from the DGIT (Investigation), Mumbai, alleging that certain entities were engaged in providing accommodation entries and that the assessee had purchased goods amounting to ₹1.81 crore from such concerns. Based on this information, the Assessing Officer formed an opinion that income corresponding to these purchases had escaped assessment. During reassessment proceedings, the Assessing Officer treated 25% of the purchases as non-genuine and made additions accordingly. The CIT(A) upheld the reopening but reduced the additions by estimating profit at 8.5% and 9.5% of the disputed purchases.
Before the Tribunal, the assessee challenged the validity of the reopening, contending that the Assessing Officer had merely acted on information supplied by the Investigation Wing without conducting any independent enquiry or arriving at his own satisfaction regarding escapement of income. The assessee argued that the reasons recorded for reopening showed that the Assessing Officer relied solely on information from DGIT (Investigation), Mumbai, and failed to undertake any independent verification. It was further submitted that neither copies of the statements relied upon by the Department nor the information forming the basis of the reopening were supplied to the assessee. Despite repeated requests before both the Assessing Officer and the CIT(A), no opportunity was granted to cross-examine the persons whose statements were relied upon.
