Arpanbhai Virambhai Desai Vs ITO (ITAT Ahmedabad)
Reopening Based Only on ACB Report = Borrowed Satisfaction! ITAT Quashes All 147 & 263 Orders- No Specific Asset, No Independent Mind – Tribunal Strikes Down Reassessments & Revisions
All four appeals were heard together as they arose from a common set of facts. AO reopened all the years u/s 147 based on information from the Anti-Corruption Bureau (ACB) alleging disproportionate assets (DA) in the hands of Assessee’s father (a government employee) & family members, including the Assessee. For AYs 2014-15 & 2015-16, reassessment orders were also revised by PCIT u/s 263. For AYs 2017-18 & 2018-19, reassessments were completed u/s 147 r.w.s 144C.
Assessee challenged the validity of reopening u/s 147 in all years. Tribunal examined the reasons recorded by the AO & found that:
- AO merely reproduced DA figures from ACB report without identifying which specific income or asset had escaped assessment.
- The reasons were vague & lacked any description of the alleged property or transaction.
- AO stated “no further enquiry is required” & blindly relied on ACB report.
- There was no independent application of mind by AO.
- The belief of escapement was borrowed satisfaction, not AO’s own.
Tribunal relied on the Gujarat High Court in Kantibhai Dharamsinhbhai Narola & held that application of mind to tangible material is mandatory & reopening cannot be based on borrowed or vague reasons. Accordingly, the reopening u/s 147 was held invalid for AYs 2014-15 & 2015-16, & the reassessment orders were quashed.
