Labh Combines Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Reopening Quashed for Non-Application of Mind – Wrong AY Borrowed Satisfaction from Investigation Wing – Sec 147 Jurisdiction Invalid – ITAT Kolkata
ITAT Kolkata quashed reassessment holding that AO reopened case mechanically based on investigation wing information relating to wrong financial year, demonstrating complete non-application of mind. Tribunal observed that reasons recorded merely reproduced third-party report without establishing live nexus with escapement of income for relevant AY, amounting to borrowed satisfaction. Relying on Meenakshi Overseas, Shodiman Investments & SFIL Stock Broking, ITAT held that absence of independent reasoning vitiates jurisdiction u/s 147 and consequently annulled reassessment order without examining merits. Appeal allowed in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal filed by the assessee arises from order dated 06.10.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter referred to as “the Ld.CIT(A)].
2. The assessee has challenged the reopening of assessment u/s 147 of the Act by issuing notice u/s 148 of the Act on 30.03.2021 based on incorrect information received from the DDIT (Inv.), Unit-1(3), Kolkata and without any application of mind by the AO and without there being any tangible material showing live link with escapement of income.
