Aditya Multipack Solutions Private Limited Vs ITO (ITAT Ahmedabad)
Ahmedabad ITAT: Reopening Based Solely on Borrowed Satisfaction from Investigation Wing Is Invalid; Third-Party Search Cases Must Follow Section 153C
The Ahmedabad ITAT allowed the assessee’s appeal and quashed the reassessment, holding that an Assessing Officer cannot reopen an assessment merely by reproducing information received from the Investigation Wing without any independent application of mind. Where the information emanates from a search conducted on third parties, the Revenue must follow the specific procedure prescribed under Section 153C and cannot bypass it by invoking Section 147.
The reassessment was initiated on the allegation that the assessee had received bogus accommodation entries of ₹2.01 crore from concerns controlled by Shri Jignesh Shah and Shri Sanjay Shah, based solely on information received from the Investigation Wing. The assessee consistently denied the transactions, sought copies of the material relied upon and requested particulars of the alleged accommodation entries, but no such material was furnished by the Assessing Officer.
The Tribunal found that the recorded reasons merely reproduced the Investigation Wing’s information and contained no independent analysis or satisfaction demonstrating that income had escaped assessment. Since the information originated from a search on third parties, the Assessing Officer ought to have proceeded under Section 153C after complying with the statutory requirements instead of resorting to Section 147.
The Tribunal further observed that no independent enquiry was conducted, no seized material or statements were supplied to the assessee, and no evidence was brought on record to establish that the assessee had actually received the alleged accommodation entries. The addition under Section 69A was therefore founded merely on unverified information.
Holding that the assumption of jurisdiction under Section 147 itself was invalid, the Tribunal quashed the reassessment. It also observed that even on merits, the Revenue had failed to produce any prima facie evidence, including the particulars of the assessee’s bank account in which the alleged deposits were said to have been credited. Consequently, the addition of ₹2.01 crore under Section 69A also could not survive. The assessee’s appeal was allowed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
