Krunalkumar Virambhai Desai Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad Quashes Reassessment Based on ACB Information; Borrowed Satisfaction and Vague Reasons Vitiate Jurisdiction
The Ahmedabad Bench of the ITAT allowed the assessee’s appeal for AY 2014-15 and quashed the reassessment framed under section 147 read with section 144B on the ground of invalid assumption of jurisdiction. The reopening was initiated solely on the basis of information received from the Anti-Corruption Bureau (ACB) regarding alleged disproportionate assets of the assessee’s father, a public servant, in which the assessee was named as a family member.
The Tribunal examined the reasons recorded for reopening and found them to be vague and mechanical, merely reproducing the ACB’s allegations without identifying what specific income of the assessee had escaped assessment, the nature of the alleged disproportionate assets, or the particular property or transactions said to have been undertaken by the assessee. No independent inquiry or verification was carried out by the Assessing Officer, nor was there any application of mind to correlate the information with the assessee’s income.
Relying on a coordinate bench decision in an identical case of a family member (Arpanbhai Vikrambhai Desai) and settled jurisprudence that reopening must be based on the AO’s own reasoned belief and not on borrowed satisfaction, the ITAT held that the statutory precondition for invoking section 147 was not met. The Tribunal observed that if disproportionate assets were alleged to belong to the father, proceedings, if any, ought to have been initiated in his case and not mechanically extended to family members.
Accordingly, the reassessment order was held to be void ab initio and was quashed without examining the additions on merits. The appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
