Ashishbhai Jashwantbhai Desai HUF Vs ITO (Gujarat High Court)
Gujarat High Court held that reopening of assessment based on borrowed satisfaction without there being any link between information and data available on record is unsustainable in law. Accordingly, notices are liable to be quashed and set aside.
Facts- By this petition Article 226 of the Constitution of India, the petitioners have challenged the notice dated 30th March, 2021 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18.
Notably, the petitioners filed their objections before the respondent-Assessing Officer contending that the petitioners have duly disclosed the transactions carried out for purchase and sale of the shares of Kushal Tradelink Limited in the books of accounts and tax showing the short term capital gain is arising out of such transactions and there is no long term capital gains earned by the HUE during the year under consideration. It was further contended that the Assessing Officer did not form any reason to believe on basis of any specific information relatable to the transactions carried out by the petitioners and in absence of such information of reason to believe, the impugned notices are without jurisdiction.
Conclusion- Held that it is clear that the respondent-Assessing Officer has recorded the reasons only on the basis of the borrowed satisfaction without there being any live-link between the information available on the Insight Portal and the data available on the record of the petitioners-assesses. In such circumstances, the Assessing Officer cannot be said to have formed an independent satisfaction regarding the reasons recorded to re-open the assessment to come to the prima- facie conclusion that there is escapement of income. In view of the foregoing reasons, the petitions succeed and accordingly, allowed. The impugned notices dated 30th March, 2021 are hereby quashed and set aside.
