DCIT Vs Rakesh Ramanlal Shah (Supreme Court of India)
Supreme Court held that reopening of assessment under section 148 of the Income Tax Act for making a fishing inquiry without any live link or fresh material is not permissible under the law. Accordingly, notice u/s. 148 quashed and set aside.
Facts- By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30.03.2021 issued under section 148 of the Income Tax Act,1961.
Conclusion- Held that on the basis of the information received from DDIT Investigation Unit-5(1), New Delhi, the respondent has formed a prima facie belief that there is escapement of income as the petitioner has earned substantial amount of long term capital claiming the same as exemption under section 10(38) of the Act. However, reasons recorded do not disclose any live link or fresh material to connect the transaction entered into by the assessee with the information in possession of the Assessing Officer. Therefore, it is clear that the Assessing Officer has assumed the jurisdiction on the basis of the borrowed satisfaction without there being any live link between the information and the material on record. It is therefore, apparent that the impugned notice under section 148 of the Act is issued for making a fishing inquiry which is not permissible under the law.
