MS REGENCY AIMS PRIVATE LIMITED,KOLKATA vs. NATIONAL FACELESS ASSESSMENT UNIT, DELHI

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ITA 93/KOL/2024Status: DisposedITAT Kolkata25 November 2024AY 2016-17Bench: SHRI RAJPAL YADAV (Vice President), SHRI RAJESH KUMAR (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was based on 'borrowed satisfaction' as the AO did not conduct independent investigation or application of mind to the information received. The reopening was therefore quashed.

What were the facts?

The Assessing Officer (AO) reopened the assessment of the assessee based on information received from the DDIT (Inv.) regarding suspicious RTGS transactions. The AO treated the amount as an accommodation entry and added it to the assessee's income under Section 68.

What were the issues?

Whether the reopening of assessment under Section 147 was valid when based on 'borrowed satisfaction' without independent application of mind by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 68,Section 144B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Soumitra Choudhury, Shri Pranabesh Sarkar, ARs
For Respondent: Shri Pradip Kumar Biswas, DR
Hearing: 22.10.2024Pronounced: 25.11.2024

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.10.2023 for the AY 2016-17.

2.

At the time of hearing, the ld. Counsel for the assessee pressed the ground no.2 raised in the memorandum of grounds which is extracted below-

“2. For that on the facts and in circumstances of the case and in law reopening of assessment under borrowed satisfaction is bad in law and should be set aside.” 03. The facts in brief are that the assessee filed the return of income during the year on 28.09.2016, declaring nil income. Thereafter, the

4.

In the appellate proceedings, the ld. CIT (A) simply dismissed the appeal in limine upholding the assessment order by noting that the assessee did not file any information/ replies to the notices issued on various dates for furnishing the information/details.

5.

After hearing the rival contentions and perusing the materials available on record, we find that the ld. AO has simply reopened the assessment based on the report of the DDIT (Inv.) without doing any investigation on the information received and without any application of mind. The AO has just stated in the para 3 of the assessment order that on the basis of the information received from the DDIT (Inv.) Wing, it is noted that there was transaction of ₹41,00,211/- in the account of the assessee credited through RTGS from layering of different entities as found during examination in the bank statement of M/s Banka Group and the Paper/shell companies controlled and managed by Sri Mukesh Banka and thereafter, reopened the

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 25.11.2024.

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