“borrowed satisfaction”

ReassessmentSection 147Section 1471,326 judgments

The decision most relied on for borrowed satisfaction is PCIT v. Meenakshi Overseas Pvt. Ltd. (395 ITR 677), cited in 471 judgments on BharatTax.

Leading authorities on borrowed satisfaction

PCIT v. Meenakshi Overseas Pvt. Ltd.

395 ITR 677 · 2017 · High Court

471

citing judgments

Reassessment proceedings initiated solely based on an investigation wing/appraisal report, without the Assessing Officer's independent application of mind to form a 'reason to believe' that income has escaped assessment, are beyond jurisdiction, bad in law, and void ab initio.

394 ITR 146 (Guj.) 2. Varshaben S. Patel v. ITO

338 ITR 51 · 2011 · High Court

295

citing judgments

Reasons for reopening an assessment must be specific and not vague, scanty, or based on borrowed satisfaction. The Assessing Officer must quantify the escaped income.

222 Taxman 15 (Gujarat)(MAG.), Principal Commissioner of Income-tax-4 v. G & G Pharma India Ltd.

384 ITR 147 · 2016 · High Court

274

citing judgments

An assessment can be reopened if there is tangible material indicating escapement of income, demonstrating a live link between the material and the reasons recorded for reopening. The Assessing Officer must apply their mind to the material facts, and the sanction under section 151 should not be based on borrowed satisfaction.

CIT v. SFIL Stock Broking Ltd.

325 ITR 285 · 2010 · High Court

243

citing judgments

Reassessment proceedings under Section 147 are invalid and void ab initio if initiated based on 'borrowed satisfaction' without the Assessing Officer's independent application of mind, or merely on documents already available on record without fresh tangible material.

Sarthak Securities Co. Pvt. Ltd. v. ITO

329 ITR 110 · 2010 · High Court

217

citing judgments

Reassessment proceedings under Section 147 are invalid if the Assessing Officer records satisfaction based on borrowed satisfaction or information without independently applying their mind and forming their own 'reason to believe' that income has escaped assessment. The AO must arrive at an independent conclusion, not merely act on a report from an investigation wing without due diligence.

ITO v. Selected Dalurband Coal Co. (P.) Ltd.

217 ITR 597 · 1996 · Supreme Court

180

citing judgments

The Assessing Officer's belief that income has escaped assessment, leading to the reopening of an assessment, is a matter of subjective satisfaction. The materials available at the time of forming this belief do not need to conclusively prove the escapement of income.

CIT v. SPL’s Siddhartha Ltd.

345 ITR 223 · 2012 · High Court

164

citing judgments

Reassessment proceedings under Section 147 are invalid if the sanction required under Section 151 is obtained mechanically, without independent application of mind by the sanctioning authority, or is based on borrowed satisfaction.

CIT v. Atul Jain

299 ITR 383 · 2008 · High Court

147

citing judgments

Reassessment proceedings under section 147 are not valid if the information relied upon by the Assessing Officer is vague, scanty, and lacks specific details linking it to the assessee's transactions.

Judgments citing borrowed satisfaction

Shri Salasar Balaji Developers Pvt. Ltd, Jaipur vs. Income Tax Officer, Ward 2(2), Jaipur

In the result, the appeal of the assessee is allowed

ITA 1186/JPR/2024[2012-13]Status: DisposedITAT Jaipur02 Apr 2025AY 2012-13

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. Saurav Harsh, Adv., Ld. ARFor Respondent: Mr. Manoj Kumar, JCIT, Ld. DR

Section 132Section 143(3)Section 148Section 250Section 68Section 69C

invoking of provisions u/s 147/148. As the assessee has stated in point 16 of objections that " this is nothing but a case of " borrowed satisfaction" which renders the entire proceedings of reopening to be illegal and void -ab- initio is". The contention of the assessee that the AO issued notice ... borrowed satisfaction is not acceptable. The department has various sources of information and investigation is one of them, the information received from the Investigation / Central wing was consideration carefully and proper remedial action initiated as per provisions of Income-tax Act after application of mind. 4.8 Accordingly

Anju Daruka, Burdwan vs. ITO, Ward - 3(1), Asansol

In the result, the appeal of the assessee is allowed

ITA 2143/KOL/2024[2013-14]Status: HeardITAT Kolkata01 Apr 2025AY 2013-14

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: S/Shri Somnath Ghosh &For Respondent: Shri Sailen Samadder, DR

Section 04Section 143(1)Section 147Section 148Section 148(2)Section 69A

reproduced information received from the DIT (Investigation), Kolkata and has not carried out any further verification. The Id. AR stated that this is just borrowed satisfaction on the part of the Id. AO without having recorded any reasons for satisfaction to reopen the assessment. The Id. AR stated that ... therefore, the reasons recorded were not sufficient as the AO has not recorded his satisfaction and it is,in fact, a case of borrowed satisfaction. The case of the assessee find support from the decision of CIT Vs. Page |8 ITA No.2143/KOL/2024 Anju Daruka; A.Y. 2013-14 Insecticides (India

Assistant Commissioner of Income Tax, Central Circle-1(2), Kolkata vs. Bellflower Finance Private Limited, Kolkata

In the result, the appeal of the revenue is dismissed and re-opening of assessment is quashed by allowing the issue raised under Rule 27 of ITAT Rules

ITA 2020/KOL/2024[2009-10]Status: DisposedITAT Kolkata01 Apr 2025AY 2009-10

Bench: Shri Rajesh Kumar, Am& Shri Sonjoy Sarma, Jm]

Section 147Section 148Section 250Section 68

available at page 51 of the paper book that the Assessing Officer has not recorded any satisfaction or reasons and merely acted on the borrowed satisfaction. for the sake of brevity and ready reference, we extract the reasons hereinbelow: “Please refer to your letter dated 05/04/2016 wherein you have requested

M/S. Keynesian Financial Services Ltd., Kolkata vs. D.C.I.T., Circle - 7(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 2264/KOL/2024[2013-2014]Status: DisposedITAT Kolkata28 Mar 2025AY 2013-2014

Bench: Shri Rajesh Kumar, Am & Shri Sonjoy Sarma, Jm Dcit, Circle-7(1) M/S Keynesian Financial Aaykar Bhavan, P-7, Services Ltd. 205, Rabindra Sarani, 3 Rd Floor, Chowringhee Square, Vs. Room No.103, Kolkata-700007 Kolkata-700069, West Bengal West Bengal (Appellant) (Respondent) Pan No. Aabck3459M Assessee By : Shri Abhishek Bansal, Ar Revenue By : Shri Sanjay Paul, Dr Date Of Hearing: 23.01.2025 Date Of Pronouncement : 28.03.2025

For Appellant: Shri Abhishek Bansal, ARFor Respondent: Shri Sanjay Paul, DR

Section 143(2)Section 147Section 148Section 148(2)Section 68

issue as raised in ground no.2, which is with regard to invalid reopening of assessment u/s 147 of the Act, on the basis of borrowed satisfaction and without any application of mind by the ld. Assessing Officer. 03. The facts in brief are that the assessee field the return

Mahazarin Feroze Dastoor, Mumbai vs. Income Tax Officer, Mumbai

In the result, the appeal of the assessee is dismissed

ITA 3494/MUM/2024[2014-15]Status: DisposedITAT Mumbai28 Mar 2025AY 2014-15

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No.3494/Mum/2024 (निर्धारण वर्ा / Assessment Year :2014-15) Mahazarin Feroze Dastoor V/S. Ito, Mumbai 2-I Flr, Sion Mansion, बिधम Kautilya Bhavan, Bkc, Sion, Mumbai, Bandra East, Maharashtra-400022 Mumbai-400051 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpd0120C Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी

For Appellant: NoneFor Respondent: Shri. R. R. Makwana

Section 148Section 234Section 250Section 271

assessment u/s 148 and the learned CIT(A), NFAC also erred in confirming the reopening u/s. 148 a only on the basis of borrowed satisfaction without making any inquiry of the said information received b. relying upon information from website c. without any clear nexus between reasons recorded and information

Shri Arun Kumar, Jammu vs. Income Tax Officer Ward-1(1), Jammu

In the result, the appeal of the assessee bearing ITA No

ITA 418/ASR/2024[2017-18]Status: DisposedITAT Amritsar27 Mar 2025AY 2017-18

Bench: Sh. Udayan Das Gupta & Sh. Krinwant Sahayi.T.A. No.418/Asr/2024 Assessment Year: 2017-18

Section 147Section 250Section 69A

addition made of Rs.18,50,000/- by the assessing officer. 3. That this is case which has been reopened on the basis of borrowed satisfaction and there was no independent application of mind of the A.O which is not permissible under the law as such the reopening of the case

Madanraj Hamirmal Shah, Mumbai vs. ITO, Erode

In the result the appeal of the assessee is partly allowed

ITA 1335/CHNY/2024[2012-13]Status: DisposedITAT Chennai26 Mar 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunathaआयकरअपीलसं./Ita Nos.: 1334 & 1335/Chny/2024 िनधा"रणवष" / Assessment Years: 2011-12 & 2012-13 Madanraj Hamirmal Shah Income Tax Officer, C-405, Royal Samrat, Ward -1(2), S.V. Road,Goregoan West, V. Erode. Mumbai – 400 062. [Pan: Adwpm-2343-M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ"कीओरसे/Appellant By : Shri. P.C. Jain, Advocate & Shri. Mohit Bangani, Advocate ""थ"कीओरसे/Respondent By : Shri. P. Vijaideepan, Jcit सुनवाई की तारीख/Date Of Hearing : 11.02.2025 घोषणा की तारीख/Date Of Pronouncement : 26.03.2025

For Appellant: Shri. P.C. Jain, Advocate &For Respondent: Shri. P. Vijaideepan, JCIT

Section 147Section 148

INITIO. Case Law Reference: 1.Hon'ble Gujarat High Court in Shirishbhai Hargovandas Sanjanwala v/s ACIT (2017), 396 ITR (Gujarat) 2. Reassessment Based on Borrowed Satisfaction: The AO initiated reassessment based on information about property purchase without proper "reasons to believe" as required by law. It's argued that ... acted on borrowed satisfaction rather than possessing actual information or evidence of income escapement. Case Law Reference: 1. Hon'ble Bench of ITAT- Chennai in Premlatha Chhajed v/s The Income Tax Officer NCW - 5(4), Chennai (ITA No.2233/Mds/2017) 2.Hon'ble Supreme Court of India in Ganga Saran & sons

Madanraj Hamirmal Shah, Mumbai vs. ITO, Erode

In the result the appeal of the assessee is partly allowed

ITA 1334/CHNY/2024[2011-12]Status: DisposedITAT Chennai26 Mar 2025AY 2011-12

For Appellant: Shri. P.C. Jain, Advocate &For Respondent: Shri. P. Vijaideepan, JCIT

Section 147Section 148

Mahendra Sharma, Jaipur vs. ITO, Ward-3(1), Jaipur

In the result, the appeal of the assessee is allowed

ITA 654/JPR/2023[2011-12]Status: DisposedITAT Jaipur25 Mar 2025AY 2011-12

For Appellant: Shri Sarwan Kumar Gupta, AdvFor Respondent: Shri Anup Singh, Addl.CIT

Section 143(2)Section 143(3)Section 147Section 148Section 151Section 250Section 68

assessment proceedings in this case were only based on presumption/suspicion and were thus not validly initiated. 3. Re-assessment is based on borrowed satisfaction : That the learned Authorities below have grossly erred in law and facts in issuing notice u/s 148 on the basis of AIR information in respect ... assessment proceeding is absolutely bad in law and without jurisdiction and further AO not recorded his satisfaction and re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate reassessment proceedings against the assessee. CIT vs. Shree Rajasthan Syntex

Ambika Tradelink (P) Ltd., Kolkata vs. ITO, WD-4(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 761/KOL/2023[2009-10]Status: DisposedITAT Kolkata25 Mar 2025AY 2009-10

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Ambika Tradelink (P) Ltd. Ito, Wd-4(3), Kolkata C/O. S.N. Ghosh & Associates, Aaykar Bhavan, P-7, Advocates, 2, Garstin Place, 2 Nd Chowringhee Square, 8 Th Floor, Suite No.203, Off Hare Vs. Floor, Kolkata-700069 Street, Kolkata-700001, West Bengal West Bengal (Appellant) (Respondent) Pan No. Aagca2764A Assessee By : Shri Somnath Ghosh, Ar Revenue By : Ms. Monalisha Pal Mukherjee, Dr Date Of Hearing: 13.03.2025 Date Of Pronouncement : 25.03.2025

For Appellant: Shri Somnath Ghosh, ARFor Respondent: Ms. Monalisha Pal Mukherjee, DR

Section 139(1)Section 144Section 147Section 148(2)

squarely covered by the decision of Hon’ble Delhi High court in the CIT vs. Insecticides (India) Ltd. (supra). Further, it is a case borrowed satisfaction and non- application of mind by the ld. AO too. We observe that the ld. AO has simply, after extracting the report from

Income Tax Officer, Chennai vs. Ambattur Constructions Private Limited, Chennai

Appeal stands dismissed

ITA 288/CHNY/2024[2017-18]Status: DisposedITAT Chennai25 Mar 2025AY 2017-18

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.288/Chny/2024 (िनधा*रणवष* / Assessment Year: 2017-18) Ito M/S. Ambattur Constructions Pvt. Ltd. बनाम/ Corporate Ward-1(1) 86E-2, Industrial Estate, Vs. Chennai. Ambattur, Chennai-600 058. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaca-7390-N (अपीलाथ"/Appellant) : (" थ" / Respondent) & 2. Cross Objection No.47/Chny/2024 (In Ita No.288/Chny/2024) (िनधा*रण वष* / Assessment Year: 2017-18) M/S. Ambattur Constructions Pvt. Ltd. Ito (Merged With Ambattur Infra India Pvt. Ltd.) बनाम/ Corporate Ward-1(1), 86E-2, Industrial Estate, Vs. Chennai. Ambattur, Chennai-600 058. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaca-7390-N (Cross-Objector) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Assessee By : Shri T. Banusekar (Advocate) - Ld. Ar " थ"कीओरसे/Revenue By : Smt. D. Babitha (Jcit) - Ld. Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 23-01-2025 घोषणाकीतारीख /Date Of Pronouncement : 25-03-2025

For Appellant: Shri T. Banusekar (Advocate) - Ld. ARFor Respondent: Smt. D. Babitha (JCIT) - Ld. Sr. DR

Section 143(3)Section 147Section 148Section 68

objection. The Ld. AO disagreed with the audit objection but still reopened the case of the assessee. Clearly the satisfaction is nothing but a borrowed satisfaction which is impermissible in law to reopen the case of the assessee. It is settled position of law that the formation of belief

Asst. Commissioner of Incometax, Circle 2(1), Trichy Stationed at Thanjavur, Thanjavur vs. City Union Bank Limited, Kumbakonam

In the result, both the appeals raised by Revenue are

ITA 2877/CHNY/2024[2011-12]Status: DisposedITAT Chennai25 Mar 2025AY 2011-12

Bench: Shri Manu Kumar Giri & Shri Amitabh Shukla

For Appellant: Mr.Shivanand K.Kalakeri, CITFor Respondent: Mr. S.Ananthan,CA &

Section 143(3)Section 14ASection 194ASection 36(1)Section 36(1)(viia)Section 40

Sanjay Sawhney Vs. PCIT (2020) (5) TMI 441 (Del). The learned AR submitted the reopening of assessment is invalid, since reasons recorded is on borrowed satisfaction. In this context, Ld. AR relied on two judgements of the Hon'ble Bombay High Court in the cases of Gandhibag Sahakari Bank

Asst. Commissioner of Income-Tax, Circle 2(1), Trichy Stationed at Thanjavur, Thanjavur vs. City Union Bank Limited, Kumbakonam

In the result, both the appeals raised by Revenue are

ITA 2876/CHNY/2024[2009-10]Status: DisposedITAT Chennai25 Mar 2025AY 2009-10

Bench: Shri Manu Kumar Giri & Shri Amitabh Shukla

For Appellant: Mr.Shivanand K.Kalakeri, CITFor Respondent: Mr. S.Ananthan,CA &

Section 143(3)Section 14ASection 194ASection 36(1)Section 36(1)(viia)Section 40

Dharmil Anil Bodani, Mumbai vs. ACIT, Circle-19(1), Mumbai

In the result, appeal of the assessee is allowed on legal grounds

ITA 648/MUM/2024[2012-13]Status: DisposedITAT Mumbai25 Mar 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(1)Section 143(3)Section 147Section 148Section 68Section 69C

assessee. The assessee has also taken this specific plea before the ld. CIT (A) that, firstly, the reasons recorded is based on borrowed satisfaction; secondly, the notice has been issued based on wrong assumption of facts and incorrect reasons; and lastly, the objections filed by the assessee has not been ... simply referred to the information received from ITO and without applying his mind and verifying the record of the assessee, simply based on borrowed satisfaction has issued the notice without even verifying whether assessee had actually sold shares to the tune of Rs.3,98,17,137/- during the relevant assessment

Seth Badri Prasad Ummedi Devi Paropkari Trust, Jaipur vs. Income Tax Officer (Exemption), Jaipur

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1529/JPR/2024[2011-12]Status: DisposedITAT Jaipur24 Mar 2025AY 2011-12

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Dheeraj Borad, C.AFor Respondent: Shri Gautam Singh Choudhary, JCIT-VH a

Section 12ASection 144Section 148Section 250Section 271(1)(c)

received. In this regard it is submitted that it is a settled position of law that notice u/s. 148 cannot be issued on borrowed satisfaction and accordingly the Id. CIT(A) should have cancelled the notice u/s. 148 as well as the relevant -assessment order because it clearly comes

Alok Kumar Jain, Pearl Pleasure vs. ACIT Cir-6, Jaipur, New Cerntral Revenue Building, Bhagwan Dass Road, Rajasthan

ITA 1191/JPR/2024[2016-17]Status: DisposedITAT Jaipur24 Mar 2025AY 2016-17

Bench: Him.

For Appellant: Sh. Prakul Khurana, Adv. &For Respondent: Mrs. Anita Rinesh, JCIT-Sr. DR

Section 10(38)Section 147Section 148Section 250Section 68Section 69A

surmises. The A.O. had no tangible evidence to initiate the re-assessment proceedings against the petitioner and the impugned action is based sheerly on borrowed satisfaction. Even if it is assumed for argument's sake that the transaction made by the petitioner for acquisition of immovable property at Pali

M/S. Sri. Srinivasa Educational & Charitable Trust, Bangalore vs. Deputy Commissioner of Income-Tax, Central Circle-2(3), Bangalore

In the result, the appeal of the assessee is allowed

ITA 835/BANG/2023[2021-22]Status: DisposedITAT Bangalore24 Mar 2025AY 2021-22

Bench: Shri Waseem Ahmed & Shri Soundararajan Kassessment Years : 2021-22

For Appellant: Shri Vijay Mehta, CA & Shri Mahesh KumarFor Respondent: Shri Jeetendra Kumar, CIT (DR)

Section 12ASection 132Section 143(3)

defined under the explanation to section 12AB(4) of the Act was reached without proper application of mind, and thus, it amounts to 'borrowed satisfaction'. 14. The learned AR further submitted that the second proviso to section 143(3) of the Act, which empowers the AO to make a reference ... seized material forwarded the search authority without applying mind. The AO’s . Page 16 of 16 satisfaction, therefore, appears to be a case of borrowed satisfaction, which is legally unsustainable. 17.8 Considering the legal infirmities in the reference made by the AO, the incorrect application of amended provisions retrospectively

Sarda Energy Limited, Nagpur vs. Income Tax Officer Ward-4(3), Nagpur

In the result, assessee’s appeal stands allowed for statistical purposes

ITA 534/NAG/2024[2017-2018]Status: DisposedITAT Nagpur21 Mar 2025AY 2017-2018

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Nikhilesh BeganiFor Respondent: Shri Abhay Y. Marathe

Section 149Section 151Section 250Section 56

Revenue Audit Party without any independent application of mind by the Ld.JAO hence, the present reassessment proceedings were initiated as a result of borrowed satisfaction which is impermissible and unsustainable in the eyes of law in this regard. (v) That the reopening of the completed assessment suffers from the vice

Mukesh Khurana, Delhi vs. DCIT, ACIT, Cen Cir, Noida

In the result, ground no 5 raised

ITA 3925/DEL/2024[2017-18]Status: HeardITAT Delhi21 Mar 2025AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri S.Rifaur Rahman

For Appellant: Shri Rohit Kapoor, AdvocateFor Respondent: Ms. Baljeet Kaur, CIT DR

Section 147Section 148Section 148ASection 250(6)Section 68

That on the facts and in the circumstances of the case, the CIT(A) has erred in holding that there was no borrowed satisfaction on the part of the Assessing Officer. The CIT(A) failed to appreciate that the reopening under section 148 was initiated solely based on information received ... adjudicated the issues involving grounds | to 3, on the issue of notice issued u/s 147 beyond jurisdiction , notice was issued on the borrowed satisfaction and assessment was completed without satisfying the requirement of section 147 of the Act. Ld CIT(A) has not adjudicated the issuance of notice

Mukesh Khurana, Delhi vs. DCIT, ACIT, Cen Cir, Noida

In the result, ground no 5 raised

ITA 3923/DEL/2024[2016-17]Status: HeardITAT Delhi21 Mar 2025AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri S.Rifaur Rahman

For Appellant: Shri Rohit Kapoor, AdvocateFor Respondent: Ms. Baljeet Kaur, CIT DR

Section 147Section 148Section 148ASection 250(6)Section 68