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“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

M/S. Harivardhan Steel & Alloys, Thane vs. ITO-2(1), Thane

In the result, the appeal is allowed in aforesaid terms

ITA 4195/MUM/2023[2013-14]Status: DisposedITAT Mumbai25 Jun 2024AY 2013-14

Bench: Shri Pavan Kumar Gadale & Shri Ratnesh Nandan Sahay

Section 143(3)Section 148Section 250Section 46ASection 68

from the Investigation wing only without application of mind and analysing the basic facts of the case. The notice issued on the basis of borrowed satisfaction is illegal and void and consequently, assessment based on such notice may kindly be quashed. 1.1. That the Ld. CIT(A) has also erred

Suva Lal Paharia, Jaipur vs. ITO Ward 6(3), Jaipur

ITA 157/JPR/2024[2008-09]Status: DisposedITAT Jaipur24 Jun 2024AY 2008-09
For Appellant: Sh. Shrawan Kumar Gupta (Adv.) &For Respondent: Smt. Monisha Chaudhary (Addl.CIT)
Section 144Section 147Section 5

आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR श्री मनीष बोराड, लेखा

DCIT-3(4), Mumbai vs. M/S. Tata Motors Limited, Mumbai

In the result, the appeal filed by the Revenue is dismissed and the Cross Objection filed by the assessee is allowed except the issue relating to reopening, which is treated as academic

ITA 1977/MUM/2023[2003-04]Status: DisposedITAT Mumbai21 Jun 2024AY 2003-04

Bench: Shri Amit Shukla, Jm & Shri Ratnesh Nandan Sahay, Am

For Appellant: S/Shri Rajan Vora, Nikhil Tiwari & Mihir ChitaliaFor Respondent: Shri Biswanath Das, CIT-DR
Section 115Section 115JSection 143(3)Section 147

opinion are bad in law and liable to be quashed; 13. ought to have appreciated that reassessment proceedings based on audit objections based on borrowed satisfaction is bad in law and liable to be quashed; 6 ITA No.1977 & CO 79/Mum/2023 (AY 2003-04) M/s.Tata Mortors Limited. 14. ought to have

Indu Mahendra Shah (L/H of Late Shri Mahendra G. Shah), Mumbai vs. ACIT, Circle-20(2), Mumbai

Appeal are dismissed as being infructuous

ITA 856/MUM/2024[2011-12]Status: DisposedITAT Mumbai20 Jun 2024AY 2011-12

Bench: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Devendra JainFor Respondent: Shri H.M. Bhatt
Section 10(38)Section 143(3)Section 147Section 148Section 151Section 68Section 69C

Learned CIT(A) has erred in upholding the action of the Ld. Assessing Officer of issuing notice u/s 148 on borrowed satisfaction merely relying on the basis of alleged information received without any independent application of mind thereon. 6. In the facts and circumstances of the case

Manak Chand Daga, Faridabad vs. ITO, Ward-1(3), Faridabad

In the result, the appeal filed by the assessee for Assessment

ITA 17/DEL/2024[2014-15]Status: DisposedITAT Delhi14 Jun 2024AY 2014-15
Section 143(2)Section 147Section 148

facts and in law in confirming the reopening despite the fact that the same has been made by the AO on the basis of borrowed satisfaction without independent application of mind. Manak Chand Daga vs. ITO 6. On the facts and circumstances of the case, the learned

Manak Chand Daga, Faridabad vs. ITO, Ward-1(3), Faridabad

In the result, the appeal filed by the assessee for Assessment

ITA 16/DEL/2024[2013-14]Status: DisposedITAT Delhi14 Jun 2024AY 2013-14

Bench: the Ld. CIT(A) and filed the detailed submissions before him with grounds of appeal. In the appellate proceedings, the assessee has not complied to the various notices for hearing issued by the Ld. CIT(A), since, no representation was forthcoming from the assessee side, the Ld. CIT(A) decided the issue based on the information available on record. Accordingly, he sustained the addition made by the Assessing Officer.

Section 143(2)Section 147Section 148

facts and in law in confirming the reopening despite the fact that the same has been made by the AO on the basis of borrowed satisfaction without independent application of mind. Manak Chand Daga vs. ITO 6. On the facts and circumstances of the case, the learned

K & P Enterprises, Mumbai vs. Deputy Commissioner of Income Tax 22(1), Mumbai

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1318/MUM/2024[2008-09]Status: DisposedITAT Mumbai12 Jun 2024AY 2008-09

Bench: Shri Pavan Kumar Gadale & Shri Ratnesh Nandan Sahayi T A. No. 1318, 1319 & 1320/Mum/2024 (A.Y. 2008-09, 2009-10 & 2013-14)

Section 143(3)Section 234ASection 271(1)(c)

order u/s 143(3) r.w.s 147 and therefore rendering the whole re-assessment bad in law, that too a) Only on the basis of borrowed satisfaction, presumption and surmises. b) Recording reasons for reopening only on the basis of information received from the DGIT [investigation] 3) In the facts

Gagan Preet Kaur Virdi, Lucknow vs. ITO-6(2), Lucknow-New

In the result, the appeal is partly allowed for statistical purposes and the Stay Application is dismissed as infructuous

ITA 290/LKW/2024[2016-17]Status: DisposedITAT Lucknow11 Jun 2024AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 131Section 142Section 147Section 151Section 69A

illegal, bad in law and null and void. 1.2 BECAUSE reason to believe in pursuance of which the assessment was reopened is based on borrowed satisfaction without independent application of mind by the Assessing Officer to the information received from the Investigation Wing, consequently the ld. "CIT(A)" should have

Bhootnath Vintrade Pvt. Ltd., Delhi vs. ITO, Ward-12(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 189/KOL/2024[2009-10]Status: DisposedITAT Kolkata11 Jun 2024AY 2009-10

Bench: Dr. Manish Borad & Shri Sonjoy Sarma]

Section 147Section 148Section 14ASection 151Section 234Section 250Section 68

reassessment order be quashed. 7. For that the reopening of assessment u/s 148 of the Income Tax Act 1961 was on borrowed satisfaction and not on any independent application of mind by the assessing officer and hence the reopening be declared to be bad in law and the reassessment order

Harisons Steel Limited, Wada Thane vs. Dy CIT 12(2)(2), Mumbai

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

ITA 3957/MUM/2023[2013-14]Status: DisposedITAT Mumbai10 Jun 2024AY 2013-14

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Mani JainFor Respondent: Biswanath Das
Section 143(3)Section 147Section 148

breach of settled position in law that re- opening notice has to be issued by Assessing Officer on his own satisfaction and not on borrowed satisfaction.” The Hon’ble jurisdictional High Court of Bombay in the case of Pr.CIT Vs. Shodiman Investment Pvt. Ltd. (2018) 93 taxman.com 153 (Bom) held ... that reopening notice has to be issued by the assessing officer on his own satisfaction not on borrowed satisfaction. In that case the assessing officer has reopened the assessment on the basis that information has been received from the search action conducted u/s 132 of the Act in the case

Harisons Steel Ltd, Wada Thane vs. DCIT 12(2)(2), Mumbai

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

ITA 3943/MUM/2023[AY 2011-12]Status: DisposedITAT Mumbai10 Jun 2024

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Mani JainFor Respondent: Biswanath Das
Section 143(3)Section 147Section 148

breach of settled position in law that re- opening notice has to be issued by Assessing Officer on his own satisfaction and not on borrowed satisfaction.” The Hon’ble jurisdictional High Court of Bombay in the case of Pr.CIT Vs. Shodiman Investment Pvt. Ltd. (2018) 93 taxman.com 153 (Bom) held ... that reopening notice has to be issued by the assessing officer on his own satisfaction not on borrowed satisfaction. In that case the assessing officer has reopened the assessment on the basis that information has been received from the search action conducted u/s 132 of the Act in the case

Gobind Chhangomal Sajnani, Jaipur vs. Income Tax Officer, Jaipur

In the result, both the appeal of the assessee are allowed for

ITA 185/JPR/2022[2009-10]Status: DisposedITAT Jaipur05 Jun 2024AY 2009-10
For Respondent: Sh. Vedant Agrawal (CA)
Section 144Section 147Section 148Section 253Section 271(1)(c)

proved. 5. On the facts and circumstances of the case and in law, the Ld. AO grossly erred in initiating reassessment proceedings on the borrowed satisfaction and without applying his independent mind. 6. On the facts and circumstances of the case Ld. CIT (A) grossly erred in rejecting appeal

Gobind Chhangomal Sajnani, Jaipur vs. Income Tax Officer, Ward-1(1), Jaipur

In the result, both the appeal of the assessee are allowed for

ITA 184/JPR/2022[2009-10]Status: DisposedITAT Jaipur05 Jun 2024AY 2009-10

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. Vedant Agrawal (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT)
Section 144Section 147Section 148Section 253Section 271(1)(c)

proved. 5. On the facts and circumstances of the case and in law, the Ld. AO grossly erred in initiating reassessment proceedings on the borrowed satisfaction and without applying his independent mind. 6. On the facts and circumstances of the case Ld. CIT (A) grossly erred in rejecting appeal

Nisha Goel, Delhi vs. Income Tax Officer, Ward 52(3), Ward

In the result, appeal of the assessee is partly allowed as

ITA 2767/DEL/2023[2012-13]Status: DisposedITAT Delhi04 Jun 2024AY 2012-13

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasadिनधा"रणवष"/Assessment Year: 2012-13

Section 144Section 147Section 151

ITAA.No.2767/Del/2023 assessment. The conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a 'borrowed satisfaction'. The reasons fail to demonstrate the link between the tangible material and the formation of the reason to believe that income has escaped assessment ... reasons were, in fact, in the form of conclusions “one after the other” and that the satisfaction arrived at by the AO was a “borrowed satisfaction” and at best “a reproduction of the conclusion in the investigation report.” 13. As in the above case, even in the present case

Syed Gulam Mohiuddin, Hyderabad vs. ITO, International Taxation-1, Hyderabad

In the result, appeal filed by the assessee is allowed

ITA 136/HYD/2023[2017-18]Status: DisposedITAT Hyderabad03 Jun 2024AY 2017-18

Bench: Shri Mahavir Singh, Vice- & Shri Manjunatha, G.आ.अपी.सं /Ita No.136/Hyd/2023 (िनधा"रण वष"/Assessment Year: 2017-18) Shri Syed Gulam Vs. Income Tax Officer Mohiuddin (International Taxation)-1 Hyderabad Hyderabad Pan:Decpm0365H (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri P Murali Mohan Rao, Ca राज" व "ारा/Revenue By:: Shri Shiva Sewak, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 16/05/2024 घोषणा की तारीख/Pronouncement: 03/06/2024 आदेश/Order Per Manjunatha, G. A.M This Appeal Filed By The Assessee Is Directed Against The Assessment Order Dated 12.01.2023 Of The Learned Assessing Officer (International Taxation-1), Hyderabad, Relating To A.Y.2017-18. 2. The Grounds Raised By The Assessee Read As Under: “1. The Final Assessment Order Passed By The Income Tax Officer (Int Taxn)-1,Hyd (Herein After Referred To As 'Ao) Is Erroneous Both On Facts & In Law To The Extent The Order Is Prejudicial To The Interest Of The Appellant.

For Appellant: Shri P Murali Mohan Rao, CAFor Respondent: : Shri Shiva Sewak, CIT(DR)
Section 147Section 148Section 148(2)Section 151Section 69

erred in reopening the assessment u/s 147 of the Act and issuing notice u/s 148 of the Act on the basis of a borrowed satisfaction which is incorrect and unjustified. 7. The Ld. A.O erred in not applying his independent mind and has not made any proper inquiry and reopened

S Chirag and Co, Mumbai vs. Income Tax Officer 19 (3) (1), Mumbai

In the result, the appeal of assessee is allowed

ITA 607/MUM/2024[2011-12]Status: DisposedITAT Mumbai31 May 2024AY 2011-12

Bench: Shri Pavan Kumar Gadale & Shri Girish Agrawalassessment Year: 2011-12

For Appellant: Shri Anant Pai, CAFor Respondent: Ms. Rajeshwari Menon, Sr.DR
Section 143(3)Section 147

learned Commissioner (Appeals) erred in sustaining the re-opening action of the learned Assessing Officer u/s 147, which was based on a 'borrowed satisfaction' and not supported by own reasons to believe that income chargeable to tax has escaped assessment in hands of the Appellant. The re-opening action

Brentford Merchants Pvt. Ltd., Kolkata vs. ACIT(OSD), Ward-1(4), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 452/KOL/2024[2010-11]Status: DisposedITAT Kolkata30 May 2024AY 2010-11

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A. No.452/Kol/2024 Assessment Year: 2010-11 Brentford Merchants Pvt. Ltd...…..………...........…...……………....Appellant C/O Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata – 700069. [Pan: Aabcb2698B] Vs. Acit(Osd), Ward-1(4), Kolkata…......................................…..…..... Respondent Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Appellant. Shri Prabhakar Prakash Ranjan, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : May 21, 2024 Date Of Pronouncing The Order : May 30, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 13.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. 1. For That The Ld. Cit(A) Was Not Justified In Upholding The Validity Of Re-Opening Proceedings U/S 147/144 Which Is Bad In Law & Is Liable To Be Quashed. 2. For That The Ld. Cit(A) Was Not Justified In Upholding The Re-Opening Proceedings In Spite Of The Fact That The Reasons To Believe Were Invalid & Improper Thereby, Vitiating The Reopening Proceedings.

Section 147Section 151Section 250Section 68

escaped assessment and further that the satisfaction arrived by the Assessing Officer in forming the belief of the escapement of income was based on borrowed satisfaction. Secondly, even on merits, there is nothing on record that the assessee has received any such amount as alleged by the Assessing Officer. That ... belief of escapement of income of the assessee. The reopening of the assessment has been made by the Assessing Officer on the basis of borrowed satisfaction. It has been held time and again by the various High Courts that the reasons to believe regarding the escapement of the income should

Chinmay Impex Private Limited, Ahmedabad vs. The Income Tax Officer, Ward-1(1)(3), Ahmedabad

In the result, the appeal filed by the assessee is partly allowed for the statistical purposes

ITA 1111/AHD/2023[2015-16]Status: DisposedITAT Ahmedabad29 May 2024AY 2015-16

Bench: The Tribunal. After Contacting The Present Chartered Accountant, The Chinmay Impex Vs. Ito Asst.Year 2015-16 2 Assessee Company Filed The Appeal With A Delay Of 35 Days & Requested To Condone The Same.

Section 143Section 148Section 151Section 68

erred in law and on facts in upholding validity of reopening of assessment though Reopening of assessment is on borrowed satisfaction and without independent application of mind. 4. The Ld. CIT (A) has erred in law and on facts in upholding validity of reopening of assessment though

Tulshi Dealtrade Pvt. Ltd., Howrah vs. ITO, WD-11(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 776/KOL/2023[2012-13]Status: DisposedITAT Kolkata28 May 2024AY 2012-13

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

Section 143(1)Section 143(3)Section 147Section 148Section 148(2)Section 151

information received and has merely acted on the information as received then that amounts to the recording the reasons on the basis of borrowed satisfaction as the AO has not recorded his own objective satisfaction in the reasons for the formation of belief. The statute has made very clear that

Sunita Tyagi, Ghaziabad vs. ITO Ward 2(2)(3), Ghaziabad

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

ITA 3775/DEL/2023[2012-13]Status: DisposedITAT Delhi28 May 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia[Assessment Year : 2012-13] Sunita Tyagi, Vs Ito, R-7/120, Raj Nagar, Ward-2(2)(3), Ghaziabad, Ghaziabad. Uttar Pradesh-201002. Pan-Aaupt3785H Appellant Respondent Appellant By Shri Sahil Sharma, Adv & Shri Sanjay Parashar, Adv. Respondent By Shri Gurpreet Singh, Sr. Dr Date Of Hearing 16.05.2024 Date Of Pronouncement 28.05.2024 Order Per Kul Bharat, Jm The Present Appeal Filed By The Assessee Is Directed Against The Order Passed By Ld. Cit(A), National Faceless Appeal Centre (“Nfac”), Delhi Dated 30.11.2023 For The Assessment Year 2012-13. The Assessee Has Raised Following Grounds Of Appeal:-

Section 133(6)Section 144Section 148Section 151

facts and circumstances of the case and in law, that reasons to believe are based on sole reliance on the AIR information under borrowed satisfaction, and based upon incorrect factual context without any independent examination/satisfaction by the Ld. A.O., rendering the income escaping assessment proceedings legally void