“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

All India Chess Federatiion, Chennai vs. ITO Exemptions Ward 1, Chennai

In the result, all the three appeals filed by the assessee are dismissed

ITA 28/CHNY/2023[2015-16]Status: DisposedITAT Chennai10 Jan 2024AY 2015-16

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita Nos.28, 29 & 30/Chny/2023 िनधा;रण वष; /Assessment Years: 2015-16, 2016-17 & 2017-18 All India Chess Federation, The Income Tax Officer Hall No.70, Vs. (Exemptions), Jawaharlal Nehru Stadium, Ward-1, Chennai. Sydenhams Road, Periamet, Chennai – 600 003. [Pan: Aaaaa 2155P]

For Appellant: Shri G. Baskar, AdvocateFor Respondent: Shri R.Clement Ramesh Kumar, CIT

Section 11

order of ITAT has been final. The Ld. AR has submitted that the A.O has reopened the case on the basis of borrowed satisfaction of CCI order and therefore, the reopening is not valid. The Ld. AR has argued that the decision of Hon’ble Supreme Court in the case ... reasons recorded and assessee’s arguments has upheld the reopening of the assessment. The main arguments of assessee has been that reopening was on borrowed satisfaction and there was no tangible material available with A.O. The assessee has argued that the Hon’ble ITAT in earlier years has held

Royal Fortune Business Consultants India Pvt. Ltd., Kolkata vs. ITO, Kolkata

In the result, the appeal of the assessee stands dismissed

ITA 959/KOL/2023[2012-13]Status: DisposedITAT Kolkata09 Jan 2024AY 2012-13

Bench: Shri Sanjay Garg & Rajesh Kumari.T.A No.959/Kol/2023 Assessment Year: 2012-13 Royal Fortune Business Consultants India Pvt. Ltd. ........................……Appellant Flat No.2C, S.P. Block, 1St Floor, Raja Subodh Chandra Mullick Road, Kolkata- 700092. [Pan: Aadcr9408F] Vs. Ito, Ward-10(4), Kolkata......................…................…........……...…..…..Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri B. K. Singh, Jcit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 04, 2024 Date Of Pronouncing The Order : January 09, 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 27.07.2023 Of The National Faceless Appeal Centre (Hereinafter Referred To As The ‘Cit(A)’) Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. No One Has Put In Appearance On The Behalf Of The Assessee Despite Notice. However, On Earlier Date Also I.E. 08.11.2023, The Notice Was Issued To The Assessee But No One Has Put In Appearance & The Case Was Adjourned For Today. It Seems That The Assessee Is Not Interested In Pursuing Its Appeal, Therefore, We Proceed To Adjudicate This Appeal After Hearing The Ld. Dr & After Going Through The Records.

Section 147Section 151Section 250

jurisdiction being barred by limitation. 3. For that the reasons mentioned in the assessment order, the same lack and tangible material and suffers from borrowed satisfaction, therefore the entire proceedings are bad in law and ab initio void. Moreover it appears that before initiation of reassessment proceedings either no approval

Reena Jain, Kolkata vs. ITO, Ward-37(1), Kol, Kolkata

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

ITA 503/KOL/2023[2015-16]Status: DisposedITAT Kolkata09 Jan 2024AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Girish Agrawal]

Section 142(1)Section 147Section 148Section 151Section 68

same were recorded in a mechanical manner without carrying out any enquiry and were in fact based upon the borrowed satisfaction. The ld. AR drew our attention to the copy of reasons recorded at page no. 15 & 16 of the paper book. For the sake of ready reference, the same ... according to ld. AR. We find merit in the contentions of the ld. AR that the AO has recorded the reasons based on the borrowed satisfaction without application of mind and without carrying out any enquiry into case. We also note that assessee filed Schedule-EI which contained the details

M/S. Delighted Holdings (P) Ltd., Kolkata vs. Dcir, Cir-8(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 624/KOL/2023[2011-12]Status: DisposedITAT Kolkata08 Jan 2024AY 2011-12

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 143(1)Section 147Section 148

verified by the AO before re-opening the case of the assessee. Therefore the AO has reopened the assessment on the basis of the borrowed satisfaction and without complying with the necessary pre-requisites and principal conditions to be fulfilled for reopening the assessment. In defense of his arguments ... abundantly clear that there is total non-application of mind by AO to the information received and it is a case of borrowed satisfaction as the AO has reopened the assessment on the basis of borrowed satisfaction. The AO has to record his own objective satisfaction in the reasons

Creative Realmart Pvt. Ltd., Jaipur vs. ITO, Ward-3(5), Jaipur

ITA 599/JPR/2023[2013-14]Status: DisposedITAT Jaipur04 Jan 2024AY 2013-14

For Appellant: Sh. P.C. Parwal (CA)For Respondent: Sh. A.S. Nehra (Addl.CIT)

Section 133ASection 143(1)Section 144Section 147Section 148Section 68

आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “A” JAIPUR श्री संदीप गोसाई, न्यायिक

Narmada Concast Private Limited, Bhavnagar vs. The Dy. Commissioner of Income Tax, Central Circle-1(1), Ahmedabad

In the result, the appeal filed by the Assessee is hereby allowed

ITA 33/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad03 Jan 2024AY 2013-14

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 143(3)Section 148

DCIT transaction affects the balance sheet or profit and loss account of the assessee. Further the reopening is merely based on borrowed satisfaction and there is no to reason believe/independent satisfaction by the Assessing Officer in reopening the above assessment. Further the assessee in its balance sheet under the head ... Assessing Officer before initiating the reassessment proceedings. Thus it is to be held that the reopening of assessment is merely on the basis of “borrowed satisfaction” which is not justified under the law. On merits of the case, the A.O. failed to consider that the above loan was repaid

M/S. Jet Speed Real Tors, Mumbai vs. ACIT Cir 32(1), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 77/MUM/2022[2014-15]Status: DisposedITAT Mumbai03 Jan 2024AY 2014-15

Bench: Shri Amit Shukla, Hon'Ble

Section 131Section 133ASection 143(2)Section 143(3)Section 147Section 148

whether to assess’ or ‘reassess the income of the Appellant 2.4. Without Prejudice, the Reason Recorded for re-opening the assessment is based on borrowed satisfaction and hence not valid in law. 3.0. Without prejudice, the Ld CIT(A) erred in upholding the addition

M/S. Jet Speed Realtors, Mumbai vs. ACIT Cir 32(1), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 109/MUM/2022[2015-16]Status: DisposedITAT Mumbai03 Jan 2024AY 2015-16

Bench: Shri Amit Shukla, Hon'Ble

Section 131Section 133ASection 143(2)Section 143(3)Section 147Section 148

Jet Spped Realators, Mumbai vs. ACIT Cir 32(1), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 108/MUM/2022[2016-17]Status: DisposedITAT Mumbai03 Jan 2024AY 2016-17

Bench: Shri Amit Shukla, Hon'Ble

Section 131Section 133ASection 143(2)Section 143(3)Section 147Section 148

Aditi Enterprises P Ltd, Indore vs. The ACIT, Central Circle-2, Indore

ITA 434/IND/2022[2015-16]Status: DisposedITAT Indore02 Jan 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2015-16 Aditi Enterprises Private Acit, Ltd., Central Circle -2, बनाम/ 264, Indore. Shreenagar Extension, Vs. Indore (Assessee / Appellant) (Revenue / Respondent) Pan: Aacca5139R Assessee By Ms. Shreya Jain & Vibha Tiwari, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.10.2023 Date Of Pronouncement 02.01.2024

Section 143(1)Section 147Section 148Section 151Section 234BSection 234DSection 69C

processed u/s 143(1). The second contention raised by Ld. AR that the AO cannot take action u/s 147 on the basis of ‘borrowed satisfaction’ is also meritless because in the present case, though the AO received information Page 8 of 10 Aditi Enterprises Private Ltd., Indore ITA No.434/Ind/2022

Rameshchandra Bhagwatiprasad Bagadia, Mumbai vs. Income Tax Officer Ward.32(3)(1), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 110/MUM/2023[2009-10]Status: DisposedITAT Mumbai29 Dec 2023AY 2009-10

Bench: The Issue Of Notice U/S.148. The Relevant Grounds Raised By The Assessee Reads As Under:-

Section 139(1)Section 140ASection 143(2)Section 143(3)Section 148Section 151

issue of notice under sec. 148 4. On the facts and circumstances of the case, the Ld AO has erred in placing reliance on (borrowed satisfaction) the report of the DGIT (Inv.), Mumbai only to issue the notice under sec. 148 without making independent enquiry and/or being in possession ... also rejected. 9. In ground No.4, assessee has challenged that AO has relied upon the report of DGIT (Investigation), Mumbai which is a borrowed satisfaction. Here in this case, from the perusal of the reasons it is seen that there was a specific information that assessee has purchased goods from

Shrifal Impex Private Limited, Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 250/SRT/2023[2014-15]Status: DisposedITAT Surat29 Dec 2023AY 2014-15

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita Nos.190 To 191/Srt/2023 Assessment Year: (2011-12 To 2012-13) (Physical Hearing) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent) आयकर अपील सं./Ita No.250/Srt/2023 Assessment Year: (2014-15) Shrifal Impex Private Limited, Vs. The Ito, No.504, 5Th Floor, H. No.6/B/1739- Ward-2(1)(3), 1380, Parshwa Complex Thoba Sheri, Surat Mahidharpura, Surat – 395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaocs4409E (Appellant) (Respondent)

Section 143(3)Section 148

assessee on this issue is dismissed. 7.4 Ground No.3: Issuance of notice u/s.148 of the Act is bad in law on account of borrowed satisfaction and in absence of fresh tangible material: "On the facts and circumstances of the case and in law, the ld. AO erred in issuing ... reasons to ITA Nos. 190 - 191 &250/SRT/2023 Shrifal Impex Pvt. Ltd. believe of escapement of income, on the basis of change of opinion, on borrowed satisfaction and in absence of fresh tangible material, thereby the reassessment order u/s 147 is bad in law." Ground No.4: Issuance of notice

Shrifal Impex Pvt. Ltd., Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 191/SRT/2023[2012-13]Status: DisposedITAT Surat29 Dec 2023AY 2012-13

Section 143(3)Section 148

Shrifal Impex Pvt. Ltd., Surat vs. Income Tax Officer, Ward - 2(1)(3), Surat

ITA 190/SRT/2023[2011-12]Status: DisposedITAT Surat29 Dec 2023AY 2011-12

Section 143(3)Section 148

DCIT-41(4)(1), Mumbai vs. Abdulsattar Suleman Ghaswala, Mumbai

In the result appeal of learned Assessing officer for A

ITA 1658/MUM/2023[2013-14]Status: DisposedITAT Mumbai21 Dec 2023AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Abdulsattar Suleman Dcit-41(4)(1) Ghaswala Room No. 425, 4Th Floor, Kautilya 142/48 Ghaswala Estate Bhavan, Bkc, Bandra(East) Vs. S V Road Jogeshwari(W) Mumbai-400051 Mumbai-400102 (Appellant) (Respondent) Pan No. Aalpg9088R Co No. 83/Mum/2023 (Arising In Ita No. 1658/Mum/2023 For A.Y. 2013-14) Abdulsattar Suleman Ghaswala Dcit-41(4)(1) Room No. 425, 4Th Floor, Kautilya 142/48 Ghaswala Estate S V Road Jogeshwari(W) Bhavan, Bkc, Bandra(East) Vs. Mumbai-400051 Mumbai-400102 (Cross Objector/ Appellant) (Respondent) Pan No. Aalpg9088R

For Appellant: Shri. K. ShivramFor Respondent: Shri. Ajay Chandran, DR

Section 143(3)Section 148

mind before re- initiation of Re-assessment proceedings. 2. The Ld assessing officer has erred in initiating the Re-assessment proceedings merely based on borrowed satisfaction, i.e. based on information stated to have been received from the assessing officer who had completed the assessment of the partnership firm

Rabi Narayan Bastia, Mumbai vs. Commissioner of Income Tax (Appeal)-NFAC, Mumbai

In the result, the appeal by the assessee is allowed

ITA 2115/MUM/2023[2010-2011]Status: DisposedITAT Mumbai20 Dec 2023AY 2010-2011

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Navin GandhiFor Respondent: Smt. Mahita Nair

Section 143(2)Section 143(3)Section 147Section 148Section 250Section 80Section 80G

received from DCIT Central Circle-2(1), Mumbai. The Ld.AO ACIT 20(3) without making any independent inquiry initiated with re-assessment proceedings on borrowed satisfaction. c) The AO neither shared any documents/evidences in its possession nor provided the opportunity to cross examine the concerned person. d) After filing

Jean Antony Sequeira, Mumbai vs. Income Tax Officer-24(2)(2), Mumbai

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

ITA 2009/MUM/2023[2009-2010]Status: DisposedITAT Mumbai18 Dec 2023AY 2009-2010

Bench: Shri Amarjit Singhjean Antony Sequeira Vs. Income Tax Officer - Flat No. 702, 7Th Floor, 24(2)(2), Green Wood, I Wing, 514, 5Th Floor, Piramal Andheri Kurla Road, Chambers, Lal Baugh, Chakala, Andheri (E), Parel, Mumbai – 400 059 Mumbai – 400012 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Abfps0055B Appellant .. Respondent Appellant By : K. Gopal A/W Om Kandalkar Respondent By : Prakash Kishinchandani Date Of Hearing 26.09.2023 Date Of Pronouncement 18.12.2023

For Appellant: K. Gopal a/wFor Respondent: Prakash Kishinchandani

Section 133Section 133ASection 143(1)Section 148

appreciating the fact that the said notice was issued merely on the basis of information received from DGIT (Inv) and the same amounts to borrowed satisfaction. Hence, reopening merely on the basis of borrowed satisfaction is not permissible by law and therefore, the reopening is unlawful, unwarranted and therefore ... Counsel also contended that the reopening of the assessment as bad in law as the assessing officer had reopened the assessment merely on the borrowed satisfaction. The ld. Counsel also referred page no. 53 of the paper book pertaining to reply given by the share broker in response to notice

Provestment Securities P.Ltd, New Delhi vs. ACIT, Circle 20(1), New Delhi

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

ITA 2136/DEL/2023[2011-12]Status: DisposedITAT Delhi06 Dec 2023AY 2011-12

Bench: Shri N.K. Billaiya & Ms. Astha Chandraasstt. Year: 2011-12

For Appellant: NoneFor Respondent: Shri Vivek Vardhan, Sr. DR

Section 143(3)Section 147Section 151Section 68

were made merely on the basis of information received from Assistant Director of Income Tax (Investigation)-Unit-3(3), Delhi i.e. on "borrowed satisfaction" instead of his "own satisfaction" which is contrary to the settled preposition of law. 5. That on the facts and in the circumstances of the case

Globeop Holdings Company (Mauritius ) Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, International Tax-2(3)(2), Mumbai

ITA 2321/MUM/2022[2017-2018]Status: FixedITAT Mumbai24 Nov 2023AY 2017-2018

Bench: Shri Kuldip Singh & Shri S Rifaur Rahmanassessment Year: 2011-12

For Appellant: Shri Reepal Tralshawala, A.RFor Respondent: Shri H.M. Bhatt, D.R

Section 143(3)Section 147Section 69ASection 69C

paid any On-Money to any person d) there is no reason to believe and the reasons recorded are merely based on borrowed satisfaction and that too on wrong and incorrect information; e) there is NO tangible material in possession of the AO and no such material or evidence

M/S Ankur Power Projects Pvt. Ltd., Mumbai vs. ITO 15(1)(1), Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 3291/MUM/2019[2011-12]Status: DisposedITAT Mumbai23 Nov 2023AY 2011-12

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 132Section 132(4)Section 143(1)Section 143(3)Section 148Section 68

escapement of income without making any independent enquiry. Accordingly, the learned AR submitted that that the satisfaction reached by the Assessing Officer is borrowed satisfaction and not its own satisfaction. Further, there was no proper and independent application of mind by the Assessing Officer on this escapement and hence