“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

DCIT-Circle-3(3)(1), Mumbai vs. S D Corporation Private Limited, Mumbai

In the result, the appeal of the revenue vide ITA Nos

ITA 6192/MUM/2019[2011-12]Status: DisposedITAT Mumbai30 Aug 2023AY 2011-12

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita Nos.6191 To 6194, 6204 & 6033 /Mum/2019 (A.Ys. 2008-09, 2009-10, 2011-12 To 2014-15)

For Appellant: Mahita NairFor Respondent: Dharmesh Shah &

Section 115JSection 143(3)Section 147

assessing authority. vi. The contention of the assessee that reopening of assessment on the basis of information received from other Assessing Officer tantamount to 'borrowed satisfaction' is not maintainable, as the ITO 25(1)(4) has just passed on information regarding transactions of the assessee with the concems of Shri

DCIT-Circle-3(3) (1), Mumbai vs. S D Corporation Private Ltd, Mumbai

In the result, the appeal of the revenue vide ITA Nos

ITA 6191/MUM/2019[2014-15]Status: DisposedITAT Mumbai30 Aug 2023AY 2014-15

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita Nos.6191 To 6194, 6204 & 6033 /Mum/2019 (A.Ys. 2008-09, 2009-10, 2011-12 To 2014-15)

For Appellant: Mahita NairFor Respondent: Dharmesh Shah &

Section 115JSection 143(3)Section 147

DCIT Circle 3(3)(1), Mumbai vs. S D Corporation Private Limited, Mumbai

In the result, the appeal of the revenue vide ITA Nos

ITA 6033/MUM/2019[2008-09]Status: DisposedITAT Mumbai30 Aug 2023AY 2008-09

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita Nos.6191 To 6194, 6204 & 6033 /Mum/2019 (A.Ys. 2008-09, 2009-10, 2011-12 To 2014-15)

For Appellant: Mahita NairFor Respondent: Dharmesh Shah &

Section 115JSection 143(3)Section 147

Shri Hitesh Jawrilal Jain, Mumbai vs. ITO, Ward-21(1)(4), Mumbai

ITA 1450/MUM/2023[2010-11]Status: DisposedITAT Mumbai29 Aug 2023AY 2010-11

For Appellant: Shri Ketan Vajani, A.RFor Respondent: Shri B. Laxmi Kanth, D.R

Section 143(3)Section 147Section 148

principles of law. 2 M/s. Hitesh Jawrilal Jain (b) The appellant respectfully submits that the reassessment made in its case is made only on borrowed satisfaction of the assessing officer and therefore the same is not justified as per settled principles of law. The appellant also submits that the reassessment ... validity of the reassessment on the ground that the AO has reopened the 4 M/s. Hitesh Jawrilal Jain assessment only on the basis of borrowed satisfaction which is based upon conjectures, surmises and suspicion. 6. The Ld. A.R. for the assessee challenging the validity of reassessment contended inter-alia that

Purna Purshottam Exports, Mumbai vs. ACIT Central Circle, 2(2), Mumbai

In the result, the appeal of the assessee for assessment year

ITA 1618/MUM/2023[2018-2019]Status: DisposedITAT Mumbai28 Aug 2023AY 2018-2019

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2007-08 Purna Pushottam Exports, Ito-32(3)(5), Gala No. 329, Vardhman Mumbai. Vs. Industrial Estate, Behind Petrol Pump, S.V. Road, Dahisar East, Mumbai-400068. Pan No. Aaefp 8085 E Appellant Respondent Assessment Year: 2018-19 Purna Pushottam Exports, Acit Central Circle, 2(2), Gala No. 329, Vardhman Mumbai. Vs. Industrial Estate, Behind Petrol Pump, S.V. Road, Dahisar East, Mumbai-400068. Pan No. Aaefp 8085 E Appellant Respondent

For Appellant: Mr. K. Gopal, Adv. &For Respondent: Mr. H.M. Bhatt, DR

Section 148

failed to appreciate that the A.O. has recorded the reasons on the recorded the reasons on the basis ol borrowed satisfaction. basis ol borrowed satisfaction. The reasons recorded on the basis of a report sent by the The reasons recorded on the basis of a report sent ... wing without making any further enquiry on his investigation wing without making any further enquiry on his own by the AO amounts to a borrowed satisfaction. Thus, the by the AO amounts to a borrowed satisfaction. Thus, the by the AO amounts to a borrowed satisfaction. Thus, the satisfaction that

Purna Purshottam Exports, Mumbai vs. Income Tax Officer 32(2)(5), Mumbai

In the result, the appeal of the assessee for assessment year

ITA 1616/MUM/2023[2007-2008]Status: DisposedITAT Mumbai28 Aug 2023AY 2007-2008

For Appellant: Mr. K. Gopal, Adv. &For Respondent: Mr. H.M. Bhatt, DR

Section 148

Aman Exports International, Jaipur vs. DCIT Circle 1, Jaipur

In the result, appeal of the assessee is partly allowed

ITA 147/JPR/2023[2012-13]Status: DisposedITAT Jaipur24 Aug 2023AY 2012-13

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Tatiwal (CA)For Respondent: Smt. Runi Pal (Addl. CIT) &

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 40A(3)

escaped 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

Falguni Samir Mehta, Mumbai vs. ACIT-19(1), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 1310/MUM/2023[2012-2013]Status: DisposedITAT Mumbai23 Aug 2023AY 2012-2013

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2012-13 Falguni Samir Mehta, Acit-19(1), 303, Mansarovar, Mount Pleasant Room No. 203, 2Nd Floor, Vs. Road, Mumbai-400006. Matru Mandir, Tardeo Road, Mumbai-400007. Pan No. Abeps 6347 K Appellant Respondent

For Appellant: Shri Ajay Gosalia / Isha ShahFor Respondent: Mr. Prakash D Choughule, Sr DR

Section 148Section 69C

PCIT v. Shodiman Investment (P) Ltd. (2018) 167 DTR (Bom) 290, wherein it is held that it is held that reopening on borrowed borrowed satisfaction is not mandate of the law. not mandate of the law. 1310/M/2023 8 Falguni Samir Mehta 7.1 We have heard rival submission of the parties

Balaji Universal Tradelink Pvt. Ltd., Mumbai vs. DCIT - CC- 7(1), Mumbai

In the result, appeal of the assessee is dismissed

ITA 3598/MUM/2018[2009-10]Status: HeardITAT Mumbai22 Aug 2023AY 2009-10

Bench: Shri Vikas Awasthy & Shri Gagan Goyalm/S Balaji Universal Tradelink Pvt. Ltd. 118/120, 3Rd Floor, Ashoka House, Zaveri Bazar, Mumbai-400 002 Pan: Aivpb1665R ...... Appellant Vs. Dcit Cen. Cir. 7(1) Maharashtra, Mumbai ..... Respondent

For Appellant: NoneFor Respondent: Ms. Ketaki Desai, Ld. DR

Section 132(1)Section 143(3)Section 147Section 153ASection 234BSection 250Section 271(1)(c)Section 68

clearly breach of settled position of law that reopening notice has to be issued by the A.O. on his own satisfaction and not on borrowed satisfaction. 4. The Assessment Order u/s.143(3) r.w.s.153A of the Income- tax Act determining total income of the assessee company at Rs.151

DCIT, Central Circle-8, New Delhi vs. Bhaijee Commodities Pvt. Ltd., Delhi

ITA 9133/DEL/2019[2010-11]Status: DisposedITAT Delhi07 Aug 2023AY 2010-11

Bench: Shri Chandra Mohan Garg & Shri Pradip Kumar Kedia

For Appellant: Shri Surinder Mahajan CAFor Respondent: Shri Kanav Bali, Sr.DR

Section 133(6)Section 147Section 148Section 151Section 68

basis of information from investigation wing and there being no independent application of mind, the reopening u/s 147 is merely on the basis of borrowed satisfaction and not sustainable under the law (iii) That information from investigation wing being not in the nature of tangible material, the reasons are merely ... mind and without objectively ascertaining the facts before recording the reasons towards alleged escapement. The assessment has been reopened on the basis of borrowed satisfaction without independent application of mind and thus consequential action and proceedings are illegal and bad in law. On facts, all the commodities transactions mentioned

Bhaijee Commodities Pvt. Ltd., New Delhi vs. ACIT Circle-4(2), New Delhi

ITA 7921/DEL/2019[2010-11]Status: DisposedITAT Delhi07 Aug 2023AY 2010-11

Bench: Shri Chandra Mohan Garg & Shri Pradip Kumar Kedia

For Appellant: Shri Surinder Mahajan CAFor Respondent: Shri Kanav Bali, Sr.DR

Section 133(6)Section 147Section 148Section 151Section 68

Major Suresh Yadav(Retd.), New Delhi vs. ITO Ward-24(3), New Delhi

In the result, the appeal of the assessee is allowed

ITA 9432/DEL/2019[2003-04]Status: DisposedITAT Delhi31 Jul 2023AY 2003-04

Bench: Shri Kul Bharat[Assessment Year : 2003-04] Major Suresh Yadav (Retd.), Vs Ito, Farm No.36, Dera Mandi Road, Ward-24(3), Mandi Gaon, Near Chattarpur, New Delhi. New Delhi-110030. Pan-Aaupy5153C Appellant Respondent Appellant By Shri Mukesh Kohli, Ca Respondent By Shri Om Parkash, Sr. Dr Date Of Hearing 28.06.2023 Date Of Pronouncement 31.07.2023

Section 143(2)Section 147Section 148Section 234A

That the CIT(A) as well as A.O has erred on facts and under the law because the A.O. has issued reassessment notice on borrowed satisfaction whereas it has to be on his own satisfaction. 4. That the order passed by A.O. and confirmed by the CIT(A) is illegal ... belief that the income has been escaped. The re- assessment notice has to be issued by A.O. by his own satisfaction and not on borrowed satisfaction. In our case A.O. has not issued re- assessment notice on his satisfaction. We rely upon the following court judgments. PCIT VS Shodiman Investment

Jayton Trading Pvt. Ltd., Kolkata vs. Dy. Commissioner of Income Tax (Central)-2, Raipur

In the result, appeal of the assessee is allowed

ITA 65/RPR/2021[2012-13]Status: DisposedITAT Raipur31 Jul 2023AY 2012-13

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.65/Rpr/2021 (Assessment Year: 2012-2013) Jayton Trading Private Limited, Vs Dcit (Central)-2, Raipur 15, Crooked Lane, 1St Floor, Hare Street, Kolkata Pan No. :Aaacj 6659 B (अपीलाथ" /Appellant) .. (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri Jehangir D. Mistry, Sr. Advocate, Shri Madhur Agrawal, Advocate Shri Praveen Khandelwal & Praveen Goyal, Cas राज"व क" ओर से /Revenue By : Smt. Ila M. Parmar, Cit-Dr सुनवाई क" तार"ख / Date Of Hearing : 29/05/2023 घोषणा क" तार"ख/Date Of Pronouncement : 31 /07/2023 आदेश / O R D E R Per Arun Khodpia, Am : The Assessee Has Filed This Appeal Against The Order Passed By The Cit(A)-3, Bhopal, Dated 06.07.2021 For The Assessment Year 2012-2013, On The Following Grounds :- 1. That On The Facts & In The Circumstances Of The Case & In Law, The Order Dated 06/07/2021 Passed U/S 250 Of The Act & The Assessment Order Passed U/S 144 R.W.S. 147 Of The Act Dated 30/12/2019 Are Illegal & Void Ab Initio. 2. That On The Facts & In The Circumstances Of The Case & In Law, The First Appellate Authority Erred In Not Confirming That The Notice Issued U/S 148 Of The Act Dated 28/03/2019 Is Bad In Law. 2.1 That On The Facts & In The Circumstances Of The Case & In Law, The First Appellate Authority Erred In Not Holding That The Notice Issued U/S 148 Of The Act Dated 28/03/2019 Is Time Barred By Limitation In View Of First Proviso To Section 147 Of The Act. 2.2 That On The Facts & In The Circumstances Of The Case & In Law, The First Appellate Authority Erred In Confirming The Reason Recorded U/S 148(2) Of The Act Though The Same Is Only A Change Of Opinion On Account Of Borrowed Satisfaction Without Application Of Mind By The Assessing Officer.

For Appellant: Shri Jehangir D. Mistry, Sr. AdvocateFor Respondent: Smt. Ila M. Parmar, CIT-DR

Section 143(3)Section 144Section 147Section 148Section 148(2)Section 250Section 68

erred in confirming the reason recorded u/s 148(2) of the Act though the same is only a change of opinion on account of borrowed satisfaction without application of mind by the assessing officer. 2 2.3 That on the facts and in the circumstances of the case

Executive Trading Co. Pvt Ltd., Ahmedabad vs. Comm of Income Tax (A), NFAC, Delhi

ITA 281/MUM/2023[2017-18]Status: DisposedITAT Mumbai27 Jul 2023AY 2017-18

For Appellant: Shri Vijay MehtaFor Respondent: Shri Biswanath Das

Section 142(1)Section 144BSection 147Section 148Section 69C

fulfilled in the facts and circumstances of the present case. The reassessment proceedings have been initiated on account of borrowed satisfaction without proper application of mind. Further, copy of the reasons recorded for reopening assessment was provided to the Appellant on 27.09.2021 just two days before the passing

R Vaidyanathan, Mumbai vs. ACIT-27(3), Navi Mumbai

ITA 1443/MUM/2023[2009-10]Status: DisposedITAT Mumbai26 Jul 2023AY 2009-10

For Appellant: Shri. M.M.Golvala , A.R. &For Respondent: Shri. B. Laxmi Kanth, D.R

Section 114GSection 143(3)Section 147

material and the belief that income chargeable to tax had escaped assessment. 6) Both the lower authorities erred in resorting to reassessment proceedings on borrowed satisfaction. 7) Both the lower authorities erred in not granting cross examination to the Appellant. 8) Both the lower authorities erred in resorting

Shri Arnesh Kumar Shakar Ex. Mla, Hoshiarpur vs. Income Tax Officer Ward, Dasuya

In the result, appeal of the assessee ITA No

ITA 6/ASR/2021[2010-11]Status: DisposedITAT Amritsar26 Jul 2023AY 2010-11

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 143(3)Section 147Section 148Section 250Section 54Section 54F

Further, the ld. AR vehemently argued and placed that the ld. AO has not verified the issue before reopening. Only on mere borrowed satisfaction and direction of ld. CIT(A), the assessment was reopened. The issue was agitated before the ld. CIT(A) and the ld. CIT(A) has rejected

ACIT, Central Circle- 4, New Delhi vs. Sanjay Duggal, Faridabad

ITA 3532/DEL/2018[2009-10]Status: DisposedITAT Delhi20 Jul 2023AY 2009-10

Bench: Or During The Course Of Hearing Of The Appeal.”

For Appellant: “1. The

Section 132Section 143(2)Section 147Section 148Section 153ASection 68

erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that "rubber stamp" reasons in present case are based on borrowed satisfaction and are without independent application of mind; 1.2 That on the facts and in the circumstances of the case

Narendra Kumar, New Delhi vs. ITO, Ward- 44(2), New Delhi

In the result, Ground No. 1 of the assessee is allowed

ITA 1218/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

For Appellant: & Sh. Anchit Jain, CAFor Respondent: Sh. Arvind Kumar Bansal

Section 132Section 132(4)Section 147Section 148Section 153CSection 68

invalid and illegal as the reasons recorded do not reflect any satisfaction of the Assessing Officer regarding escapement of income but are based upon borrowed satisfaction of the Investigation Wing of the department. That the Learned CIT(A), failed to acknowledge that nothing has been done

DCIT, CC- 28, New Delhi vs. Saarthak Vanijya India Ltd., Kolkata

ITA 3822/DEL/2017[2007-08]Status: DisposedITAT Delhi11 Jul 2023AY 2007-08

Bench: Shamim Yahya & Shri Anubhav Sharmaआ.अ.संसंसंसं/.I.T.A No.3822/Del/2017 िनधा"रणवष" िनधा"रणवष"/Assessment Year: 2007-08 िनधा"रणवष" िनधा"रणवष"

Section 148Section 68

from investigation wing and in absence of independent application of mind or investigation, the re-opening u/s 148 is wholly on the basis of borrowed satisfaction. (iii) That addition made on the basis of information from investigation wing per se does not constitute tangible material and in absence ... made basis for additions. He submitted that I.T.A.No.3822/Del/2017 & CO No. 70/Del/2020 the statement alone was the basis of reopening and be a borrowed satisfaction same could not have been relied. 7. Giving thoughtful consideration in the matter on record, it can be observed that admittedly the date of search

Agroha Fincap Ltd., New Delhi vs. ITO, Ward-1(4), New Delhi

In the result, appeal of the assessee is partly allowed

ITA 2859/DEL/2022[2009-10]Status: DisposedITAT Delhi07 Jul 2023AY 2009-10

Bench: Shri C.M. Gargagroha Fincap Ltd, Vs. Ito, C-51, Mahendru Enclave Gt Ward-1(4), Karnal Road, New Delhi New Delhi (Appellant) (Respondent) Pan:Aaaca8075G

For Appellant: Shri Raj Kumar Gupta, CAFor Respondent: Shri Om Parkash, Sr. DR

Section 147Section 151Section 68

raised the following grounds of appeal:- “1. That under the facts and circumstances initiation of proceedings under section 147/148 are without jurisdiction, on borrowed satisfaction, without application of mind, unwarranted. mechanical and unsustainable in law and on merits. 2. That the Ld. A.O., since failed in adjudicating all objections against ... mechanical manner without due application of mind. He submitted that the reassessment proceedings were not initiated in a mechanical manner or on borrowed satisfaction and without application of mind since the perusal of the reasons recorded clearly show that there is a thorough application of mind by the Assessing Officer