“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

Ajay Singh, New Delhi vs. ITO, Ward-1(1), Noida

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

ITA 2500/DEL/2022[2012-13]Status: DisposedITAT Delhi07 Jul 2023AY 2012-13

Bench: Shri C.M. Gargajay Singh, Vs. Ito,] C/O. Advocate Kanika Jain, D- Ward-1(1), 80, Lgf, Panchsheel Enclave, Noida New Delhi (Appellant) (Respondent) Pan: Aoops4561G

For Appellant: Ms. Kanika Jain, AdvFor Respondent: Shri Om Parkash, Sr. DR

Section 144Section 147Section 148Section 151Section 69

assessee. 4. The impugned reassessment proceedings are bad in law and liable to be set aside as they are premised on complete borrowed satisfaction without any application of mind. Ajay Singh 5. The impugned reassessment proceedings are bad Included in law and liable to be set aside as they have

K R Packaging (P) Ltd, New Delhi vs. ACIT Circle-5(1), New Delhi

In the result the appeal of the assessee in ITA No

ITA 71/DEL/2021[2003-04]Status: DisposedITAT Delhi07 Jul 2023AY 2003-04

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Shri Om Prakash, Sr. DR

Section 143(2)Section 147Section 148Section 234BSection 68

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

Satyamurti Ramasundar, Gurgaon vs. ACIT Circle-4(1), Gurgaon

In the result, appeal of the assessee is allowed

ITA 371/DEL/2021[2012-13]Status: DisposedITAT Delhi07 Jul 2023AY 2012-13

Bench: Shri Saktijit Dey, Vice- & Shri Girish Agrawalassessment Year: 2012-13 Satyamurti Ramasunder, Acit, D-502, Ivy Complex, Circle 4(1), Vs. Sushant Lok, 1-Blocka, Gurgaon Gurgaon (Haryana). (Pan: Aaapr0741H) (Appellant) (Respondent)

For Appellant: Shri Satyen Sethi & Arta Trana Panda, AdvsFor Respondent: Shri Ram Dhan Meena, Sr. DR

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

cited before us and are convinced on the proposition so made. Resorting to reassessment proceedings at the behest of audit party objection tantamount to borrowed satisfaction on the part of the learned Assessing Officer which is not permissible under the Act. 9. Having discussed and dealt with the aforesaid three

Shrikant Ghanshyam Shah, Mumbai vs. Int. Tax Ward-4(2)(1), Mumbai

ITA 296/MUM/2023[2013-14]Status: DisposedITAT Mumbai04 Jul 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon’Ble & Shri Sandeep Singh Karhail, Hon'Bleshrikant Ghanshyam Shah V. Int. Tax Ward – 4(2)(1) C/O. Ghanshyam T. Shah 17Th Floor, Air India Building D-501-2 Dun Apartment Nariman Point 225/227, J.D. Road Mumbai - 400021 Tardeo Road, Mumbai - 400007 Pan: Bjkps5638A (Appellant) (Respondent) Assessee Represented By : Shri. Bhupendra Shah Department Represented By : Shri Soumendu Kumar Dash

Section 143(2)Section 144C(1)Section 148

learned ITO Int Tax Ward- 4(2)(1), Mumbai erred in reopening the assessment u/s 148 a. Only on the basis of borrowed satisfaction based on the information received from ITO Ward 5(2)(3), Ahmedabad. b. Even though return was not processed us 143(1) as mentioned in Para

Agasthya Auto Products LLP, New Delhi vs. ITO Ward - 38(1), New Delhi

In the result, appeal of the assessee is partly allowed

ITA 1947/DEL/2020[2011-12]Status: DisposedITAT Delhi30 Jun 2023AY 2011-12

Bench: Shri C.M. Gargagasthya Auto Products Llp, Vs. Ito, 15, Godavari Apartments, Ward-38(1), Alaknanda, New Delhi-110019 New Delhi (Appellant) (Respondent) Pan: Abbfa9335N

For Appellant: Ms. Rano Jain, AdcFor Respondent: Shri Sumesh Swani, Sr. DR

Section 147Section 148Section 151Section 68

shows that the AO proceeded to initiate reassessment proceedings and reopening of assessment without having any valid satisfaction and only on the basis of borrowed satisfaction and in absence of independent application of mind to the material received by the AO from the Investigation Wing. The AO could not have ... notice u/s 148 of the Act without having any valid satisfaction and assuming valid jurisdiction, only on the Agasthya Auto Products LLP basis of borrowed satisfaction based on report of investigation wing only and there was no independent application of mind by the AO to the information and documents received

Dinesh Agarwal, Jaipur vs. DCIT Cir-6, Jaipur

ITA 17/JPR/2022[2008-09]Status: DisposedITAT Jaipur30 Jun 2023AY 2008-09

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

For Appellant: Shri Shrawan Kumar Gupta (C.A.)For Respondent: Mrs Monisha Choudhary (Addl.CIT)

Section 147Section 148Section 50C

Agro Products (P.) Ltd. v. Assistant Commissioner of Income Tax (2021) 127 Taxmann.com186 (Gujrat) 3 SHRI DINESH AGARWAL VS DCIT, CIRCLE-6, JAIPUR (ii) Borrowed Satisfaction without applying the mind, Under the law & facts of the case the Ld. AO has grossly erred in reopen the case on the basis ... therefore re-assessment proceeding is absolutely bad in law and without jurisdiction and further AO not recorded his satisfaction re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate re-assessment proceedings against the assessee. CIT Vs. Shree Rajasthan Syntex

Edge Infrabuild Pvt. Ltd., New Delhi vs. DCIT Circle-8(1), New Delhi

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

ITA 5136/DEL/2019[2010-11]Status: DisposedITAT Delhi28 Jun 2023AY 2010-11

Section 143(2)Section 147Section 68

initiated u/s 147/148 of the Act, beyond four years, without fulfillment the mandatory jurisdictional conditions as per law, and in particular, relying on the borrowed satisfaction without any Independent inquiry, without any independent application of mind, based on some investigation wing report, without any tangible material to link the fact

Palm Tracom LLP, New Delhi vs. ITO Ward - 38(1), New Delhi

In the result, appeal of the assessee is partly allowed

ITA 1944/DEL/2020[2011-12]Status: DisposedITAT Delhi27 Jun 2023AY 2011-12

Bench: Shri C.M. Gargpalm Tracom Llp, Vs. Ito, Shop 103, Ff, Deepali Ward-38(1), Chowk, Csc-Ii, Up Samaj, New Delhi Pitampura, New Delhi- 110034 (Appellant) (Respondent) Pan:Aaqfp8495G Assessee By : Ms. Rano Jain, Adv Revenue By: Shri Sumes Swani, Sr. Dr Date Of Hearing 05/04/2023 Date Of Pronouncement 27/06/2023

For Appellant: Ms. Rano Jain, AdvFor Respondent: Shri Sumes Swani, Sr. DR

Section 147Section 148Section 151Section 68

proceeded to initiate reassessment proceedings and reopening of Palm Tracom LLP assessment without having any valid satisfaction and only on the basis of borrowed satisfaction and in absence of independent application of mind to the material received by the AO from the Investigation Wing. The AO could not have valid ... issue notice u/s 148 of the Act without having any valid satisfaction and assuming valid jurisdiction, only on the basis of borrowed satisfaction based on report of investigation wing only and there was no independent application of mind by the AO to the information and documents received from the Investigation

Magpie Marketing LLP, New Delhi vs. ITO Ward - 38(2), New Delhi

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

ITA 1943/DEL/2020[2011-12]Status: DisposedITAT Delhi16 Jun 2023AY 2011-12

For Appellant: Ms. Rano Jain, Adv. & Ms. Mansi Jain, AdvFor Respondent: Shri Sumit Kumar Verma, Sr. DR

Section 147Section 148

income has escaped assessment, the conclusions of the Assessing Officer are at best a reproduction of conclusion in the investigation report which indeed a “borrowed satisfaction”. Their Lordship also held that when the reason fail to demonstrate the link between the tangible material and the formation of the reason

Hgl Builder and Developer, Mumbai vs. ITO 42(1)(2), Mumbai

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

ITA 992/MUM/2023[2013-14]Status: DisposedITAT Mumbai15 Jun 2023AY 2013-14

Bench: Shri Pavan Kumar Gadalehgl Builder & Ito – 42(1)(2), Developer, Kautilya Bhavan, बनाम/ 403, F-Wing, Shree Bkc, Bandra (E) Vs. Ganesh Aangan Bldg: Mumbai – 400051. Thakur Village, Near Thakur College, Kandivali (E), Mumbai. 400101. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaffh9709L (""थ" / Respondent) (अपीलाथ" /Appellant)

For Appellant: Mr. Ajay Singh.ARFor Respondent: Ms. Kavita Kaushik.DR

Section 133(6)Section 143(1)Section 143(2)Section 147Section 148Section 250

there was no independent application of mind by the A.O in fact several discrepancies were noted in the notice itself. It is based on borrowed satisfaction of some other authority; hence the reopening is bad in law and is liable to be quashed. 2. The Learned CIT(A) failed

Saurabh Gupta, New Delhi vs. ITO Ward - 63(5), New Delhi

ITA 4875/DEL/2019[2010-11]Status: DisposedITAT Delhi14 Jun 2023AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Anubhav Sharmaassessment Year: 2010-11

Section 131Section 143(1)Section 147Section 148Section 68

contention of Ld. Counsel of assessee that the reasons as recorded were without application of mind and satisfaction was nothing less than borrowed satisfaction for which it is now settled proposition of law that same are not sustainable for concluding re-assessment. Reliance can be place on the judgements

Mesers S R Ingosts Private Limited, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Raipur

In the result Revised Ground no 4 of the assessee is partly allowed

ITA 4/RPR/2020[2011-12]Status: DisposedITAT Raipur09 Jun 2023AY 2011-12

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.04/Rpr/2020 (Assessment Year: 2011-2012) M/S S R Ingots Pvt. Ltd., Vs Acit, Cc-1, Raipur House No.16, Opp.Cg Gramin Bank, Choubey Colony, Raipur Pan No. :Aaics 5559 D (अपीलाथ" /Appellant) .. (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri Ajoy Kumar Singh & Smt. Surbhi Jain, Ars राज"व क" ओर से /Revenue By : Smt. Ila M. Parmar, Cit-Dr सुनवाई क" तार"ख / Date Of Hearing : 12/04/2023 घोषणा क" तार"ख/Date Of Pronouncement : 09/06/2023 आदेश / O R D E R Per Arun Khodpia, Am :

For Appellant: Shri Ajoy Kumar Singh & Smt. Surbhi JainFor Respondent: Smt. Ila M. Parmar, CIT-DR

Section 132Section 147Section 148Section 153ASection 68

That the Ld. AO erred in the very invocation of section 148 as the reason to believe suffered from factually incorrect/ irrelevant information and borrowed satisfaction while failing the basic test as laid down in several judicial precedence. 5. That the both the lower authorities erred in holding that ... That the Ld. AO erred in the very invocation of section 148 as the reason to believe suffered from factually incorrect/ irrelevant information and borrowed satisfaction while failing the basic test as laid down in several judicial precedence. 18. Ld. AR was on the validity of reopening of the case

Shri Hari Chand, Phillaur vs. Income Tax Officer Ward- 2, Phagwara

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

ITA 722/ASR/2019[2011-12]Status: DisposedITAT Amritsar07 Jun 2023AY 2011-12

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

Section 131Section 143(2)Section 144Section 147Section 148Section 250Section 69A

being re- opening merely on the basis of Cash Deposits is invalid, void- ab initio, bad-in-law and is a borrowed satisfaction. 2. That issue of notice by A.O u/s 148 is bad-in-law being it is without recording any independent satisfaction, application of his own mind ... void abnitio. 4. That sanction of Principal CIT for re-opening u/s 147/148 is mechanical in nature, invalid & bad-in-law and is a borrowed satisfaction. 5. That the Id. A.O and CIT (A) wrongly confirmed addition of cash deposit and denied all the facts, corroborating evidence and explanations

Maxtech Realty Pvt. Ltd(Formerly Known As Nandivardhan Construction Pvt. Ltd, Mumbai vs. DCIT CC-2, Thane

ITA 690/MUM/2022[2009-10]Status: DisposedITAT Mumbai31 May 2023AY 2009-10

Bench: Shri B. R. Baskaran, Am & Shri N. K. Choudhry, Jm

For Appellant: Shri Mani Jain & Shri Prateek JainFor Respondent: Shri Manoj Kumar Sinha, Ld. DR

Section 132Section 139(1)Section 143(3)Section 147Section 148Section 148(2)Section 153(3)Section 153ASection 250

before reopening of the case merely relied on the information received from the Investigation Wing and without corroborating the same, reopened the case on borrowed satisfaction which is not permissible in the eyes of law as well as judicial precedents. Further the reopening of the instant case is not based

Arun I. Keswani, Mumbai vs. ACIT-21(1), Mumbai

In the result, appeal is allowed in favour of the assessee

ITA 727/MUM/2023[2009-10]Status: DisposedITAT Mumbai30 May 2023AY 2009-10

Bench: Pavan Kumar Gadale () & Ms. Padmavathy S. ()

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

Assessing Officer in reopening the assessment under section 147 and making impugned addition of Rs. 8,00,000/- under section 69A merely based on borrowed satisfaction and merely on the basis of surmises & conjectures drawn from un- confronted dumb documents; without any independent application of mind or conducting independent inquiry ... appeal filed by the revenue is dismissed." 6. The Ld.AR accordingly submitted that the Assessing Officer has reopened the assessment purely based on borrowed satisfaction without any sort of independent enquiry into the facts of the case and on alleged information received. Accordingly, the Ld.AR prayed that the addition made

Kl Crescent Infrastructure Pvt Ltd., Navi Mumbai vs. Income Tax Officer-15(2)(1), Mumbai

Appeal is partly allowed

ITA 172/MUM/2023[2010-11]Status: DisposedITAT Mumbai30 May 2023AY 2010-11

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blekl Crescent Infrastructure Pvt Ltd V. Ito 15(2)(1) A-390/39, Ttc Industrial Zone Aayakar Bhavan Midc, Mahape, Post Ghansoli Mumbai- 400020 Navi Mumbai- 400701 Pan: Aadck3832C (Appellant) (Respondent) Kl Crescent Infrastructure Pvt Ltd V. Acit 15(2)(2) A-390/39, Ttc Industrial Zone Aayakar Bhavan Midc, Mahape, Post Ghansoli Mumbai- 400020 Navi Mumbai- 400701 Pan: Aadck3832C (Appellant) (Respondent)

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

passing the order u/s 143(3) r.w.s. 147 and therefore rendering the whole re-assessment bad in law, also on the basis of borrowed satisfaction, presumption and surmises and also erred in disregarding various objections raised in this regard. 2. In the facts and circumstances of the case ... assessment bad in law, also on Page No. | 9 ITA NO. 3242/MUM/2022 (A.Y: 2011-12) KL Crescent Infrastructure Pvt Ltd the basis of borrowed satisfaction, presumption and surmises and also erred in disregarding various objections raised in this regard. 2. In the facts and circumstances of the case

Emvee Shah Real Estates Private Limited (Formerly Known As Emvee Shah Holdings Private Limited), Mumbai vs. DCIT Central Circle- 8(4), Mumbai

In the result, the appeals being ITAs no

ITA 805/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 May 2023AY 2011-12

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri P.J. Pardiwala a/wFor Respondent: Shri Biswanath Das

Section 143(3)Section 147Section 153ASection 2(14)Section 250

erred in upholding the action of the AO in reopening the case of the assessee although the same was on a borrowed satisfaction based upon the report of the investigation wing without independent application of mind; 4. The CIT(A) erred in upholding the action of the AO in taxing