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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

Kanhaiya Lal Hari Narayan, Neem Ka Thana vs. Income Tax Officer, Ward Neem Ka Thana, Neem Ka Thana

The appeal of the assessee is allowed in above terms

ITA 1034/JPR/2025[2013-14]Status: DisposedITAT Jaipur31 Dec 2025AY 2013-14

Bench: SMT. ANNAPURNA GUPTA (Accountant Member)

For Appellant: Sh. Vedant Gupta, AdvocateFor Respondent: Sh. Gautam Singh Choudhary
Section 144Section 147Section 250

proved. 7. 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. 8. Alternatively, additions of entire purchases amount is also illegal and bad in law. 9) That the appellant

Shree Krishna Gyanodaya Flour Mills Pvt. Ltd., Kolkata vs. ACIT, Central Circle 4(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 2179/KOL/2025[2011-2012]Status: DisposedITAT Kolkata31 Dec 2025AY 2011-2012

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Shree Krishna Gyanodaya Acit, Central Circle 4(3) Flour Mills Pvt. Ltd. Aaykar Bhawan Poorva 15Th Floor, 46C, Chowringhee 110, Kolkata-700107, Vs. Road, Everest House, Kolkata- West Bengal 700071, West Bengal (Appellant) (Respondent) Pan No. Aahcs8774P Assessee By : Shri S.K. Tulsiyan, Ar Revenue By : Shri Sanat Kumar Raha, Dr Date Of Hearing: 01.12.2025 Date Of Pronouncement: 31.12.2025

For Appellant: Shri S.K. Tulsiyan, ARFor Respondent: Shri Sanat Kumar Raha, DR
Section 139(1)Section 143(2)Section 143(3)Section 144Section 147Section 148Section 151(1)Section 153ASection 68

second plea of the assessee is that the case of the assessee has been reopened on the basis of borrowed satisfaction of DDIT (Inv) Unit-1(2), and not on the basis of the tangible material showing escapement of income and formation of belief of the AO that income ... Kelvinator of India Ltd. [2010] 320 ITR 561 (SC)/[2010] [18-01-2010] wherein it has held that reopening made on the basis of borrowed satisfaction cannot be sustained where the reasons failed to demonstrate live link between the tangible material and formation of the reason to believe that

Assistant Commissioner of Income Tax, Delhi vs. The Indure Private Limited, Delhi

In the result, the appeal filed by the Department of Revenue is dismissed

ITA 4640/DEL/2024[2013-14]Status: DisposedITAT Delhi31 Dec 2025AY 2013-14

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarassessment Year: 2013-14 Assistant Commissioner Of Vs. The Indure Private Limited, Income Tax, Indure House, Greater Kailash Part Ii, Delhi South Delhi 1100 48 Pan :Aaact0121C (Appellant) (Respondent)

Section 139(1)Section 142(1)Section 143(2)Section 147Section 148Section 148ASection 250Section 69C

that AO had not conducted any independent inquiry but merely relied on the report of the Investigation wing, meaning that AO made relied upon borrowed satisfaction and concluded the assessment. This seems to be one of the objections raised by the assessee even before the AO and before analyzing ... look at the AO's response as mentioned in the assessment order, relevant extract as below for ready reference: 5 “On the matter of borrowed satisfaction, it is mentioned that the reopening of cases are based on the information analyzed by the internal investigation agencies of the department. The case

ITO, Ward-6(1)(1), Ahmedabad vs. Janakbhai Dharamshibhai Patel, Ahmedabad

In the result, all the appeals of the Revenue are hereby dismissed, whereas all the Cross Objections of the Assessee are hereby allowed

ITA 1116/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad30 Dec 2025AY 2016-17

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Abhijit, Sr.DR
Section 148Section 250Section 68

which was duly reflected in Form 26AS. The AO without verifying the above aspects, proceeded to reopen the assessment merely on the basis of borrowed satisfaction of the Investigation Wing and did not make any effort to verify the said information from the accounts of the assessee. The another fact ... V.Nitin, therefore, under the circumstances, neither the reopening of the assessment was valid, in this case, as the AO has simply acted on borrowed satisfaction of the Investigation Wing nor the addition on merits is sustainable as the payments made by M/s.V. Nitin to ITA Nos.1114 to 1116/Ahd/2025 (By Revenue

ITO, Ward-6(1)(1), Ahmedabad vs. Janakbai Dharamshibhai Patel, Ahmedabad

In the result, all the appeals of the Revenue are hereby dismissed, whereas all the Cross Objections of the Assessee are hereby allowed

ITA 1115/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad30 Dec 2025AY 2015-16

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Abhijit, Sr.DR
Section 148Section 250Section 68

which was duly reflected in Form 26AS. The AO without verifying the above aspects, proceeded to reopen the assessment merely on the basis of borrowed satisfaction of the Investigation Wing and did not make any effort to verify the said information from the accounts of the assessee. The another fact ... V.Nitin, therefore, under the circumstances, neither the reopening of the assessment was valid, in this case, as the AO has simply acted on borrowed satisfaction of the Investigation Wing nor the addition on merits is sustainable as the payments made by M/s.V. Nitin to ITA Nos.1114 to 1116/Ahd/2025 (By Revenue

ITO, Ward-6(1)(1), Ahmedabad vs. Janakbhai Dharamshibhai Patel, Ahmedabad

In the result, all the appeals of the Revenue are hereby dismissed, whereas all the Cross Objections of the Assessee are hereby allowed

ITA 1114/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad30 Dec 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Abhijit, Sr.DR
Section 148Section 250Section 68

which was duly reflected in Form 26AS. The AO without verifying the above aspects, proceeded to reopen the assessment merely on the basis of borrowed satisfaction of the Investigation Wing and did not make any effort to verify the said information from the accounts of the assessee. The another fact ... V.Nitin, therefore, under the circumstances, neither the reopening of the assessment was valid, in this case, as the AO has simply acted on borrowed satisfaction of the Investigation Wing nor the addition on merits is sustainable as the payments made by M/s.V. Nitin to ITA Nos.1114 to 1116/Ahd/2025 (By Revenue

JCIT(OSD), Delhi vs. Aurionpro Toshi Automatic Systems Private Limited, Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 674/DEL/2025[2019-20]Status: DisposedITAT Delhi30 Dec 2025AY 2019-20

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Shri Satyaprakash, CAFor Respondent: Shri Om Prakash, Sr. DR
Section 143(2)Section 147Section 148Section 148ASection 68Section 69C

Aggrieved assessee preferred an appeal before ld. CIT (A) and filed detailed submissions and raised grounds on the issue of reopening the assessment with borrowed satisfaction and also on merits. 4. Ld. CIT (A) dismissed the ground on borrowed satisfaction and allowed the grounds on merits and observed as under

Aggarwal Agro Industries, Karnal vs. ITO-Ward-1, Karnal

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

ITA 2544/DEL/2024[2013-14]Status: DisposedITAT Delhi30 Dec 2025AY 2013-14
For Appellant: Shri Manav Agarwal, ARFor Respondent: Shri Ajay Kumar Arora, Sr. DR
Section 139(1)Section 142(1)Section 143(2)Section 147Section 148Section 292CSection 69C

further and. independent mind was applied and resultant re-assessment order thus framed by the Ld. 9 A.O for the AY 2013-14 on borrowed satisfaction is wholly illegal and deserves to be quashed and the Ld. CIT(Appeals) has further erred in confirming the same. 6. That without prejudice

Hardayal Milk Products Private Limited, Shikohabad vs. DCIT, Circle-2(2)(1), Firozabad

In the result, both the appeals filed by assessee are allowed

ITA 344/AGR/2025[2013-14]Status: DisposedITAT Agra29 Dec 2025AY 2013-14

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singh

Section 143(3)Section 145(3)Section 147Section 148Section 151Section 250Section 68

Assessing Officer. The Hon’ble Court quashed the reassessment, noting that there was no independent verification or inquiry by the AO. It amounted to borrowed satisfaction. e)CIT v. Usha International Ltd. [2012] 348 ITR 485 (Del HC) (Full Bench), wherein it is held that if an issue was properly ... suspect". The AO has to carry out further examination to convert the "reason to suspect" into "reason to believe". If the AO acts on borrowed satisfaction and without application of mind, the reopening is void. g) GOKUL AGRO RESOURCES LIMITED vs. DCIT (IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Hardayal Milk Products Private Limited, Shikohabad vs. DCIT, Circle-2(2)(1), Firozabad

In the result, both the appeals filed by assessee are allowed

ITA 343/AGR/2025[2013-14]Status: DisposedITAT Agra29 Dec 2025AY 2013-14

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singh

Section 143(3)Section 145(3)Section 147Section 148Section 151Section 250Section 68

Assessing Officer. The Hon’ble Court quashed the reassessment, noting that there was no independent verification or inquiry by the AO. It amounted to borrowed satisfaction. e)CIT v. Usha International Ltd. [2012] 348 ITR 485 (Del HC) (Full Bench), wherein it is held that if an issue was properly ... suspect". The AO has to carry out further examination to convert the "reason to suspect" into "reason to believe". If the AO acts on borrowed satisfaction and without application of mind, the reopening is void. g) GOKUL AGRO RESOURCES LIMITED vs. DCIT (IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Jm Financial Foundation, Mumbai vs. ITO (Exemption)-Ward-1(4), Mumbai

In the result, appeal filed by assessee stands at for statistical purposes

ITA 6558/MUM/2025[2018-19]Status: DisposedITAT Mumbai29 Dec 2025AY 2018-19

Bench: Smt. Beena Pillai () & Shri Makarand Vasant Mahadeokar ()

Section 11Section 11(2)Section 147Section 148Section 151A

year without appreciating that there did not exist any reason to believe that income escaped assessment and reopening is on the basis of borrowed satisfaction and hence reopening of assessment is bad in law. 2. That on the facts and circumstances of the case and in law the Ld. National

Jm Financial Foundation, Mumbai vs. ITO (Exem) Ward 1(4), Mumbai

In the result, appeal filed by assessee stands at for statistical purposes

ITA 6557/MUM/2025[2017-18]Status: DisposedITAT Mumbai29 Dec 2025AY 2017-18

Bench: Smt. Beena Pillai () & Shri Makarand Vasant Mahadeokar ()

Section 11Section 11(2)Section 147Section 148Section 151A

year without appreciating that there did not exist any reason to believe that income escaped assessment and reopening is on the basis of borrowed satisfaction and hence reopening of assessment is bad in law. 2. That on the facts and circumstances of the case and in law the Ld. National

Vanraj Ranchhoddas Merchant (Through Legal Heir Harshit Merchant), Mumbai vs. ITO Ward 30(1)(1), Mumbai

In the result the appeal of the assessee is partly allowed

ITA 5234/MUM/2025[2011-12]Status: DisposedITAT Mumbai29 Dec 2025AY 2011-12

Bench: Smt. Beena Pillai & Shri Makarand Vasant Mahadeokar

Section 133(6)Section 143(1)Section 143(3)Section 147Section 148Section 250Section 50CSection 54F

that the same was issued in a casual manner, without even mentioning the jurisdiction of the concerned Commissioner and merely on the basis of borrowed satisfaction. However, the learned Authorised Representative fairly submitted that she does not wish to press the first legal ground challenging the validity of reopening under

Sunil Sponge Pvt. Ltd., Raipur vs. ACIT, Central Circle-1, Raipur

In the result, appeal of the assessee is allowed

ITA 748/RPR/2025[2018-19]Status: DisposedITAT Raipur24 Dec 2025AY 2018-19

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.748/Rpr/2025 "नधा"रण वष" /Assessment Year : 2018-19 Sunil Sponge Private Limited Plot No.96-97, Phase-Ii, Industrial Area, Siltara, Raipur-492 001 (C.G.) Pan: Aahcs7999A

For Appellant: Shri Veekaas S Sharma, CAFor Respondent: Dr. Priyanka Patel, Sr. DR
Section 153D

application of mind and reasoning while issuing such approval and in the present case, the entire approval, as apparent, is only based on the borrowed satisfaction from the A.O and that there has been no independent application of mind by the competent authority while providing the said statutory approval which ... Kumar Agrawal; and (ii) Sr. No. 2: Smt. Mamta Agrawal and Sr.No.2 is the appellant assessee before this Bench. Rather, it is only borrowed satisfaction from the A.O due to which the approval u/s.153D of the Act was granted summarily in the case of the assessee which vitiates such

Arcoy Industries (India) Private Limited, Ahmedabad vs. The DCIT, Circle-1(1)(1), Ahmedabad

In the result, all the captioned four appeals of the assessee are hereby allowed

ITA 427/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad23 Dec 2025AY 2017-18

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Respondent: Shri Alpesh Parmar, CIT-DR
Section 147Section 148Section 153CSection 250Section 68

correctness of the information available on insight portal, straightaway, reopened the assessment u/s 147 of the Act, which is totally on the basis of borrowed satisfaction obtained from inside portal. The Ld. AR has submitted that the AO has failed to establish any live nexus between information received from Insight ... insight portal with the accounts/assessment records of the assessee. This is a case where the AO has reopened the assessment on the basis of borrowed satisfaction and without application of mind and the reasons recorded by the AO do not constitute sufficient and valid reasons for forming belief

Arcoy Industries (India) Private Limited, Ahmedabad vs. The DCIT, Circle-1(1)(1), Ahmedabad

In the result, all the captioned four appeals of the assessee are hereby

ITA 426/AHD/2024[2015-16]Status: DisposedITAT Ahmedabad23 Dec 2025AY 2015-16

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Appellant: Shri S.N. Soparkar, Sr.AdvocateFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 147Section 148Section 153CSection 250Section 68

correctness of the information available on insight portal, straightaway, reopened the assessment u/s 147 of the Act, which is totally on the basis of borrowed satisfaction obtained from inside portal. The Ld. AR has submitted that the AO has failed to establish any live nexus between information received from Insight ... insight portal with the accounts/assessment records of the assessee. This is a case where the AO has reopened the assessment on the basis of borrowed satisfaction and without application of mind and the reasons recorded by the AO do not constitute sufficient and valid reasons for forming belief

Arcoy Industries (India) Private Limited, Ahmedabad vs. The DCIT, Circle-1(1)(1), Ahmedabad

In the result, all the captioned four appeals of the assessee are hereby allowed

ITA 425/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad23 Dec 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Respondent: Shri Alpesh Parmar, CIT-DR
Section 147Section 148Section 153CSection 250Section 68

correctness of the information available on insight portal, straightaway, reopened the assessment u/s 147 of the Act, which is totally on the basis of borrowed satisfaction obtained from inside portal. The Ld. AR has submitted that the AO has failed to establish any live nexus between information received from Insight ... insight portal with the accounts/assessment records of the assessee. This is a case where the AO has reopened the assessment on the basis of borrowed satisfaction and without application of mind and the reasons recorded by the AO do not constitute sufficient and valid reasons for forming belief

Arcoy Industries (India) Private Limited, Ahmedabad vs. The DCIT, Circle-1(1)(1), Ahmedabad

In the result, all the captioned four appeals of the assessee are hereby allowed

ITA 424/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad23 Dec 2025AY 2013-14

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinha

For Respondent: Shri Alpesh Parmar, CIT-DR
Section 147Section 148Section 153CSection 250Section 68

correctness of the information available on insight portal, straightaway, reopened the assessment u/s 147 of the Act, which is totally on the basis of borrowed satisfaction obtained from inside portal. The Ld. AR has submitted that the AO has failed to establish any live nexus between information received from Insight ... insight portal with the accounts/assessment records of the assessee. This is a case where the AO has reopened the assessment on the basis of borrowed satisfaction and without application of mind and the reasons recorded by the AO do not constitute sufficient and valid reasons for forming belief

Deputy Commissioner of Income Tax, Central Circle-1(2), Kolkata vs. Siddheshwari Vyapaar Private Limited, Kolkata

In the result, appeal of the revenue is dismissed

ITA 2280/KOL/2025[2012-13]Status: DisposedITAT Kolkata23 Dec 2025AY 2012-13

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyआयकर अपील सं/Ita No.2280/Kol/2025 (निर्धारणवर्ा/Assessment Years :2012-2013) Dcit, Central Circle-1(2), Vs Siddheshwarivyapaar Pvt Ltd Kolkata 2Nd Floor, 159, Ravindra Sarani Kolkata-700007 Pan No. :Aancs 2337 J (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) रधजस्वकीओरसे /Revenue By : Shri Sanat Kumar Raha, Cit-Dr निर्धाररतीकीओरसे /Assessee By : Shrisoumitra Choudhury & Rainak Jain, Advocates सुनवाई की तारीख / Date Of Hearing : 09/12/2025 घोषणा की तारीख/Date Of Pronouncement : 23.12.2025 आदेश / O R D E R Per Rajesh Kumar, Am: This Is An Appeal Filed By The Revenueagainst The Order Passed By The Ld. Cit(A), Kolkata-20, Dated 06.05.2025For The Assessment Year2012-2013. 2. The Appeal Of The Revenue Is Barred By 69 Days. Considering The Submissions Of The Ld. Cit-Dr & Looking To The Facts Of The Case, We Condone The Delay Of 69 Days In Filing The Present Appeal By The Revenue & The Appeal Is Admitted For Hearing. 3. The Only Issue Raised In This Appeal Is Against The Order Of The Ld. Cit(A) In Deleting The Addition Of Rs.6,82,00,000/- Made U/S.68 Of The Act On Account Of Unexplained Cash Credits Received From Shell Entities In The Guise Of Share Capital.

For Appellant: ShriSoumitra Choudhury and Rainak Jain, AdvocatesFor Respondent: Shri Sanat Kumar Raha, CIT-DR
Section 131Section 133(6)Section 143(2)Section 143(3)Section 148Section 68

lack of independent application of mind. It is a well-settled legal principle that reassessment proceedings initiated on the basis of incorrect facts or borrowed satisfaction are invalid in the eyes of law. In the present case, the only allegation was that the fund trail, as indicated by the Investigation ... escaped assessment. The court observed that the AO's conclusions were merely a reproduction of the findings in the Investigation Report, amounting to "borrowed satisfaction." The reasons recorded by the AO failed to establish a clear connection between the tangible material and the formation of the belief that income

Mahak Doshi Legal Heir of Late Aditya Doshi, Kolkata vs. I.T.O., Ward - 2(1), Kolkata

Appeal of the assessee is allowed

ITA 2075/KOL/2025[2011-2012]Status: DisposedITAT Kolkata23 Dec 2025AY 2011-2012

Bench: SHRI RAJESH KUMAR (Accountant Member)

Section 147Section 148Section 250

recorded are cryptic and there is no live link between the information received and the reasons to believe and can only a case of borrowed satisfaction and non application of mind to the information received. In our opinion, the reopening of assessment is not permissible on the basis of such ... recorded with non 3 Mahak Doshi, L/H of Aditya Doshi application of mind. In our opinion, reopening assessment has been made merely on borrowed satisfaction which rendered the notice u/s 148 of the Act as well as assessment framed to be invalid and nullity. Therefore, considering these facts and circumstances