2017 (7) TMI 913 - AT - Income Tax

Reopening of assessment - reasons to believe - non independent mind used by AO - Held that - The reopening u/s 147 r.w.s 148 of the Act was done only on the basis of the information received from the Investigation Wing and the AO did not apply his independent mind to come to the conclusion that the income of the assessee escaped assessment. - Decided in favour of assessee.

Summary

Issues Involved:
Reopening of assessment under section 147 of the Income Tax Act, 1961 based on information received from the Investigation Wing.

Analysis:

Issue 1: Reopening of Assessment
The assessee contested the reopening of the assessment under section 147 of the Income Tax Act, 1961. The AO had reopened the assessment based on information from the Investigation Wing, without applying his independent mind to determine if income had escaped assessment. The Tribunal noted that the AO's action lacked the necessary application of mind, as highlighted in the case of Principal Commissioner of Income Tax-4 Vs G & G Pharma Ltd. The Tribunal held that the reopening was invalid as it was solely based on information from the Investigation Wing, without the AO forming a prima facie opinion. Consequently, the reassessment was deemed invalid and quashed.

Conclusion:
The Tribunal allowed the appeal of the assessee, ruling in favor of invalidating the reassessment due to the lack of proper application of mind by the Assessing Officer in reopening the assessment solely based on information from the Investigation Wing.