Income Tax Reassessment Notices Quashed: AO Failed to Apply Independent Mind When Evaluating Investigation Wing's Report Under Section 147

The HC quashed reassessment notices under Section 147 of the Income Tax Act, finding that the Assessing Officer failed to properly consider the Investigation Wing's report and mechanically issued notices without independent application of mind. The AO erroneously treated the total of debit and credit entries from the petitioner's books as escapement of income, without establishing any rational nexus between the transactions and alleged income escapement. Following precedents in Paresh Babubhai Bahalani and Bharatkumar Nihalchand Shah, the Court held that non-specific reasons without establishing nexus between transactions and income escapement invalidate reassessment jurisdiction. The proceedings were set aside due to lack of independent satisfaction in the recorded reasons. .....

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