Dismissing the appeal of the revenue the Court held that; the submission of the Dept that in view of ACIT v.RajeshJhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC), the AO can reopen the assessment for “whatever reason” is preposterous. The AO cannot reopen on the basis of info received from DIT (Inv.) that a particular entity has entered into suspicious transactions without linking it to the assessee having indulged in activity which could give rise to reason to believe that income has escaped assessment. Such reopening amounts to a fishing inquiry. The AO has to apply his mind to the information received by him from the DDIT (Inv.) and cannot act on on borrowed satisfaction. (ITA No. 1297 of 2015, dt. 16.04.2018) ( AY. 2003-04)
PCIT v. Shodiman Investments Pvt. Ltd( 2018) 93 taxmann.com 153/ 167 DTR 290/(2020) 422 ITR 337 . (Bom)(HC), www.itatonline.org
S. 147 : Reassessment–Intimation-The AO cannot reopen on the basis of info received from DIT (Inv.) that a particular entity has entered into suspicious transactions without linking it to the assessee having indulged in activity which could give rise to reason to believe that income has escaped assessment- Such reopening amounts to a fishing inquiry- The AO has to apply his mind to the information received by him from the DDIT (Inv.) and cannot act on on borrowed satisfaction. [S. 143(1), 148]