#borrowed satisfaction

ITAT Kolkata sets aside reassessment proceedings initiated under Section 147 where the Assessing Officer relied exclusively on an investigation wing report without independent scrutiny. The ruling reinforces that procedural fairness mandates personal satisfaction of the AO, not borrowed satisfaction, to uphold reassessment validity.

ITAT Kolkata ruled that reopening an assessment under Section 148 of the Income Tax Act without independent application of mind or corroborative evidence is void. The tribunal quashed the reassessment, emphasizing that reliance on a third-party report without verification breaches principles of natural justice, setting a precedent for taxpayers facing mechanical reassessment proceedings.

The ITAT Ahmedabad struck down a reassessment under Section 147 because the Assessing Officer relied solely on uncorroborated investigation reports from a third party’s search, without establishing that the assessee had actually concealed material facts. This ruling reinforces that tax authorities cannot substitute their own speculative inferences for concrete evidence, protecting assessees from arbitrary additions under Section 69C based on hearsay or borrowed conclusions.