This appeal, filed by GBS Marketing Pvt Ltd, is directed against the order dated 01.02.2019 of the learned CIT(A)-35, New Delhi, for the assessment year 2008-09. The key issues raised include the validity of reassessment proceedings and the addition of Rs. 50 lakhs treated as an accommodation entry under section 68 of the Income Tax Act, 1961.
The case was reopened under the provisions of section 147 of the Act after the AO received information from the Investigation Wing. The reassessment was initiated based on information suggesting that the appellant company was a beneficiary of accommodation entries provided by a certain entity controlled by an individual involved in such activities. The AO issued a notice under section 148 on 20.03.2015 after recording reasons that included alleged non-disclosure of income amounting to Rs. 50 lakhs.
The appellant contested the reassessment on several grounds, arguing that the reopening of the assessment was based on incorrect facts and that the AO had not independently verified the information. The proceedings were also challenged on the basis that the reopening was done without a proper basis for belief that income had escaped assessment, thereby rendering the reassessment invalid.
The Tribunal analyzed the case and found that the reasons recorded for the reopening were not factually correct. It was noted that the information used as the basis for reopening included repetitive and incorrect data, which did not conclusively prove that the income had escaped assessment. Furthermore, the Tribunal observed that the approval for reassessment by higher authorities was given mechanically, without proper scrutiny of the details or the context of the information received from the Investigation Wing.
The Tribunal quashed the reassessment proceedings, holding that the AO had failed to apply his mind independently and had relied solely on the Investigation Wing’s report. The decision emphasized the need for careful examination of all facts and proper application of the law before initiating reassessment proceedings.
The case of GBS Marketing Pvt Ltd highlights the importance of accurate fact-checking and independent verification by tax authorities when reassessing tax liabilities. It serves as a significant precedent for cases involving reassessment based on third-party information or investigative reports.
Reassessment Challenge for Incorrect Facts in the Case of GBS Marketing Pvt Ltd, New Delhi
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