Reassessment is invalid as PCIT approval is mechanical and on vague Reasons: ITAT Kolkata
The ITAT Kolkata allowed the appeal of Regis Industries Ltd. for AY 2009–10, quashing the reassessment proceedings under Section 147. The Tribunal held that the reopening was invalid as it was based on vague, borrowed satisfaction and wrong factual assumptions-including citing cash deposits in an ICICI Bank account which the assessee never held.
The Tribunal emphasized that the Assessing Officer had mechanically relied on third-party investigation reports without independent application of mind and failed to record specific reasons or transaction details. Additionally, the approval granted by the PCIT was held to be mechanical and post-dated to the issuance of notice, further invalidating the proceedings. On merits, the Tribunal found that the assessee had fully explained the share sale transactions, supported by confirmations and remand report verifications, thereby deleting additions under Sections 68 and 69.
The ruling reinforces the principle that reassessments must be rooted in precise facts and independent judgment, not vague suspicion or clerical reproduction of investigation reports.
The copy of the order is as under:
