TITLE: S. 147: Court can examine existence but not
adequacy of reasons. AO is only required to provide material on which he relies
to reopen the assessment
CASE: Acorus Unitech Wireless Pvt. Ltd vs. ACIT
(Delhi High Court)
(i) It
is important to restate an accepted, but often neglected, principle, that in
its writ jurisdiction, the scope of proceedings before the Court while
considering a notice under Section 147/148 is limited. The Court cannot enter
into the merits of the subjective satisfaction of the AO, or judge the
sufficiency of the reasons recorded, but rather, determine whether such opinion
is based on tangible, concrete and new information that is capable of
supporting such a conclusion. This was recognized by the Supreme Court in Phool
Chand Bajrang Lal v. ITO 203 ITR 456 (SC);
(ii) The
law only requires that the information or material on which the AO records his
or her satisfaction is communicated to the asseseee, without mandating the
disclosure of any specific document. While the 2G Spectrum Report has not been
supplied in this case on grounds of confidentiality, the reasons recorded have
been communicated and do provide – independent of the 2G Report – details of
the new and tangible information that support the AO’s opinion. These facts are
capable of justifying the satisfaction recorded on their own terms, as
discussed above. In this context, there is no legal proposition that mandates
the disclosure of any additional document. This is not the say that the AO may
in all cases refuse to disclose documents relied upon by him on account of
confidentiality, but rather, that fact must be judged on the basis of whether
other tangible and specific information is available so as to justify the
conclusion irrespective of the contents of the document sought to be kept
confidential. In cases such as the present, however, where the information and
facts communicated by the AO are themselves in accordance with the minimum
requirement under Section 147/148, the petitioner cannot compel the disclosure
of other documents that the assessee may have also relied upon.
