Sec. 147 of Income Tax Act, 1961 – Reassessment – The reasons recorded by the AO are totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken place, thus, the re-opening of assessment based on wrong facts and figures is bad in law.

Facts: Assessee challenges the re-opening of assessment on the ground that the information based on which the re-opening was initiated is factually incorrect information and re-opening was made based on wrong information and nowhere in the information received, it is alleged that there is escapement of income and the AO has not applied his mind to the information received and hence it is a case of non-application of mind by the AO.

Held, that there is non-application of mind by the AO to the information received, prior the re-opening of the assessment. Such non-application of mind to the information received by the AO prior to recording of reasons for re-opening of assessment makes the reopening bad in law.The AO did not mention the details of transactions that represented unexplained income of the assessee company. The information on the basis of which the AO has initiated proceedings u/s 147 are undoubtedly vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of which a reasonable person could have formed a belief that income had escaped assessment. In other words, the reasons recorded by the AO are totally vague, scanty and ambiguous. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which had been given or taken by the assessee in the relevant year. The reasons recorded by the AO are totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken place. Thus, the re-opening of assessment based on wrong facts and figures is bad in law – BHAGWANT MERCHANTS P. LTD. Vs. ITO [2020] 79 ITR (TRIB) 595 (ITAT-KOLKATA)