Ahmedabad ITAT Quashes Reopening In Absence Of Tangible Material With AO To Form Reason To Believe Escaped Assessment
Pankaj Bajpai
15 March 2024 7:30 AM GMT
The Ahmedabad ITAT quashed reopening proceedings finding that there was no tangible material available with the AO to form a reason to believe that the income of assessee has escaped assessment.The Bench of Waseem Ahmed (Accountant Member) and Siddhartha Nautiyal (Judicial Member) observed that “simply that Shri Prakash bhai Ishwar bhai Changela and the assessee are maintaining the bank...
The Ahmedabad ITAT quashed reopening proceedings finding that there was no tangible material available with the AO to form a reason to believe that the income of assessee has escaped assessment.
The Bench of Waseem Ahmed (Accountant Member) and Siddhartha Nautiyal (Judicial Member) observed that “simply that Shri Prakash bhai Ishwar bhai Changela and the assessee are maintaining the bank account in the Social Co-operative cannot be a ground to draw a conclusion that the assessee is engaged in the accommodation entry and consequently form the reason to believe that the income of the assessee has escaped assessment”. (Para 7)
As per the brief facts of the case, the proceedings were initiated u/s 147 on the reasoning that there were various debits and credits in the bank account namely the Social Co-operative Bank Ltd. of the assessee. There was the information received by the Assessing Officer with respect to the party namely Prakash bhai Ishwar bhai Changela, proprietor of M/s Reliance Enterprises who was maintaining bank account among other banks in the Social Co-operative Bank Ltd., who was believed by the AO to be engaged in providing accommodation entry. Thus, the AO opined that the assessee has escaped assessment to the tune of Rs. 16,25,47,481/- only. However, the CIT(A) quashed the assessment order framed by the AO.
The Bench noted that that the bank account in dispute has already been considered by the Assessing Officer during the assessment proceedings framed u/s 153C r.w.s. 143(3) of the Act.
The Bench noted that there was no tangible material available with the Assessing Officer to form the reason to believe that the income of the assessee has escaped assessment.
Likewise, the Bench also noted that the information from the investigation wing was received with respect to Prakash bhai Ishwar bhai Changela who has no connection with the assessee.
The Bench observed that there was no information received from the external agency suggesting that the income of the assessee has escaped assessment.
Hence, the ITAT dismissed the appeal of the Revenue and quashed the re-assessment.
Counsel for Appellant/ Revenue: Sudhendu Das
Counsel for Respondent/ Assessee: Suresh Gandhi
Case Title: ACIT verses Aaryavart Infrastructure Pvt. Ltd
Case number: ITA No. 154/Ahd/2021
