2024 (1) TMI 1337 - HC - Income Tax

Court Overturns Income Tax Order: Assessing Officer's Failure to Consider Explanation Results in Quashing Decision.

The HC of Calcutta allowed the intra-court appeal by the writ petitioner/assessee, overturning the order dated 5th July 2023 in WPO No. 1193 of 2023 under ... Validity of Reopening of assessment - order passed u/s 148A(d) - procedure for faceless assessment was not followed - as contended that the explanation offered by the assessee for the allegation against them was not considered by the AO - HELD THAT:- The assessee enclosed the ledger copy along with balance confirmation along with its reply. Therefore, the assessee submitted that the allegation that they have routed back their unaccounted income by way of unsecured loan is baseless and without any corroborative evidence. If such was the explanation given by the assessee, it was the duty of the AO to consider the explanation and give reasons as to why it is not acceptable. However, the AO only states that the assessee has failed to substantiate the alleged amount of escaped income of Rs. 25,00,000/- is a genuine transaction. The order passed u/s 148A(d) is a nonspeaking order, outcome of total non-application of mind and it also reveals that the Assessing Officer had no material to controvert the explanation offered by the assessee that Brightmoon Supply Pvt. Ltd. is a NBFC and loan was taken during the AY 2019-20 and repaid along with interest in the same year and this was substantiated by the assessee by producing the ledger copy of a loan account. Thus, we find it is not a case where the power u/s 148 of the Act could have been invoked by the assessing officer. Accordingly, the appeal is allowed. The High Court of Calcutta allowed the intra-court appeal by the writ petitioner/assessee against the order dated 5th July, 2023 in WPO No. 1193 of 2023 under Section 148A(d) of the Income Tax Act, 1961. The court found that the assessing officer did not consider the explanation offered by the assessee and passed a non-speaking order, leading to the quashing of the order dated 19th April, 2023.