2025 (1) TMI 365

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....ce this fact would have some bearing on the ultimate outcome of this appeal before us, that the reasons for selection for scrutiny were: a) "Low income in comparison to high loans/advances/investment in Shares appearing in balance sheet." b) "Expenses debited to P&L A/c for earning exempt income as per schedule BP of ITR is significantly lower as compared to investments made to earn exempt income." 1.1. It has been recorded by the Assessing Officer (hereinafter referred to as ld. 'AO') that allegedly the assessee did not comply with notice u/s 142(1) of the Income Tax Act, 1961 (in short the 'Act') and therefore the assessment order had to be completed u/s 144 of the Act. Thereafter, the ld. AO proceeded....

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.... there was no income from investments which would merit application of Section 14A of the Act. 2.2. The ld. D/R argued that since the appellant has not complied with the provisions of notice u/s 142(1) of the Act then an order u/s 144 of the Act was justified. 3. We have considered the documents placed before us, the orders of the authorities below and the averments of both ld. AR/DR. It is understood that the Income Tax Department has automated the process of selection for scrutiny and in this case, as mentioned earlier, the only two grounds on which the case was selected for scrutiny were as have been mentioned (supra). The ld. Counsel for the assessee has duly demonstrated that the assessee had duly replied and furnished the releva....