2025 (3) TMI 298 - AT - Income Tax

Reopening of assessment u/s 147 - Addition u/s 68 - Reason to believe or suspect - HELD THAT - Assessee filed all the details before the AO during the assessment proceedings and similarly the loan creditor responded to the notice issued u/s 133(6) and acknowledged that the assessee has been given an unsecured loan. The transaction of loan was examined in the original assessment proceedings. Now the reasons recorded by the AO has not stated as to how the assessee failed to disclose the fully and truly all material facts qua the said loan which has resulted into escapement of income. Therefore the issue at hand is squarely covered in the case of CEAT Ltd. 2023 (1) TMI 73 - SC ORDER and accordingly we quash the reopening of assessment made by the AO. Appeal of the assessee is allowed

Summary

The appeal before the Appellate Tribunal concerned the delay in filing the appeal, the challenge to the reopening of assessment under section 147 of the Act, and the addition of Rs. 19 lacs as unexplained income. The Tribunal considered the reasons for the delay in filing the appeal, the legality of the reassessment, and the merits of the case.The delay in filing the appeal by 244 days was attributed to technical glitches with the assessee's email system. The Tribunal, after considering the explanations provided by the assessee, concluded that the delay was genuine and bonafide. The Tribunal exercised its discretion to condone the delay and admitted the appeal for adjudication.Regarding the challenge to the reopening of assessment under section 147 of the Act, the assessee argued that the reassessment, made four years after the relevant assessment year, lacked justification. The assessee contended that all relevant information regarding the unsecured loan of Rs. 19 lacs had been provided during the original assessment proceedings. The Tribunal noted that the reasons recorded by the Assessing Officer did not demonstrate any failure on the part of the assessee to disclose material facts, as required by law. Citing the decision of the Hon'ble Apex Court in ACIT Vs. CEAT Ltd., the Tribunal quashed the reopening of the assessment, ruling in favor of the assessee on the legal issue.In conclusion, the Tribunal allowed the appeal of the assessee on the legal issue of the reopening of assessment under section 147 of the Act. The Tribunal's decision was based on the lack of justification for the reassessment and the failure to demonstrate non-disclosure of material facts by the assessee. The order was pronounced in open court on 04.03.2025.