The High Court held that the Assessing Officer (AO) had ...

Income Tax reopening for unsecured loans impermissible after prior consideration.

Case Laws     Income Tax

September 5, 2024

The High Court held that the Assessing Officer (AO) had specifically called for and considered information regarding unsecured loans during the original assessment proceedings u/s 143(3) of the Income Tax Act. The assessee had furnished the requisite details. Merely a difference between the unsecured loan amounts in the books and the AO's addition cannot be grounds for reopening assessment on the premise of escaped income. The AO had already examined the issue during regular assessment. The reliance on the Supreme Court's decision in Income Tax Officer vs. Techspan India Private Limited is misplaced as that case dealt with failure to consider certain aspects, unlike the present case where the AO had considered the unsecured loans. Issuing a reopening notice u/s 148 amounts to a mere change of opinion, which is impermissible. Furthermore, the addition regarding unsecured loans had already attained finality through the Commissioner (Appeals) order. Consequently, the AO lacked jurisdiction to reopen the assessment, and the assessee's appeal was allowed.

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