INCOME TAX ACT, 1961

Section 147

Reassessment-Reason to believe - Report of investigation wing that there were unaccounted cash deposit in bank account of assessee - AO even did not verify the information received from Investigation Wing and did not even obey directions of Investigation Wing -

AO reopened assessment for the reason that investigation wing had reported that there were unaccounted cash deposit in the bank account of assessee. Held:Investigation Wing has advised the AO to go through bank statements and other documents before arriving at the conclusion that there was escapement of income under section 148.Admittedly bank pass books were available on record which fact was also mentioned by AO in the assessment order. Assessee, on the other hand, had prepared a chart based on bank statements of various bank accounts to show actual cash deposit. There was a huge difference between cash deposited in bank accounts of assessee. In these circumstances, it was duty of AO to verify the facts before coming to the conclusion that there was escapement of income on account of cash deposited in bank account of assessee. However, AO even did not verify the information received from Investigation Wing and did not even obey directions of Investigation Wing. Accordingly, reopening of assessment was not sustainable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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