Ashok Kumar Singh vs ACIT

PER MADHUMITA ROY, JM.:

The instant appeal filed by the Assessee is directed against the order dated 03.11.2025 passed by the Ld. Commissioner of Income-tax (Appeals) under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the Assessment Order dated 24.03.2025 passed by the Assessment Unit, Income-tax department under Section 147 read with Section 144B of theAct for Assessment Year 2019-20.

The brief facts leading to the case is this that reassessment proceeding under Section 147 of the Act was initiated pursuant to a notice under Section 148A(b) of the Act dated 21.03.2023 only on the basis of an information available on the Insight Portal alleging the appellant had received an unexplained credit of Rs. 1,00,00,000/- form one M/s Triconnect Infra India Private Limited. The Assessee duly filed its reply explaining the amount represented a genuine loan received through banking channel and supporting documents including the loan agreement, confirmation, ledger account, bank statements and financial statements of the lender were duly furnished. However, the Assessing Officering ultimately passed anorder under Section 148A(d) dated 05.04.2024 and further issued a notice under Section 148 of the Act alleging income escapement assessment qua the loan of Rs. 1,00,00,000/- from the said M/s Triconnect Infra India Private Limited culminating in making addition of Rs. 1,00,00,000/- under Section 69A by treating the said loan as unexplained which was further confirmed by the First Appellate Authority. Hence, the instant appeal before us.

In-fact the Assessee was issued a show cause under Section 148A(b) of the Act, as to why Notice under Section 148 of the Act may not be issued against the Assessee on the basis of the information on record suggesting income chargeable to the tax escaped assessment for A.Y 2019-20 in response thereto the Assessee replied that he is one of the Directors of Zephyr Limited and Ashpra Skills Pvt. Ltd. and the source of his income is income from salary, income from house property i.e. the rental income and income from other sources i.e. the interest income. The relevant document in support of the said income were duly furnished before the Ld. AO including the documents and information explaining the transactions impugned i.e. receipt from M/s Triconnect Infra Pvt. Ltd. to the tune of Rs. 1,00,00,000/- being the loan taken from the said company by the Assessee. It was further clarified that the same was received by the Assessee through banking channel and a copy of the bank statement of the Assessee showing receipt and ledger account togetherwith declaration signed by the authorized person on behalf of the company was also attached to such reply. Apart from that the Assessee duly submitted that since the Assessee does not have any business income or from profession exceeding the limit prescribed for tax audit, no Form 3CB-CD was required to be filed and merely because the form was not filed, the genuine loan transaction should not be treated as unexplained credit as the case made out by the assessee. In support of the same, a confirmation letter from the relevant parties was also duly attached along with the reply filed by the Assessee on 28^th March, 2023. Finally, we find that on 05.04.2023 an order under Section 148A(d) of the Act was issued by the ITO, Circle-1(1), Delhi, the paragraph 3 whereof narrates the entire loan taken by the Assessee from the said M/s Triconnect Infra Pvt. Ltd. through banking channel and the bank statement of the Assessee showing receipt and the ledger togetherwith declaration were submitted. However, the same was not found to be convincing as the Assessee has not mentioned any information in the ITR in respect of the said loan and therefore, the Ld. AO was of the final opinion that the Assessee had escaped assessment to the tune of Rs. 1,00,00,000/- which has been considered as unexplained and to be taxed in the hands of the Assessee for A.Y 2019-20 and, therefore, notice under Section 148 of the Act to be issued.

The assessee joins issue here to this effect that the addition made by Ld. AO on the ultimate finding that the assessee has not mentioned loan information in the ITR is not sustainable in the eyes of law as because the assessee is an individual and there is no scope of disclosing this particular fact of receiving loan in the return so filed by the assessee. In support of this case made out by the assessee, the Ld. A.R brought to our notice to the ITR, wherefrom it appears that there is no column for disclosure of any loan there. Neither any books of accounts nor ledger account could have been annexed as the assessee does not have any income from business or profession. Such argument made by the Ld. AR is also found to be convincing having regard to copy of the return filed by the assessee at page 12 to 48 of the paper book file before us. Infact, during the course of hearing the Ld. DR could not controvert such submission made by the Ld. AR. Admittedly there is no column for disclosure of any loan in the ITR so filed by the Assessee being an individual and, therefore, having regard to the entire aspect of the matter, we find that non consideration of this particular aspect of the matter which was duly explained before the Ld. AO is nothing but non-application of mind and the order under Section 148A(d) of the Act is thus, found to be mechanical, vague, non speaking. When the Assessee has filed the entire set of documents in support of the genuineness of loan received through normal banking channel including the loan agreement, confirmation from the lender, the ledger account, the bank statement and financial statement of the lender in response to the notice under Section 148(b) of the Act, the same ought to have been considered in its proper perspective and further alleging non disclosure of loan transaction in the ITR scope whereof was not been available since the assessee is an individual, the entire order under Section 148A(d) of the Act leading to issuance of order under Section 148 of the Act is found to be bad in law, not sustainable and, therefore quashed.

In the result, the assessee’s appeal is allowed. Since, we have dealt with the jurisdictional issue and decided the matter finally, the other grounds raised by the Assessee become academic and, therefore, no orders need to be passed. Assessee’s appeal is allowed.