Whether the ITAT needs to check the facts of the case rather than quashing the appeal order on a legal issue?

 

The issue before the Kolkata High Court in the case of whether on the facts and in the circumstances of the case the ITAT erred in law in quashing the proceedings under Section 147 of the Income Tax Act, 1961 by not appreciating the facts of the issue?

The division bench of Calcutta High Court in this case was dealing with reassessment proceedings for AY 2011-12 where the ITAT Kolkata benches quashed the proceedings in view of the fact that when the original assessment was completed u/s 143(3), there being no allegation in the reasons recorded in writing that there was any omission or failure to disclose fully and truly all material facts necessary for the assessment, ignoring the factual aspects of the finding by the AO that the assessee was beneficiary of huge credits in its bank account from entry operators, besides huge cash deposit in the bank account which were said to be on account of cash sales which sales stood not verified.

The Division bench considering the factual aspects in detail allowed the appeal of the department by quashing the order passed by ITAT and restoring the order of the CIT(A) by holding that the tribunal failed to examine any of the factual details which have been brought out by the assessing officer as well as the CIT(A) but merely went on the basis as to what are the conditions to be fulfilled in order to reopen the assessment.

Undeniably, the judgement will be thus a major win for the department and in all cases where bogus entry transactions, cash deposit etc are subject matter, this judgement will definitely be cited by the department

 

The copy of the order is as under:

Whether the ITAT needs to check the facts of the case rather than quashing the appeal order on a legal issue?