Guidelines for recording reasons for reopening assessments are only a guidance for the AO: Calcutta HC
Principal CIT-9 Kolkata vs. P. L. Goenka HUF (ITAT/241/2024)
Facts:
1. The assessee (P.L. Goenka HUF) was reassessed for AY 2013-14 under Section 147 r.w.s. 144B.
2. The reassessment was triggered based on information from the Investigation Wing about bogus LTCG from penny stock transactions in M/s. Tuni Textiles Mills Ltd.
3. ITAT allowed the assessee’s appeal, primarily on the ground that:
The AO merely acted on borrowed information.
The CBDT instruction dated 10.01.2018 regarding standard procedures was not followed.
Hon Calcutta HC held as below:
1. CBDT Instruction (10.01.2018) is merely a procedural guide for AOs and not a mandatory rule for assessees. ITAT erred in treating it as binding.
2. Assessment order showed that AO, analyzed financials of Tuni Textiles, examined assessee’s returns, capital gains, and share transactions, issued show cause notices and considered replies.
3. The ITAT ignored detailed factual findings by AO and appellate authority. Incorrectly held there was no application of mind.
4. Thus, the reassessment under Section 147 was upheld and all substantial questions of law were answered in favour of Revenue.
The copy of the order is as under:
