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Facts
The assessee's assessment for AY 2017-18 was reopened based on information that the assessee had advanced an unsecured loan of Rs. 8,00,000/- to M/s. Jaymangal Realities. The AO confirmed this addition as unexplained money under section 69A.
Held
The tribunal held that the sole information regarding advancing a loan was insufficient to form a belief that income had escaped assessment. Therefore, the reopening of the assessment under section 147 was considered bad in law.
Key Issues
Whether the reopening of assessment under section 147 was justified based on the information available to the Assessing Officer.
Sections Cited
147, 69A, 250
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Income Tax Appellate Tribunal, SURAT BENCH ‘SMC’, SURAT
Before: Shri Sanjay Garg
Year : 2017-18 Savita Heman Rathod The Income Tax Officer बनाम/ K – 2001 New T.t. Market Ward-2(3), v/s. Ring Road Surat – 395 002 Surat – 395 001 "थायी लेखा सं./PAN: AAWPR 6274 M (अपीलाथ&/ Appellant) ('( यथ&/ Respondent) Assessee by : Shri Shaunak R. Zaveri, CA Revenue by : Shri Ajay Uke, Sr.DR सुनवाई की तारीख/Date of Hearing : 08/01/2026 घोषणा की तारीख /Date of Pronouncement: 19/01/2026 आदेश/O R D E R The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 28/05/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2017-2018.
The assessee, in this appeal, has taken following grounds of appeal: “1.0 That on the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [here-in- after referred to as Ld. CIT(Appeals)] was not justified and grossly erred in confirming the action of the A.O. in confirming the order passed u/s. 147 r.w.s 144B of the LT. Act, 1961 which is incomplete and also bad on facts. 2.0 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in confirming the action of the A.O. in by accepting Savita Hemant Rathod vs. ITO Asst. Year : 2017-18 2 the addition of Rs. 5,00,000/- on account of loan treated as unexplained money u/s. 69A of the Act.
3.0 That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the grounds stated here-in-above, either before or at the time of hearing of this appeal.”
At the outset, the Ld. Counsel for the assessee has invited my attention to the impugned order of the Assessing Officer (AO) to submit that, in this case, the assessment of the assessee was reopened by the AO on the ground that during the assessment proceedings in the case of one M/s.Jaymangal Realities, it was found that the said assessee had accepted unsecured loans from various persons and the name of the assessee also figured therein and it was shown that the assessee had advanced an unsecured loan of Rs.8,00,000/- to the said party. On the basis of said information, the assessment of the assessee was reopened by the AO.
The sole information, that the assessee had advanced an amount of Rs.8 lakhs as unsecured loan, cannot be said to be an information on the basis of which the AO can form the belief that the income of the assessee has escaped assessment. Reopening of the assessment in this case is, therefore, bad in law. Accordingly, the impugned assessment order passed u/s.147 of the Act is hereby quashed. 4. In the result, the appeal of the assessee stands allowed.
Order pronounced in the Open Court on 19/01/2026. ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 19/01/2026 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS Savita Hemant Rathod vs. ITO Asst. Year : 2017-18