ITAT Quashes Reassessment Initiated on Mere Suspicion of Money Laundering Without Concrete Evidence [Read Order]
The tribunal found that the AO failed to establish any link between the assessee and the alleged transactions or entities
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The Delhi Bench of Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings initiated against the assessee, holding that they were based solely on suspicion of money laundering and lacked any concrete evidence. Amandeep Singh,appellant-assessee,filed the return of income on 14.10.2010 declaring ₹10.97 lakh. Later, the case was reopened under Section 148 based...
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings initiated against the assessee, holding that they were based solely on suspicion of money laundering and lacked any concrete evidence.
Amandeep Singh,appellant-assessee,filed the return of income on 14.10.2010 declaring ₹10.97 lakh. Later, the case was reopened under Section 148 based on information from the Deputy Director ofIncome Tax (DDIT) (Investigation), regarding suspicious transactions between related parties, suspected to involve money laundering. It was also noted that a CA, Tarun Goyal, was allegedly controlling multiple companies used in such transactions.
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After getting approval from the Pr. CIT notice under Section 148 was issued on 31.03.2017. The assessee responded to notices under Section 142(1) and submitted the required details. The assessment was completed on 29.12.2017.
The assessee filed an appeal before the CIT(A), which was dismissed.
The two member bench comprising Vikas Awasthy (Judicial Member) and S.Rifaur Rahman ( Accountant Member) found that the Assessing Officer (AO) started reassessment proceedings based only on suspicion from information about Tarun Goyal, a Chartered Accountant linked to money laundering. No solid evidence was shown connecting the assessee to Tarun Goyal or the related transactions. The assessee’s accounts already recorded these transactions.
The appellate tribunal noted that the reopening reasons related to companies, but the assessee was an individual with a proprietorship, and the AO did not explain how the transactions affected the proprietorship. The AO reopened the case without proper material, essentially conducting a roving inquiry.
The AO also did not address the main objections before reopening the assessment. Relying on a Delhi High Court ruling, the ITAT said suspicion alone cannot justify reassessment.
Because the AO lacked proper reasons and evidence, the tribunal quashed the reassessment proceedings as invalid.
Accordingly,the appeal was allowed.
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