Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

February 2026

Re-opening of assessment — Findings given in Suspicious Transaction Report (STR) — No material or evidence to suggest escapement of income — No infirmity in documentary evidence furnished by the assessee — Re-opening of assessment merely on the basis of STR report is bad-in-law.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 3 mins
59. Vivaansh Eductech (P.) Ltd. vs. ACIT (2025) 181 taxmann.com 873 (Guj.) A. Y. 2021-22: Date of order 16/12/2025 Ss. 147, 148 and 148A of ITA 1961 Re-opening of assessment — Findings given in Suspicious Transaction Report (STR) — No material or evidence to suggest escapement of income — No infirmity in documentary evidence furnished by the assessee — Re-opening of assessment merely on the basis of STR report is bad-in-law. A notice u/s. 148A(1) of the Income-tax Act, 1961, dated 31/03/2025, was issued upon the assessee for AY 2021-22, requiring the assessee to show cause why the case of the assessee should not be re-opened u/s. 148 of the Act. In response to the notice, the assessee furnished a detailed reply objecting to the reopening of the assessment. Thereafter, vide order dated 19/06/2025, it was concluded that the income of ₹12,16,51,000 had escaped assessment and that the case of the assessee was fit for re-opening of assessment. The assessee filed a writ petition and challenged the said order. The Gujarat High Court allowed the petition of the assessee and held as follows: “i) A perusal of the impugned notice as well as the impugned order reveals that the respondent has formed such an opinion primarily on the allegation that the petitioner had entered into "circuitous" transactions with related parties. However, we do not find any material or evidenc
Read More
Download PDF

You May Also Like

Offences and prosecution — Criminal prosecution — Income surrendered during the assessment — Tax paid to buy peace and avoid further litigation — Penalty u/s. 271(1)(c) levied — Concealment of income — Appeal of the assessee allowed by the CIT(A) and ITAT — Department’s appeal before the High Court dismissed — Order of penalty does not exist — Criminal proceedings cannot be allowed to continue in such case.

Re-opening of assessment — Re-assessment in respect of transactions which were not mentioned in the show cause notice u/s. 148A — Explanation to section 147 — Re-assessment on a different transaction which was not intimated to the assessee in the show cause notice — Reassessment on issues which come to notice of the AO subsequently — AO can make assessment of such issues only after the re-assessment proceedings have commenced — Since the AO proceeded to issue notice u/s. 148 on an issue other than the issue mentioned in the show cause notice, re-opening held to be bad in law and the order u/s. 148A(3) and notice issued u/s. 148A quashed and set-aside.