### Cash Withdrawals Supported by Books of Account Cannot Ipso Facto Constitute Escapement of Income

The petitioner filed its return of income for Assessment Year (A.Y.) 2018-19 on October 18, 2018, declaring an income of Rs. 2,96,58,640/-

On March 15, 2022, the respondent issued a Show Cause Notice under Section 148A(b) of the Income Tax Act, 1961, alleging that certain cash transactions suggested escapement of income

The petitioner submitted a detailed reply on March 17, 2022, providing its Bank Book, cash book, and ITR filings including the Balance Sheet and Profit and Loss Account to explain the transactions

Despite these submissions, the Assessing Officer issued an order under Section 148A(d) and a subsequent notice under Section 148 on March 29, 2022, to reopen the assessment

The petitioner challenged these proceedings via a writ petition.

Whether the Assessing Officer had the jurisdiction to reopen the assessment under Section 147 of the Act when the assessee had provided documentary evidence explaining the cash transactions

Whether the failure of an assessee to provide a specific "clarification from the Bank" regarding reported transactions is sufficient grounds to conclude that income has escaped assessment

The court primarily applied Section 147 and Section 148A of the Income Tax Act, 1961.

Section 147 empowers the Assessing Officer to reopen assessments if any income chargeable to tax has escaped assessment

However, the court emphasized that such power must be exercised within the jurisdictional "contours" of the Act, meaning there must be a rational nexus between the material available and the belief of escapement

The court found that the Assessing Officer acted without jurisdiction by ignoring the comprehensive evidence submitted by the petitioner

While the respondent admitted that the petitioner furnished the Bank Book, ITR, and Balance Sheet, the assessment was reopened solely because the petitioner did not provide an additional "clarification from the Bank"

The court reasoned that the nature of the transactions was already explained through the petitioner's books of accounts.

It held that the Assessing Officer failed to appreciate the actual nature of the transactions and that the absence of a bank clarification does not *ipso facto* (by the fact itself) lead to a legal conclusion that income has escaped assessment

The court held that the reopening of the assessment was "misplaced and de hors the provisions of section 147 of the Act" as the Revenue failed to prove escapement of income after the petitioner had explained the cash transactions

Rule was made absolute