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Facts
The assessee received substantial interest income but did not file a return. The AO reopened the case under Section 147 and made an addition of Rs. 58,03,698. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal set aside the orders of the CIT(A) and AO, restoring the matter to the AO for fresh adjudication. This was to provide the assessee with a fair opportunity of hearing.
Key Issues
Whether the reassessment proceedings were validly initiated and whether the assessee was denied a fair opportunity of hearing.
Sections Cited
147, 148, 142(1), 144B, 250, 10(37), 57, 234A, 234B, 271(1)(c), 271(1)(b), 271F, 151
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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI VIMAL KUMAR
ORDER
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal by the assessee is against order dated 12.07.2024 of the Learned Commissioner of Income Tax (Appeals)/National Faceless Assessment Centre (NFAC), Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) arising out of order dated 22.03.2022 of the National Faceless Assessment Centre (hereinafter referred as “Ld. AO) under Section 147 r.w.s. 144 read with section 144B of the Act passed for assessment year 2016-17.
Brief facts of case are that as per information, the assessee had received interest of Rs.58,03,698/- during financial year 2015-16 corresponding to assessment year 2016-17. The assessee did not file return of income. Ld. AO reopened the case with necessary approval/sanction. Notice under Section 148 of the Act dated 27.03.2021 was issued. The assessee did not respond to notice. Ld. AO issued notice under Section 142(1) of the Act on 18.11.2021. No response was received to the notice. On completion of proceedings, Ld. AO vide order dated 22.03.2022 made addition of Rs.58,03,698. Against order dated 22.03.2022 of Ld. AO, appellant/assessee preferred appeal before the Ld. CIT(A) which was dismissed vide order dated 12.07.2024.
Being aggrieved, appellant/assessee preferred present appeal with the following grounds: “
1. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) ['CIT(A)'] erred on facts and in law in upholding validity of re-assessment proceeding initiated under section 147 through issuance of notice under section 148 of the Income Tax Act, 1961 ("the Act") and not quashing the same on the ground of being illegal, bad in law and void-ab-initio. 1.1. That on the facts and circumstances of the case and in law, the proceedings under section 147 of the Act ("Reassessment Proceedings") having been initiated on the basis of incorrect facts and without there being reason to believe that income of the appellant had escaped assessment, the impugned order is without jurisdiction, illegal. bad in law and liable to be quashed. 1.2. That on the facts and circumstances of the case and in law, the Reassessment Proceedings having been initiated merely on the basis of ex-parte information received, without any independent application of mind by the AO to such information and forming opinion thereof, is illegal, bad in law and liable to be quashed. 1.3. That on the facts and circumstances of the case and in law, reassessment order is illegal and bad in law, since: (a) reasons recorded have not been communicated along with the notice; and (b) proper and valid sanction for issuance of notice was not obtained under section 151 of the Act. On Merits
2. Without prejudice to the above, that the AO/CIT(A) erred on facts and in law in holding that payment received on account of compulsory acquisition of agricultural land constituted revenue receipt taxable under the Act
3. That on facts and circumstances of the case and in law, the AO/CIT(A) erred in not providing benefit under section 10(37) of the Act qua the receipt on account of compulsory acquisition of agricultural land.
4. In alternate and without prejudice to the above, the AO/ CIT(A) erred on facts and in law in not allowing the statutory deduction under section 57 of the Act.
5. That on the facts and circumstances of the case and in law, the reassessment order suffers from vice of computation defects including denial of credit qua pre-paid taxes.
6. That, without prejudice to the above, on the facts and circumstances of the case and in law, the AO erred in charging interest under sections 234A, 234B of the Act 7. That on the facts and circumstances of the case and in law, the AO erred in mechanically vaguely initiating penalty proceedings under Section 271(1)(c), 271(1)(b) and 271F of the Act.”
At the time of hearing, none appeared on behalf of the appellant/assessee. In grounds of appeal, it is mentioned that Ld. CIT(A) erred in upholding re- assessment order illegally. Re-assessment proceedings were initiated on basis of ex parte information.
Learned Authorised Representative for the Revenue submitted that assessee had not appeared before departmental authorities.
From examination of record in light of aforesaid rival contentions, it is crystal clear that appellant/assessee failed to appear in departmental assessment and appellate proceedings. Ld. CIT(A) vide ex parte order dated 12.07.2024 dismissed the appeal and upheld the order dated 22.03.2022 of Ld. AO. The appellant in grounds of appeal
has challenged reassessment proceedings initiated under Section 147 of the Act through notice under Section 148 of the Act on the basis of ex parte information.
7. In view of above material facts in interest of justice, it is considered expedient to set aside orders dated 12.07.2024 of Ld. CIT(A) and dated 22.03.2022 of Ld. AO and restore the matter to the file of Ld. AO for fresh adjudication after affording fair opportunity of hearing to appellant/assessee.