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Income Tax Appellate Tribunal, I BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER (Assessment Year: 2016-17) Preity Zinta, 403, Parishram, Smt. Nergish Dutt Road, Bandra (West) - 400050 [PAN: AAAPZ2650B] …………… Appellant Vs Income Tax Officer, International Tax Ward (4)(3)(1), Mumbai, Room No. 1625, 16th Floor, Air India Building, Nariman Point, Respondent ……………. Mumbai - 400021 Appearance For the Appellant/Assessee : Shri Hiro Rai Ms. Ritu Punjabi For the Respondent/Department : Shri Anil Sant Date Conclusion of hearing : 07.07.2023 Pronouncement of order : 31.07.2023 O R D E R
Per Rahul Chaudhary, Judicial Member:
The present appeal is directed against the Assessment Order dated, 1. 23/01/2023, passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], as per directions, dated 31/12/2022, issued by the CIT(Dispute Resolution Panel-2), Mumbai-3 [hereinafter referred to as ‘the DRP’] under Section 144C(5) of the Act pertaining to the Assessment Year 2016-17.
(Assessment Year: 2016-17) The relevant facts in brief are that the Appellant, a non-resident 2. individual, filed her return of income for the Assessment Year 2016- 17 on 26/06/2016 declaring total income at INR 46,20,340/-. The return of income was processed under Section 143(1) of the Act. Subsequently, the case of the Appellant was reopened and Draft Assessment Order, dated 31/03/2022, was passed by the Assessing Officer under Section 147 read with Section 144C of the Act proposing an addition of INR 10,84,27,700/- under Section 68 of the Act. The Appellant filed objections before DRP challenging the proposed addition of INR 10,84,27,700/- under Section 68 of the Act as well as reopening of the assessment proceedings on account of lack of jurisdiction. Vide order, dated 31/12/2022, the DRP disposed off the objection filed by the Appellant. In compliance with the direction issued by the DRP, the Assessing Officer passed the Final Assessment Order, dated 23/01/2023, assessing the total income of the Appellant at INR 11,30,48,040/- after making the addition of INR 1,84,27,700/- under Section 68 of the Act.
Being aggrieved, the Appellant has preferred the present appeal 3. before the Tribunal.
When the appeal was taken up for hearing, the Ld. Authorised 4. Representative for the Appellant pressed into service Ground No. 2 & 3 raised in the present appeal which read as under:
“2. The resort to the provisions of section 147, the reopening of the assessment an also the final order of assessment are illegal, invalid and unjustified.
The learned DRP has not considered the objections of the appellant challenging the validity of the proceedings u/s 147 and also the order passed by the learned ITO. They failed to give directions in this regard. The final order of assessment is (Assessment Year: 2016-17) illegal, invalid and unjustified.” 4.1. The Ld. Authorised Representative for the Appellant submitted that while passing the directions, dated 31/12/2022, the DRP has failed to deal with the objections raised by the Appellant regarding jurisdictional challenge to initiation of reassessment proceedings under Section 147 of the Act. In this regard, the Ld. Authorised Representative for the Appellant referred to Ground No. 2 of the objections filed before the DRP and submitted that the DRP has failed to adjudicate upon the same. In view of the aforesaid, Ld. Authorised Representative for the Appellant submitted that issue relating to validity of initiation of reassessment proceedings under Section 147 of the Act should be remitted back to DRP for giving proper directions.
4.2. The Learned Departmental Representative after examining the directions issued by the DRP fairly accepted that the DRP has not decided Objection/Ground No. 2.
4.3. On perusal of Order, dated 31/12/2022, giving directions passed by the DRP under Section 144C(5) of the Act, the addition under Section 68 of the Act was directed to be deleted on merits by the Ld. DRP Member and therefore, objections relating to validity of reopening of the assessment under Section 147 of the Act were rendered to be of academic in nature and therefore, not adjudicated. However, other two Ld. DRP Members disagreed with the directions issued by the Ld. DRP Member, and issued certain directions to the Assessing Officer. However, while doing so the issue related to validity of reassessment proceedings under Section 147 of the Act was not adjudicated by the other two Ld. DRP Members. Accordingly, accepting the contention advanced on behalf (Assessment Year: 2016-17) of the Appellant, we remit the issue relating to validity of reassessment proceedings back to the file of Assessing Officer with the directions to the Assessing Officer to decide this issue afresh after taking directions from the DRP as per law since the directions, dated 31/12/2022, given by the DRP neither confirmed nor rejected the action of Assessing Officer of initiating reassessment proceedings. As regards adjudication on merits of the additions under Section 68 of the Act, the Assessing Officer is directed to reiterate the findings/adjudication on merits made in the Final Assessment Order, dated 23/01/2023, in compliance with the directions dated 31/12/2022 issued by the DRP. In terms of the aforesaid, Ground No. 2 & 3 raised by the Appellant are allowed while Ground No. 1, 4 and 5 raised by the Appellant are dismissed as being infructuous. All the rights and contentions of the parties are left open.
In result, the present appeal preferred by the Assessee is allowed 5. for statistical purposes.
Order pronounced on 31.07.2023.