WASEEM PASHA,MYSURU vs. ITO, INTL. TAXATION, WARD-1(1), BANGALORE

PDF · subscribers
ITITA 564/BANG/2025Status: DisposedITAT Bangalore09 January 2026AY 2016-1712 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted additional evidence submitted by the assessee, comprising Annexures 1 to 6, which were filed for the first time before the Tribunal. The Tribunal found good and sufficient reason for not filing these documents earlier, noting the assessee's non-resident status, business in Saudi Arabia, and lack of regular income in India, which made collation of details difficult. Since the Assessing Officer had not had an opportunity to examine these additional evidences, the Tribunal, in the interest of justice and fair play, remitted the entire issue in dispute back to the Assessing Officer for de novo consideration. The Assessing Officer is directed to consider the additional evidences and decide the issue in light of them, after granting the assessee a reasonable opportunity of being heard. The Tribunal expressly left undecided the substantive issue of the addition itself, pending the AO's fresh assessment.

What were the facts?

The assessee, Waseem Pasha, a non-resident, is appealing an order passed by the Income Tax Officer (ITO), Ward Intl. Taxation 1(1), Bengaluru, dated January 17, 2025, under Section 147 read with Section 144C(13) of the Income Tax Act, 1961, for Assessment Year 2016-17. The case was reopened based on information from the insight portal indicating the assessee paid Rs. 72,05,000/- for an immovable property. The assessee claimed the funds were from employment outside India and transfers from his Canara Bank account. The Assessing Officer (AO) found the sources of investment amounting to Rs. 76,80,995/- unexplained and proposed to tax it under Section 69 read with Section 115BBE. A draft order was passed, and the assessee filed objections before the Dispute Resolution Panel (DRP). The DRP directed the AO to proceed, noting the assessee had not furnished sufficient documentary evidence. The AO passed the final assessment order with the addition of Rs. 76,80,995/-.

What were the issues?

1. Whether the addition of INR 76,80,995/- as unexplained investment under Section 69 of the Act, and taxing it under Section 115BBE, is justified, considering the assessee is a non-resident and claims the source of funds is from outside India, exempt under Article 22 of the India-Saudi Arabia DTAA. Assessee's contentions: The assessee argued that the authorities were not justified in making the addition as the source of investment was income earned outside India, which is exempt under the India-Saudi Arabia DTAA. The assessee also contended that the evidence submitted was rejected on mere suspicion and surmise, and that interest under Sections 234A and 234B should be cancelled. Revenue's contentions: The revenue, through the Assessing Officer and the DRP, found the sources of investment unexplained, stating that the assessee failed to substantiate the same with relevant documentary evidence. The revenue did not explicitly name any authorities, circulars, or precedents in the provided text.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 143(2),Section 142(1),Section 69,Section 115BBE,Section 144C(1),Section 144C(2)(b),Section 144C(5),Section 144C(13),Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

Hearing: 13.10.2025Pronounced: 09.01.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of Income Tax Officer, Ward-Intl. Taxation 1(1), BLR dated 17/01/2025 vide DIN and order No: ITBA/AST/S/147/2024- 25/1072272730(1) passed u/s. 147 r.w.s 144C(13) of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2016-17.

2.

The assessee has raised the following grounds of appeal: -

1.

The order of the learned Assessing Officer in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 2 of 12 2. The authorities below are not justified in making an addition of INR 76,80,995/- u/s. 69 of the Act, being the cost of a residential site purchased during the year and taxing the entire cost of acquisition u/s. 115 BBE of the Act, under the facts and circumstances of the appellant’s case. 3. The authorities below have erred by considering the source of investment made in the immovable property as unexplained and from out of India failing to appreciate that the appellant is a Non-resident and as such could not be taxed under the provisions of Section 69 of the Act. 4. Without prejudice to the above, the appellant denies himself in the addition made u/s. 69 as unexplained investment in as much as the authorities below have failed to appreciate that the source of income for such investment is from income earned outside India and as such the same is exempt in terms of Article 22 of the India- Saudi Arabia DTAA. 5. Without prejudice to the above, the authorities have erred in rejecting the various evidence submitted merely on suspicion and surmise under the facts and circumstances of the appellant’s case. 6. Without prejudice to the above, the Appellant denies being charged to interest u/s. 234-A and 234-B of the Act, which under the facts and in the circumstances of the Appellant’s case deserves to be cancelled. 7. For the above and other grounds that may be urged at the times of hearing of the appeal, your Appellant humbly prays that the appeal many be allowed, and justice rendered.

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 3 of 12 3. The brief facts are that the case of the assessee was reopened u/s. 147 of the Act after following due procedure as envisaged u/s. 148A of the Act and accordingly a notice u/s. 148 of the Act was issued on 08/03/2023. In response to said notice, the assessee filed his return of income on 03/05/2023. Thereafter, the notices u/s. 143(2) as well as 142(1) of the Act were issued along with the Show cause Notice dated 24/02/2024 in which the assessee had made part compliances. In the instance case, specific information was disseminated through the insight portal in accordance with the Risk Management Strategy (RMS) formulated by the CBDT that the assessee had paid consideration for purchase of immovable property amounting to Rs.72,05,000/- to Mohd. Riyaz. During the course of assessment proceedings, the assessee claimed that the amounts were paid out of the income earned from employment outside India. It was also claimed that the amount had been paid out of transfers from Canara bank account maintained by him. The AO noticed that the evidences submitted by the assessee failed to substantiate the sources of investment made and accordingly the sources of investments made in the immovable property purchased amounting to Rs.76,80,995/- were found unexplained. In view of the above facts and there being no satisfactory explanation from the assessee as regards the source of investment made amounting to Rs.76,80,995/- being the value of investments made in immovable property purchased was proposed to be brought to tax as income u/s. 69 r.w.s 115 BBE of the Act and accordingly a draft order was passed u/s. 144C(1) of the Act proposing additions of Rs.76,80,995/- as the assessee is a non-resident and he qualifies as an eligible assessee u/s. 144C(15)(b)(ii) of the Act. Aggrieved by the proposed addition, the assessee exercised his right u/s. 144C(2)(b) of the Act in Form- 35A along with grounds of objection and statements of facts on 01/04/2024.

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 4 of 12 3.1 The ld. D.R.P-2 issued the directions u/s. 144C(5) of the Act on 10/12/2024, wherein it was observed that the assessee has submitted the same evidence as submitted before the AO. Further, the ld. D.R.P-2 observed that the assessee had been provided sufficient opportunity of being heard before the panel also, however the assessee had not furnished relevant documentary evidences that can prove the authenticity of sources of investment made in the purchasing the property and accordingly held that the objections of the assessee remain unexplained even before the D.R.P also.

3.2 As per the directions of the ld. D.R.P-2, Bengaluru, the AO concluded the assessment proceeding vide order u/s. 147 r.w.s 144C(13) of the Act dated 17/01/2025 with an addition of Rs.76,80,995/- as unexplained investment u/s. 69 of the Act on account of investment made in purchase of immovable property.

4.

Aggrieved by the order of AO passed u/s. 147 r.w.s 144C(13) of the Act dated 17/012025, the assessee has filed the present appeal before this Tribunal. The assessee has also filed an affidavit for admission of additional evidence in accordance with rule 29 of the Income Tax (Appellate Tribunal) Rules 1963 which are reproduced below for ease of reference and convenience:-

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 5 of 12

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 6 of 12

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 7 of 12

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 8 of 12

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 9 of 12

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 10 of 12

5.

Before us, the ld. A.R. of the assessee submitted that during the assessment as well as DRP proceedings, the assessee was unable to collate relevant details/confirmations in support of his contentions in respect of the above additions. He further submitted that the assessee has now been able to collate the documents mentioned in the accompanying application and is seeking to produce the same before us by way of accompanying application for production of additional evidence. In view of this, he submitted that the Tribunal being the ultimate fact-finding authority, it is a fit case for the

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 11 of 12 accompanying application to be allowed and the additional evidence to be admitted.

5.1 Further, the ld. AR submitted that the failure to produce the said evidences was neither willful nor deliberate. The evidences filed along with accompanying application are essential for adjudication of the issues in the present appeal. He submitted that if the assessee is not allowed to produce the documents specified in the accompanying application as additional evidence on his behalf, it will put him to irreparable loss and injury. On the other hand, no loss or hardship will be caused to the respondent if this application is allowed. He therefore, most respectfully prayed that this Tribunal be pleased to allow the accompanying application and allow the assessee to produce the documents specified in the accompanying application as additional evidence on his behalf in the interest of justice and equity.

6.

The ld. D.R. strongly opposed the admission of additional evidence at this stage.

7.

We have heard the rival submissions and perused the materials available on record. On admission of additional evidence, we find good and sufficient reason in not filing these additional evidences on earlier occasion before the lower authorities. It is submitted that the assessee is a non-Resident & engaged in the business of repairs and maintenance of Grease pumps, water pumps, submersible pumps etc. in Saudi Arabia. He did not have any regular source of income in India. Due to this reason, he was unable to collate relevant details/confirmations in support of his contentions in respect of the above additions. This being so, we admit these additional evidences produced before us marked as Annexure-1 to Annexure-6 accompanying the affidavit. After admitting the same,

IT(IT)A No.564/Bang/2025 Waseem Pasha, Mysuru Page 12 of 12 in our opinion, these additional evidences are filed for the first time before the Tribunal and the AO has no occasion to examine these additional evidences. Thus, in the interest of justice & fair play, we remit the entire issue in dispute to the file of the AO for de-novo consideration. The AO shall consider all these additional evidences and decide the issue in dispute in the light of above additional evidences in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

8.

In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 9th Jan, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 9th Jan, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →