Sujata Annadevara, vs. The Income Tax Officer,

Heard Sri A.V.Raghuram, learned counsel for the petitioner' Sri Vijay K.Punna, learned Senior Standing Counsel for Income Tax for the respondents/Revenue, and perused the record'

The brief facts of the case are ttrat, the writ petitioner is a non-resident Indian(NRI) having PAN No'AHGPA9656B; that she applied for tl-e said PAN, with address at Flat No'19, road No'5' Chandrapuri Colony, LB Nagar, Hyderabad, which is her aunt's house, while her permanent address is at Gl, Vishal Residency' Kothapet, Hyderabad. She had moved out to Singaporc in 2OO7 1 \ \

The petitioner further averred t-hat out o1.her savings, w.hich suflered tax in Singapore, transferred amount.s to her parents in India, who in turn withdrew the same and re.deposited, in, to her abovementioned bank accounts; that for the assessment year 2016-17, tf,re total cash deposits were Rs.41,,/6,S90/_ and there were two term deposits of Rs.9,OO,OOO/_ which u,as created by transferring cash of Rs.9,oo,0oo/- from her lrrtcl Bank Account No. O44OO1O75O3I/NRO on 18.05.2016 and alother term deposit with Andhra Bank for an ar,nount of Rs.5,O0,O0J /_, was created by transferring the earlier maturit-v of deposits ol F,-s.4,23,223/_ and Rs. I,OQ0OO/- credited to his Andlrra bank A/" No.3O23101OOO3O725, and that the said deposits were created by transfer deposit/maturity amount from the af<rrementioned bank accounts.

Petitioner furttrer averred that a show_carrse notice under Section 148A(SCN) of the Income Tax Act, l!)€il (for short.the ActJ, dt.03.03.2o23, was issued to her by the lst respondent stating that there were total transactions of Rs.ti€,,41,O53/ _ for the a assessment year 2OL6-t7 and that the writ Petitioner has not filed Returns for the said year calling upon t}.e petitioner to submit explanation and the petitioner has filed a letter, dt'08'03'2023, requesting a short time of 15 days, and thereafter, another notice, dt. 11.03.2023, was issued, to which the petitioner replied on L4.O}.2O23, stating that for the assessment yea-r 2OL6-17, total lrank transactions were only for Rs.42,76,590 /- ^nd that the term deposits were out of earlier credits in the bank accounts for the previous assessment year, and an amount of Rs'9,OO,000/- was included twice, and thus, as the total cash deposits were less than Rs.SO,O0,OOO /-, ttre same does not qualify for any revision under Section 149(1)(b) of the Act for ttre assessment for 2OL6-17 and requested to drop the proceedings. 6. petitioner further contended that the l"t resPondent having not been satisfied witJ: the explanations submitted by the petitioner has passed the impugned orddr r:nder Section 1a8A(d) of the Act on 30.O3.2023, and issued notice under Section 148 of the Act as the amount escaped from assessment to a tune of Rs.86,41,O53/-, which is more than Rs.5O,O0,OOO/-' -\ ) \

The l"t ground, urged by the leamerl counsel fior the petitioner, is that as the petitioner is a perrnalent resident of Hyderabad and the address mentioned in fl.rr: pAN is also at Hyderabad, the 1"t ::espondent, who is the auttori$r at Bangalore, lacks jurisdiction. 9' The 2'a ground urged by *re learned counser for the petitioner is that the lst respondent failed tq aIIord the petitioner a proper opportunit5r as mandated by Section l4€iA(b) of the Aet, as tJ.e notice issued to the petitioner was sen ec in tlee month Of April,2022 i.e., after tlle impugned order came trl be passed, and thus, the lst respondent has violated the priu<:iples of natural

The 3,u ground urged by the learned counsel for the petitioner is that only in order to bring the amount into the bracket of Section 149(1Xb) of the Act, the l"t respondent arbitrarily added the amount of Rs.9,OO,O0O/- twice and also Rs.5,OO,O@/-, which was- accounted fot in the previous assessment year and treated ttrem as deposits in her bank accounts; that neither the ICICI Bank nor ttre Andhra Bank of the petitioner reflects any such additional deposits; and that the respondents, without proper verification, only to bring under the ambit of Section 149(i[b) has included ttre amounts twice, which is impermissible and untenable.

As regards ttle l"t ground, learned cor:nsel for the petitioner contended that as the petitioner is a permanent resident of Hyderabad and as the address mentioned in the PAN is also at Hyderabad, the l.t respondent, who is the authority at Bangalore, lacks jurisdiction.

Insofar as the 2na glound, learned counsel for the petitioner contended that the l"t respondent faited to alford the petitioner a 1 ) \

Insofar as tJee 3-d ground, learned counsel Ibr the petitioner contended that the a.ssessment y-ear.pertains to 1r.016_17 and the period ends on 31 03.201 Z, and.un,lcr Section l ag(A)(d) of the Act tl-e perioct of issuance of notice .under Sectiorr 14g of the Act would end by 31.03.2020, anct only in order to lget into the ambit of Section 148A of the Act, the l"t responder:t arbitrarily and intentionally includ'ed the double reporting .in ttLe bank accounts of the petitioner, lithout appreciating the actua[ amounts, and arrived at a conclusion that tte arnount escaped fr-om assessment of Rs.86,41,053/- is over and above Rs.5O,OO;Oll)/_, and issued notice under Section 149 of the Act; directing thr: petitioner to file the Returns for the said year.

In s,pport of the above con.tc'tions, learne,l counsel for tl.e petitioner has placed-reliarce in Abdul Mqjeed v, ITOI, wherein the High.Court of Rajasthan at para 16 of the order held that though the competent authorit5r did not ,Ispute various | (20221 447 ITR 698 (Rajasthan)

It was further observed in the qaid decision that for invoking the provision under Section 148A(d) of the Act' where the authorit5l proPoses to issue notice under Section 148A of the Act : after three years elapsed, there should exist suffrcient material available on record to reach to thc conclusion that some income chargeabte under tax has escaped assessment, but the amount -" should be more than Rs.5o,00,ooo/-, and mere presumption that the assessee may have more bank accounts cannot be the expression tnaterial available on record', which would frustrate the object of incorporation of Section 148A of the Act'

Learned counsel for the petitioner further submits that tlte said decision app[es to the case of the petitioner aP in the instant case, the authority included ttre amount of Rs'9'OO'O00/- twice' for single transaction and also included the amounts shown as credit for the previous year, and as the actual amount deposited ') \

Per contra., the leamed Seni,or Standing Counsel appearing for respondents, as regards the first contenti()rr of the petitioner that the l"t respondent has no territorial jurisdiction to pass the impugned order, contends that at one point of time, the petitioner herself stated that she worked in Bangalore, and as such the l"t respondent has got territorial jurisdiction, and thus, the irnpugned order passed by the 1"t respondent cannot bc quashed on the ground of lack of jurisdiction. 18, As regards the second contention of fl-rr: petitioner that notice under Section 14gA(b) of the Act was not properly served on the petitioner, learned Senior Standing Counsel submitted that notices were duly served on the petitioner tlrrorrgtl her registered e-mail ID, which is suffrcient in terms of the prrt'isions of tJle Act and Rules made there under. Further, the nolices were sent to the petitioner both through her e_mail acldress and by post, at the recorded e-mail and postal address of the petitioner, and 9 therefore, the said contention of the petitioner is untenable, and hence, rejecGd.

As regards the third contention urged by the petitioner that the l"t respondent has erroneously included the double recordings to avoid tirnitation under Section 1a8(A)(d) of the Act and to get ttre petitioner into the ambit of Section l48A of the Act, learned SeniorStandingCounselcontendedtlratthel"trespondenthaving verified. the bank statements, came to a just and proper

We have taken note of ttre respective submissions made arrd perused the material on record.

As regards the first contention of the petitioner that the I't respondent lacks jurisdiction to pass the impugned order' it is to be seen that at some point of time, the writ petitioner was 10 gainfully employed in Bangalore, and though the address mentioned with pAN number was at HyderabaC, she herself stated that she made a request on 2g.03.2023 (witlr acknowledgment No.1159822 on O8.A4.2O2Al to the Income Tax OIIicer, International Taxation, Basheer Bagh, Hy,lerabad, seeking transfer,/migration of the pAN to the jurisdiction of the Income Tax Oflicer International Taxation, Koramangela, Bengaluru of Karnataka, but however, on 2I.04.2023 ,the said aurhority uide commrrnication, in DIN & Letter No.ITBA/.ADM /5/26/2023_ 24 / 1052255765( I ) closed the petitioner,s grievance directirrg her to approach the Commissioner of Income 1.ax (International Taxation)., Bangalore. Thus, in our consider,:cl opinion, ttre Ist respondent has jurisdiction to initiate proce,rdings against the petitioner for the disputed assessment year.

Insofar as the second ground. raised by th,: petitioner that no proper notice was served on the petitioner and nrr opportunity was given to prove tJle factual matrix of the case, it is settled position of law t-hat once the notice is taken out at the registered address as well as to the e-mail address of an assessee, il: is sufficient and deemed service under the Rules made under t.rr: Act, and in the 11 instant case, notice was served to the petitioner through registered e-mail ID. Therefore, this point is answered against the petitioner and this ground is rejected.

Coming to the last ground raised by tJ:e petitioner ttrat the assessment year 2OL6-17 would end on 31'03'2017' and as such the limitation for initiation of proceedings in terms of Section 1a9(1)(a) would conunence from 3l'O3'2O17 and end on 3L.o3.2O2o. The impugned proceeding dt'30'03'2023' is aJter lapse of (O3) years, and that only in the case of proceedings under Section 149(1Xb) of the Act, which is extacted hereunder' notice under Section 148 of the Act shall be issued for the relevant assessment year after three years' " l4g(ll - No notice under Section 148 shall be issued for tJle relevant assessment lrear - a) )ooo( b) if three years, but not more than ten years, have elapsed from the end of the relevaflt assessment year uniess the Assessing Offrcer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax' represented in the form of i) an asset, i0 expenditure, in respect of a. transaction orf in relation to an event or occaslon; or \ \

Insofar as the S.a contention of the petilioner, that the lst respondent has erroneously computed and in:ruded t].e double recordings in respect of fixed deposits in ICICI Bank of the petitioner of Rs.9,00,OOO/_(cash of Rs.9,OO,OOL/_ deposited and. th.e same u)as conuerted to Fixed. Deposit) on the same day and also in respect of opening of Fixed Deposit of Rs.5,OO,OOO/_ pursuant to the maturity amount of Rs.4,73,i,213/_, which vras previously accounted for as deposit for the cun:ent assessment 24. year

On a, bare perusal of the account statement: produced bJ, th" petitioner for the assessment year 2Ol6_L7, it zrppears that in 13 Andhra Bank (now Union Benk of India) Alc No' 3023101000}0725 in Kakaraparn: Branch, an amount of Rs.4,7 3,7 23 /-(032320 100035696) was credited into the account of petitioner on 02.02.2016 by virtue of closure of a term deposit and also an amount of Rs. 1,OO,0OO/- was deposited on 02.02.2016 uide transaction No.O3232OLOOO3I229 by virtue of closure of term deposit, which were accounted for in the previous assessment year, ald on the same day i'e', 02 '02'2016' an amount of Rs.5,OO,OOO/- was made as term deposit' As such, the said amounts cannot be treated as deposit for the assessment year 2OL6-17. Likewise, an amount of Rs'9'OO'OOO/- in the ICICI Bank A/c No.O44OO1OOOO43/NRE of the petitioner was shown to be deposited by way of cash and made a hxed deposit uid.e FD No.044013000162 on 18'05'2015, which were also inctuded twice for the assessment year 2016-17 , and all these amounts were treated as deposits by the l"t respondent in arriving at the arnount of Rs.86,41 ,0531 - for the assessment year 2OL6-17 ' which is not permissible and t-l1e authority ought to have properly examined the accounts and only such deposits, which are made in the assessment year should trave been taken white arriving at the conclusion. \ -\ \

Since, the aspect concerning the alleg:ct transactions of deposit require facfual verification by the As sessing Authority, being the fact-finding authorit5r, we are of the c.rLsidered view that it is a fit case to rerna,d trre matter to the I"t res,ondent, for fresh consideration and passing appropriate orders.

In the light of the above, we hereby par-tty alow the writ petition by setting aside trhe assessment order passed by the lst respondent vide DIN:ITBA/AST/F I L4BA/2022_231 tOSt684OS2 (i), dt.3O.O3.2023, and, remit the matter to the Ist respondent to consider the m aterial placed by Ore petitioner and re_veri$, ffis

Needless to say that the authority shall bear in mind the provisions of Section 1a9(1Xa) and 1a9(1)(b) of the Act in respect of the limitation to re-open the assessment order under question' No order as to costs. Asasequelthereto,miscellaneouspetitions'ifany'pending shall stand closed. K.BHAVANI SWAMY ISTANT REGIS //// SECTION OFFICER To The lncome Tax Officer, Ward- 1(1 ), lntemational T tion, BMTC Building, 80 15 Feet Road, 6th Block, Koramangala, Bengaluru, Karnataka - 560 095. The lncome Tax Officer, lntemational Taxation -1, 5th Floor, AaYakar Bhavan, yderabad - 500 O04 l.

Basheer Bagh, H

One CC to SRI A 4. One CC to SRI V

Two CD CoPies V.RAGHU RAM, Advocate IOPUCI IJHAY K.PUNNA, Advocate [OPUCI SA LS