MS. SUNIL GAJRAJ YADAV,MUMBAI vs. INCOME TAX OFFICER 42(3)(4), MUMBAI

In this appeal, the assessee has raised the following grounds: – “A) Reopening of assessment

The brief facts of the case are that the assessee is an individual. For the year under consideration, the assessee did not file his return of income. On the basis of the information received from High-Risk CRIU/VRU on ITBA portal that the assessee has entered into various non-genuine and unexplained transactions to the tune of INR 246,45,14,121, proceedings under section 147 of the Act were initiated, and a notice under section 148 of the Act was issued on 30/06/2022. In response to the notice issued under section 148 of the Act, the assessee filed his return of income on 20/07/2022, declaring a total income of INR 1,99,300. In response to the show cause notice issued during the reassessment proceedings, the assessee submitted that his PAN was misused without his knowledge and a bank account was opened in the Axis Bank fraudulently. The assessee further submitted that a CBI investigation has also been initiated, and during the same, the person who has forwarded the documents of the assessee has also admitted that the assessee was not aware of the transaction in the said account.

The Assessing Officer (“AO”), vide order dated 31/05/2023 passed under section 147 of the Act, disagreed with the submissions of the assessee and held that the assessee has never denied that he is not related to the entity M/s Ason Trading Co Ltd, whereas as per the information the assessee is a proprietor of the said concern. The AO further held that the assessee, despite claiming that the bank account was opened with a forged signature and that he had not opened it, never lodged a formal complaint/FIR against this fraud. The AO further noted that the assessee claimed that CBI investigations were carried out in November 2014, but has not furnished any documentary evidence that the assessee was involved in that investigation. The AO also held that the assessee did not furnish any documentary evidence which could prove that the company had misused the PAN of the assessee for opening the bank account with the Axis Bank. Accordingly, the AO held that there is nothing to prove that the PAN of the assessee was misused for the transaction made as per the information. Hence, the amount of INR 246,45,14,121 was held to be unexplained credit under section 68 of the Act and added to the total income of the assessee.

The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee by observing as follows: – “I have gone through the facts of the case, grounds of appeal, submissions of the appellant and the remand report, the emphasis of the appellant is on the fact that the account in the Axis bank was opened by forgery and he has no relation to it. I find that the appellant has filed Police complaint on 19.06.2023, compliant with bank on 12.06.2023and 23.08.2023 and that with Reserve Bank of India on also in July 2024 which has been registered on 15.07.2024. The assessment in this case was completed on 31.05.2023. The period concerned it F.Y. 2012-13. The first notice was issued on 30.06.2021. The appellant has submitted that he was aware of the CBI enquiry conducted in this case which dates back to first week of November 2014. Thus the complaints before Bank, Police & RBI appear just an afterthought to make a plea in the Income Tax Appellate proceedings and there is no application for admitting the additional evidences. Therefore, these new evidences in front of Police Complaint, RBI Complaint and Bank Complaint are not admitted under rule 46A of I.T. Rules. Further the appellant filed a copy of judgment of a tribunal (Appellate Tribunal Under prevention of Money Laundering, New Delhi, Judgment dated 19.08.2014 in case of S. Jagdisha V/s Joint Directorate of Enforcement). I find that there is mention of bank account No.9120200646228860 in Axis bank belonging to M/s Ason Trading Company wherein Rs.209,13,700/- were deposited during 16.02.2013 to 19.02.2103. However this order is regarding charges against Shri S. Jagadeesha but it nowhere discusses the rule of appellant and the benefit gained by him. The appellant has also enclosed a copy of order on Hon'ble High court of judicature at Madras in case of Shri Meghraj Jain. This is in connection with anticipatory bail and has no bearing on the case of the appellant. Further I find that there is no finding of any court in this case that the account has been fraudulently opened. The appellant has not filed any concrete finding of any authority to prove that the bank account did not pertain to him. Further not filing any complain with Police or Bank or RBI for almost ten years even after knowing about the bank account has not been explained by the appellant. Thus the onus to prove the credits in bank account in his name has not been discharged and therefore the Assessing Officer has rightly made the addition in this case. Therefore, the ground of appeal is not tenable and is dismissed. In result the appeal is dismissed.” Being aggrieved, the assessee is in appeal before us.

During the hearing, the learned Authorised Representative (“learned AR”), reiterating the submissions made by the assessee before the lower authorities, submitted that the assessee has no relation with M/s. Ason Trading Co Ltd. The learned AR submitted that the account with the Axis Bank was opened without the knowledge of the assessee, and the photocopy of his PAN card was misused. The learned AR also referred to the order passed by the Hon’ble Appellate Tribunal under Prevention of Money Laundering Act, New Delhi, to support the assessee’s claim that M/s. Ason Trading Co Ltd was a shell company which was not opened by the assessee and the same was under the control of someone else.

On the contrary, the learned Departmental Representative vehemently relied upon the orders passed by the lower authorities and submitted that in the absence of any tangible information in support of the assessee’s claim, the addition was rightly made in the hands of the assessee.

We have considered the submissions of both sides and perused the material available on record. The assessee is an individual who claims to be a salaried employee and was working with the BPO, drawing a monthly salary of INR 8000 during the year under consideration and since the total income was below the tax slab, as per the assessee, he did not file his return of income for the year under consideration. On the basis of the information received from High-Risk CRIU/VRU on the ITBA portal that a proprietary concern, namely M/s Ason Trading Co Ltd, having PAN details of the assessee, was involved in various non-genuine and unexplained transactions to the tune of INR 246,45,14,121, proceedings under section 147 of the Act were initiated. From the record, we find that it has been consistently the claim of the assessee that his PAN card was misused without his knowledge and a bank account in the name of M/s. Ason Trading Co Ltd was opened with the Axis Bank with his PAN details. It is evident from the record that during the reassessment proceedings, the assessee has brought to the knowledge of the AO that an investigation by the CBI has already been initiated in respect of the fraudulent transaction. However, the AO on the basis that the assessee has not filed any formal complaint/FIR against the fraud, and neither is there any documentary evidence that the assessee was involved in the CBI investigation, nor has the assessee produced any documentary evidence to prove that the company, i.e. M/s. Ason Trading Co Ltd has misused his PAN, made the impugned addition under section 68 of the Act.

We find that after the assessment proceedings, the assessee filed a police complaint on 19/06/2023, a complaint with the Axis Bank on 12/06/2023 and 23/08/2023, as well as a complaint with the Reserve Bank of India on 15/07/2024. However, the learned CIT(A) refused to admit this evidence on the basis that it is just an afterthought and there is no application for admitting the additional evidence. During the hearing, the learned AR also placed on record a follow-up letter dated 30/10/2024 filed by the assessee with the Axis Bank following up on his complaint regarding the fraudulent opening of the bank account with his PAN details by M/s Ason Trading Co Ltd. From the perusal of the order passed by the Hon’ble Appellate Tribunal under Prevention of Money Laundering Act, New Delhi, forming part of the paper book from pages 23-29, we find that M/s Ason Trading Co Ltd is mentioned as one of the entities through which RTGS transactions were alleged to be made and was involved in the offence of money laundering. We further find that in its remand report dated 03/10/2024, furnished before the learned CIT(A), the AO submitted that the details filed by the assessee during the appellate proceedings were already filed before the AO during the course of reassessment proceedings, and the issue of addition has already been considered by the AO. The AO further submitted that there is nothing new in the submission of the assessee, and the complaints filed by the assessee before the RBI, Axis Bank, and Police are in line with his earlier submissions.

From the perusal of the material available on record, we find that despite having all the details, there is no enquiry by the AO from the Axis Bank regarding the account opening by M/s Ason Trading Co Ltd using the assessee’s PAN card. The record is also completely silent on any notice under section 133(6) of the Act being issued to the Axis Bank seeking any information regarding the account opened by M/s Ason Trading Co Ltd. Further, despite having the details of the CBI case, the AO has not tried to obtain any information which may incriminate the assessee. Thus, it is evident that the AO did not conduct any independent enquiry and merely on the basis of the information available on the ITBA portal, made the impugned addition in the hands of the assessee. Accordingly, we deem it appropriate to restore the matter to the file of the jurisdictional AO for de novo adjudication after examination of all the details filed by the assessee, and necessary verification of all the details from the concerned bank and any other law-enforcing authority for complete adjudication of the issue at hand. Needless to mention, no order shall be passed without affording the reasonable and adequate opportunity of hearing to the assessee. Since the matter is restored to the file of the AO for consideration afresh, all the submissions/pleas of the assessee are kept open. Accordingly, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/05/2025