ASIA COKE PVT. LTD.,CHENNAI vs. DCIT, CORPORATE CIRCLE-1(1), CHENNAI

This appeal filed by the assessee is directed against the order dated 27.01.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19.

We find that this appeal is filed with a delay of 45 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, in the interest of justice, we condone the delay and admit the appeal for adjudication.

Ground No. 3 is raised challenging the action of the ld. CIT(A) in failing to appreciate the notice under section 148 of the Income Tax Act, 1961 [“Act” in short], was issued by the JAO instead of FAO.

We note that the Assessing Officer reopened the assessment to assess foreign remittance made and consequently, notice under section 148 of the Act dated 30.03.2022 and there was no response from the assessee. In response to the notice under section 148(A)(b) of the Act, the assessee has not filed any reply, since the assessee made foreign remittance of ₹.11,05,70,230/- and no return of income filed, the Assessing Officer passed the order under section 148A(d) of the Act dated 26.03.2022. The Assessing Officer issued notice under section 142(1) of the Act dated 06.10.2022 and in response to which, the submissions filed by the assessee are extracted at page 2 of the assessment order. Thereafter, the Assessing Officer issued show cause notice proposing to treat the foreign remittance as unexplained income of the assessee, against which, the reply furnished by the assessee are extracted at page 3 of the assessment order. The reply of the assessee that as per RBI norms, the parent company gives unsecured loans to its foreign subsidiaries and during the year its bank account turned NPA, it had remitted foreign loans through the assessee which is 100% subsidiary, but, however, the Assessing Officer did not accept the above submissions of the assessee for the reason that when the parent company and one of its subsidiaries had become NPA then how the other subsidiary i.e., the assessee company is surviving and had capacity to give loans to others in the form of foreign remittance and that too after receiving loans from others, as the assessee is having no business in the year under consideration. Moreover, the Assessing Officer observed that the creditworthiness or capacity of the lenders i.e., SVL Limited and Mr. R. Thiagarajan are not proved and accordingly, issued notice dated 08.03.2023 show causing the assessee as to why an amount of ₹.19,51,29,146/- should not be added to its total income under section 68 of the Act. Further, the genuineness of the transaction made in the form of foreign remittance of ₹.11,05,70,230/- remains unexplained and show- caused as to why the said amount should not be added to its total income on protective basis under section 69C of the Act. The Assessing Officer also proposed for disallowance of claim of expenditure to the tune of ₹.5,98,000/-. Since there was no response from the assessee, the Assessing Officer completed the assessment under section 147 r.w.s 144 r.w.s.144B of the Act dated 22.03.2023 assessing total income of the assessee at ₹.30,62,97,376/-, inter alia, making various additions as proposed in the show cause notice. The ld. CIT(A), by accepting the submissions of the assessee, allowed the claim of expenditure as well as deleted the addition of ₹.1,05,70,230/- and confirmed the addition of ₹.19,51,29,146/- made under section 68 of the Act.