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Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
Appeal in this case has been filed against the order dated 29.12.2023 passed by the ld. CIT(A) NFAC Delhi for assessment year 2016-17.
2. Grounds of appeal taken by the Revenue are as under:
“1. Whether the NFAC has erred on facts and in law by allowing the appeal of the assessee without appreciating the facts of the case.
2. That the NFAC has erred in law and facts by considering the entire assessment proceedings as Void-ab-Initio instead the same can be corrected by taking recourse to the provisions of Section 292B of the Act.
3. Whether the NFAC has erred in law by setting aside the findings of the AO and deleting the addition of Rs. 1,87,50,000/- made u/s 69 of the Income Tax Act, 1961 as the same remained unexplained during the assessment proceedings in that there are no evidences or findings that the said investments stood included in the books of accounts.
4. Whether the NFAC had erred on both facts and in law by allowing the claim of the assessee by stating that the capital gain has been disclosed by the assessee in the & Ors. A.Y. 2016-17 3 return of income for the A.Y. 2016-17, however the filing of return of income does not explain/prove the sources of investment and the total amount of investment amounting to Rs. 1,87,50,000/- still remains unexplained.
5. It is prayed that the order of the CIT(A)/NFAC be revoked and that of the Assessing Officer may be restored.
6. The appellate craves to add, to alter, or amend any grounds of the appeal raised above at the time of hearing.”
Brief facts of the case as per the assessment order passed by the A.O. is as under:
“In this case, Non PAN/AIR information was available with the Department that the assessee has purchased immovable property for a consideration of Rs. 1,87,50,000/- during the period 01.04.2015 to 31.03.2016 i.e. relevant to assessment year 2016-17. Since no return of income was filed for the year under consideration. Therefore, proceedings u/s 147 of the Income Tax Act, 1961 (herein the Act) were initiated in the case by issuing notice u/s 148 of the Act on 28.03.2021 after obtaining approval from the Worthy Pr. Commissioner of Income Tax-1. Chandigarh.
2. In response to Notice u/s 148 of the Act, the assessee failed to file his return of income for the assessment year under consideration.”
4. In the assessment order, the A.O. gave his findings is as under:
& Ors. A.Y. 2016-17 4 “As per the sale deed available with this office it is seen that the assessee purchased a residential house (30% share), H. No. 1008. Sector BC, built up on old plot No.
Sector BC, Chandigarh f or a consideration of Rs. 1,87,50,000/- on 27.07.2015 i.e. during the assessment year 2016-17. No explanation regarding source of these investments have been furnished. The onus was upon the assessee to prove the source of investment made by the assessee in purchase of the property supra. As such, the assessee has f ailed to discharge his duty and also failed to explain the source of these investment made by him; hence, the amount of Rs. 1,87,50,000/- remained unexplained and is deemed as unexplained of investment u/s 69 of the Act and is added to the taxable income of the assessee.”
Against the assessment order passed by the A.O. the assessee filed an appeal before the ld. CIT(A) NFAC. The ld. CIT(A) in the appellate order has given his findings on the issues as under:
“The assessment has been made on the assumption that the appellant is a non-filer and Non-PAN Entity, however, during the appellant proceedings, the appellant has furnished the copy of return of income f or A.Y. 2016-17, which proves that return of income was filed on 02.08.2016 vide acknowledgement number 365199220020816, declaring the total income of Rs.8,55,930/-, tax paid thereupon Rs.2.45.453/- and claimed refund of Rs. 1,46,380/- The appellant has submitted copy of computation of income where the purchase of property on which assessment has been made u/s.148 of the Act has been disclosed along with other details of purchase and sale of property in the Capital Gain head of income. Also, & Ors. A.Y. 2016-17 5 the Form 26AS is submitted where TDS details of this alleged property is available. Further, the Assessing Officer has not mentioned that notices were ever served.
2. However, the moot question is whether it is a case of non-filer and non-PAN case? The clear reply is NO. Therefore, the entire proceedings are Void-ab-Initio. Consequently, the assessment order is Nullified.”
We have considered the findings given by the ld. CIT(A) in his appellate order and we find that the issue of notice u/s 148 by the A.O. was not justified, in the sense that the assessee has filed a copy of return of income which was already filed before the A.O. before issuance of notice u/s 148. The A.O. had taken up this case as where according to him, no return of income was filed and no details of the purchases of property was shown but the assessee filed brief during proceedings before the ld. CIT(A) bringing it on record that the return was already filed before the A.O. wherein the details of the property, its purchases and deduction of TDS thereon was already on the record of the A.O.
Keeping in view these facts, we are of the considered view that the findings given by the ld. CIT(A) is very clear and categorical and it needs no interference.
& Ors. A.Y. 2016-17 6
There is a CO in this appeal and grounds of C.O. are reproduced as under:
“1. That the Commissioner of Income Tax (Appeals) has rightly held that the proceedings initiated u/s 148 of the Act were void-ab-initio in as much as the reasons recorded were based on incorrect facts as the assessee had f iled his return of income and was having a PAN and as such the order passed is correct in law and facts.
That the Commissioner of Income Tax (Appeals) has rightly held that the Assessing Officer has not mentioned if any notices were ever served on the assessee and as such in the absence of any service of notice, the assessment framed has rightly been nullified and held to be void-ab-initio.
3. That the Commissioner of Income Tax (Appeals) has rightly held that the appellant has submitted the computation of income wherein the purchase of property on which assessment was made u/s 148 has been disclosed under the head "Capital Gains" and as such the order passed is correct both in law and facts.
That the Commissioner of Income Tax (Appeals) has since annulled the assessment on correct appreciation of law and facts, the appeal filed by the revenue be dismissed.”
& Ors. A.Y. 2016-17 7 9. During proceedings before us the counsel of the assessee submitted that he is not pressing the C.O. Accordingly, the C.O. is dismissed as not pressed.
Accordingly, the Revenue appeal on the issues raised before the Tribunal are dismissed as well as CO is also dismissed.
In result, the appeal of the Revenue and C.O. are dismissed.