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Facts
The assessee, a proprietor engaged in export business, had declared income. However, the Assessing Officer (AO) initiated reassessment proceedings under Section 147 based on information regarding shipping bills for exports, treating a significant portion as unexplained credit. This was done despite the assessee's initial returns and a subsequent death of the original proprietor, leading to proceedings against the legal heir.
Held
The Tribunal, considering the voluminous additional evidence filed by the assessee and the submission that the original counsel was incapacitated, found that the evidence was crucial for proper determination. While rejecting some initial grounds, the Tribunal admitted the additional evidence and restored the matter to the AO for fresh consideration, granting the assessee one more opportunity.
Key Issues
Whether the reassessment proceedings initiated based on information from external sources, without proper verification and in the name of a deceased person, are valid? Whether the additional evidence, crucial for determining the actual export value, should be admitted and the matter remanded for fresh assessment?
Sections Cited
139, 147, 148, 144B, 69A, 115BBE, 271(1)(c), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY
2.0 Since the facts and the issues involved in the above captioned appeals are almost identical, therefore, they were taken up together for hearing and are being disposed of through this common order for the sake of convenience.
2.1 First, we will deal with the issues involved in the case of the assessee in for assessment year 2015- 16.
2.2 The brief facts of the case are that the assessee (Shri Rafeeq Ahmed Ansari) was the proprietor of the firm, M/s Bilal International engaged in the business of export of Durry, Carpets and Rugs. Initially, the firm, M/s Bilal International was a partnership firm, which was abolished and on 01.04.2007, the business of this firm was taken over by the assessee (Shri Rafeeq Ahmed Ansari). The assessee had filed the return of income for the year under consideration under section 139 of the Act on 08.10.2015, declaring a total income of Rs.19,93,760/-. On the basis of information in possession of the Income Tax Department that the assessee had received shipping bill for export, valuing at Rs.7,64,17,99,938/-, assessment proceedings under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) were initiated against the assessee after issuing notice under section 148 of the Act to the assessee. In response to the notice under section 148 of the Act, the assessee filed the return of income on 24.05.2021, declaring the same income as originally returned under section 139 of the Act, i.e., Rs.19,93,760/-. During the course of assessment proceedings, Shri Rafeeq Ahmed Ansari had died and, therefore, the notice was issued to the Legal Heir, Smt. Shakira Khatoon, requiring her to explain the transaction of Rs.7,64,17,99,938/-. In response, the assessee stated that the amount received against shipping bill of export does not tally with assessee’s record and requested to intimate the source of information. The assessee was intimated that the information has been received from CBIC. With regard to the transaction of Rs.7,64,17,99,938/-, no response has been filed by the assessee. The Assessing Officer (AO) noted that the assessee had shown turnover of Rs.7,13,95,171/- whereas as per the information available, the assessee had received shipping bill for export for Rs.7,64,17,99,938/-. Since there was no response from the side of the assessee with regard to the transaction of Rs.7,64,17,99,938/-, the AO treated the same as unexplained credit and was added to the income of the assessee under section 69A of the Act. The AO completed the assessment under section 147 read with section 144B of the Act, assessing the total income of the assessee at Rs.7,64,37,93,698/-.
2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271(1)(c) of the Act, separately.
2.4 In other assessment years too, i.e., assessment years 2016-17 and 2017-18, similar addition has been made by the AO, treating the receipts from shipping bill for export as unexplained credit and added to the income of the assessee under section 69A of the Act.
2.5 In assessment year 2016-17, the addition on this account was to the extent of Rs.7,37,90,47,355/- and in this year also the AO completed the assessment under section 147 read with section 144B of the Act, assessing the total income of the assessee at Rs.7,38,11,98,705/-.
2.6 In assessment year 2017-18, the addition was to the extent of Rs.7,23,72,59,107/- and in this year also the AO completed the assessment under section 147 read with section 144B of the Act, assessing the total income of the assessee at Rs.7,23,72,59,107/-.
2.7 Aggrieved by the orders of the AO, the assessee preferred appeals for these three years, i.e., assessment years 2015-16, 2016-17 and 2017-18, before the NFAC, which dismissed the appeals of the assessee and confirmed the orders of the AO.
2.8 Now, the assessee has approached this Tribunal challenging the orders of the NFAC, by raising the following grounds of appeal:
GROUNDS IN ITA NO.62/LKW/2024(A.Y. 2015-16):
That the Learned Courts Below are not justified in initiating proceedings U/s. 147/148/144B. That the Leaned Courts Below are not justified in Assessing the Income at Rs.7,64.37.93,698/- That the Learned Courts Below are not justified in basing their judgment on the information received from outsources. That the order passed by the Learned Courts Below is bad in law. That the findings of the Learned Courts Below are contrary to law and facts of the case. That the Income Assessed is highly excessive and may please be cancelled. That no specific findings have been given by the Learned Commissioner of Income Tax (Appeals) on the grounds taken in appeal. GROUNDS IN ITA NO.64/LKW/2024(A.Y. 2016-17):
That the Learned Courts Below are not justified in initiating proceedings U/s. 147/148/1448.
That the Leaned Courts Below are not justified in Assessing the Income at Rs.7,38,11,98,705/- That the Learned Courts Below are not justified in basing their judgment on the information received from outsources. That the order passed by the Learned Courts Below is bad in law. That the findings of the Learned Courts Below are contrary to law and facts of the case. That the Income Assessed is highly excessive and may please be cancelled. That no specific findings have been given by the Learned Commissioner of Income Tax (Appeals) on the grounds taken in appeal. GROUNDS IN (A.Y. 2017-18):
That the Learned Courts Below are not justified in initiating proceedings U/s. 147/148. That the Leaned Courts Below are not justified in Assessing the Income at Rs.7,23,72,59,107/- That the Learned Courts Below are not justified in basing their judgment on the information received from outsources. That the order passed by the Learned Courts Below is bad in law. That the findings of the Learned Courts Below are contrary to law and facts of the case. That the Income Assessed is highly excessive and may please be cancelled.
That no specific findings have been given by the Learned Commissioner of Income Tax (Appeals) on the grounds taken in appeal. 2.9 Subsequently, the assessee filed revised grounds of appeals, which are as under:
REVISED GROUNDS IN ITA NO.62/LKW/2024(A.Y. 2015-16):
1. That the Ld. Authorities below failed to appreciate that Notice issued u/s 148 of I. T. Act dated 30.03.2021 and Sanction u/s 151 of I. T. Act is given in name of "Rafeeq Ahmad Ansari", who already expired on 06.12.2018 and Ld. ACIT, Sitapur was aware as in the Proforma of Approval u/s 151 of I. T. Act he himself stated "Rafeeq Ahmad Ansari through Legal Heir Smt. Shakira Khatoon". Thus, issuance of Notice and approval u/s 151 of I. T. Act in the name of 'dead person' are invalid / void-ab-initio and subsequent Assessment order is also void ab initio.
2. That Ld. Authorities below failed to appreciate that after the death of Rafeeq Ahmad Ansari, his son became L/H for Income Tax Purpose and substituted in e-filing Portal. That Return in compliance to Notice u/s 148 of I. T. Act dated 30.03.2021 of Late Rafeeq Ahmad Ansari was filed through Tanveer Rafiq Ansari L/H Rafeeq Ahmad Ansari on 24.05.2021 from his e-profile Portal at PAN - ΑΒΚΡΑ4934E. However, Notice u/s 143(2) of I. T. Act dated 14.09.2021, subsequent notice u/s 142(1) and Assessment u/s 147 of I. T. Act dated 28.03.2022 has been made in the name of "Shakira Khatoon" through e-filing portal of L/H Tanveer Rafiq Ansari (Son), thus Notices u/s 143(2) and 142(1) of I. T.
Act and subsequent Assessment in the name of "Shakira Khatoon" is invalid as per Law.
3. That Authorities below failed to appreciate that initiation of Notice u/s 148 of 1. T. Act solely on the basis of information on Insight Portal without applying his own mind and without making an independent enquiry / verification and examination of Bank Accounts regarding correctness of highly excessive, fictitious Export Value of Rs.7,64,17,99,938/-, as Export Sales are Regulated through Indian Customs, RBI, DGFT and Bank Account, hence the initiation on fictitious information and passing of High Pitch Assessment Order are invalid as per Law.
4. The Authorities by upholding the highly excessive and fictitious addition of Rs.7,64,17,99,938/- w.r.t. "Receipts of Shipping bills for Export Value" u/s 69 of 1. T. Act on Incorrect Information of Insight Portal without appreciating that actual export and Sales were Rs.7,13,95,170/- as stated in the Audited Profit and Loss Account filed along with Return with Audit Report u/s 44AB of I. T. Act Further, Export Sales and Collections through Banking Channel are subject to verification, control of RBI, DGFT and Custom Department.
5. The Authority below had not followed the guidelines issued by CBDT (F. No. 299/10/2022-DIR(INV.III)/611 Dated 01.08.2022) where it is mandatory requirement for confronting the complete information and material. The same has not been provided by Ld. AO inspite of the request. Hence, the addition of Rs.7,64,17,99,938/- made in contravention of the said circular is bad in the eye of law.
6. The Ld. Authorities failed to confront the complete details of Insight Portal regarding alleged Export Sales of Rs.7,64,17,99,938/- inspite of our submissions. Further, without making any adverse comment on 26As, Audited Profit and Loss Account, Tax Audit Report u/s 44AB of I. T. Act and without specifying the details of Bank Account in which such highly excessive Export Sales Proceeds were credited as Export Sale and Receiving are regulated by RBI, Customs, and DGFT with Bank Account of Exporter.
7. The addition upheld is highly excessive, contrary to the facts, law and Principle of natural justice and without providing sufficient time and Opportunity to have its say on the reasons relied upon. REVISED GROUNDS IN ITA NO.63/LKW/2024(A.Y. 2016-17):
1. That the Ld. Authorities below failed to appreciate that Notice issued u/s 148 of I. T. Act dated 30.03.2021 and Sanction u/s 151 of 1. T. Act is given in name of "Rafeeq Ahmad Ansari", who already expired on 06.12.2018 and Ld. ACIT, Sitapur was aware as in the Proforma of Approval u/s 151 of I. T. Act he himself stated "Rafeeq Ahmad Ansari through Legal Heir Smt. Shakira Khatoon". Thus, issuance of Notice and approval u/s 151 of I. T. Act in the name of 'dead person' are invalid / void-ab-initio and subsequent Assessment order is also void ab initio.
2. That Ld. Authorities below failed to appreciate that after the death of Rafeeq Ahmad Ansari, his son became L/H for Income Tax Purpose and substituted in e-filing Portal. That Return in compliance to Notice u/s 148 of I. T. Act dated 30.03.2021 of Late Rafeeq Ahmad Ansari was filed through Tanveer Rafiq Ansari L/H Rafeeq Ahmad Ansari on 24.05.2021 from his e-profile Portal at PAN - ΑΒΚΡΑ4934E. However, Notice u/s 143(2) of I. T. Act dated 14.09.2021, subsequent notice u/s 142(1) and Assessment u/s 147 of I. T. Act dated 28.03.2022 has been made in the name of "Shakira Khatoon" through e-filing portal of L/H Tanveer Rafiq Ansari (Son), thus Notices u/s 143(2) and 142(1) of I. T. Act and subsequent Assessment in the name of "Shakira Khatoon" is invalid as per Law.
3. That Authorities below failed to appreciate that initiation of Notice u/s 148 of 1. T. Act solely on the basis of information on Insight Portal without applying his own mind and without making an independent enquiry / verification and examination of Bank Accounts regarding correctness of highly excessive, fictitious Export Value of Rs.7,37,90,47,355/-, as Export Sales are Regulated through Indian Customs, RBI, DGFT and Bank Account, hence the initiation on fictitious information and passing of High Pitch Assessment Order are invalid as per Law.
4. The Authorities by upholding the highly excessive and fictitious addition of Rs.7,37,90,47,355/- w.r.t. "Receipts of Shipping bills for Export Value" u/s 69 of I. T. Act on Incorrect Information of Insight Portal without appreciating that actual export and Sales were Rs.7,19,46,449/-, as stated in the Audited Profit and Loss Account filed along with Return with Audit Report u/s 44AB of I. T. Act Further, Export Sales and Collections through Banking Channel are subject to verification, control of RBI, DGFT and Custom Department.
5. The Authority below had not followed the guidelines issued by CBDT (F. No. 299/10/2022-DIR(INV.III)/611 Dated 01.08.2022) were it is mandatory requirement for confronting the complete information and material. The same has not been provided by Ld. AO inspite of the request. Hence, the addition of Rs.7,37,90,47,355/- made in contravention of the said circular is bad in the eye of law.
6. The Ld. Authorities failed to confront the complete details of Insight Portal regarding alleged Export Sales of Rs.7,37,90,47,355/- inspite of our submissions. Further, without making any adverse comment on 26As, Audited Profit and Loss Account, Tax Audit Report u/s 44AB of I. T. Act and without specifying the details of Bank Account in which such highly excessive Export Sales Proceeds were credited as Export Sale and Receiving are regulated by RBI, Customs, and DGFT with Bank Account of Exporter.
7. The addition upheld is highly excessive, contrary to the facts, law and Principle of natural justice and without providing sufficient time and Opportunity to have its say on the reasons relied upon. REVISED GROUNDS IN (A.Y. 2017-18):
That the Ld. Authorities below failed to appreciate that Notice issued u/s 148 of I. T. Act dated 30.03.2021 and Sanction u/s 151 of I. T. Act is given in name of "Rafeeq Ahmad Ansari", who already expired on 06.12.2018 and Ld. ACIT, Sitapur was aware as in the Proforma of Approval u/s 151 of I. T. Act he himself stated "Rafeeq Ahmad Ansari through Legal Heir Smt. Shakira Khatoon". Thus, issuance of Notice and approval u/s 151 of I. T. D Act in the name of 'dead person' are invalid / void-ab-initio and subsequent Assessment order is also void ab initio.
That Ld. Authorities below failed to appreciate that after the death of Rafeeq Ahmad Ansari, his son became L/H for Income Tax Purpose and substituted in e-filing Portal. That Return in compliance to Notice u/s 148 of 1. T. Act dated 30.03.2021 of Late Rafeeq Ahmad Ansari was filed through Tanveer Rafiq Ansari L/H Rafeeq Ahmad Ansari on 24.05.2021 from his e-profile Portal at PAN - ABKPA4934E. However, Notice u/s 143(2) of I. T. Act dated 14.09.2021, subsequent notice u/s 142(1) and Assessment u/s 147 of I. T. Act dated 28.03.2022 has been made in the name of "Shakira Khatoon" through e-filing portal of L/H Tanveer Rafiq Ansari (Son), thus Notices u/s 143(2) and 142(1) of I. T. Act and subsequent Assessment in the name of "Shakira Khatoon" is invalid as per Law.
That Authorities below failed to appreciate that initiation of Notice u/s 148 of I. T. Act solely on the basis of information on Insight Portal without applying his own mind and without making an independent enquiry / verification and examination of Bank Accounts regarding correctness of highly excessive, fictitious Export Value of Rs.723,49,57,637/-, as Export Sales are Regulated through Indian Customs, RBI, DGFT and Bank Account, hence the initiation on fictitious information and passing of High Pitch Assessment Order are invalid as per Law.
4. The Authorities by upholding the highly excessive and fictitious addition of Rs.723,49,57,637/- w.r.t. "Receipts of Shipping bills for Export Value" u/s 69 of I. T. Act on Incorrect Information of Insight Portal without appreciating that actual export and Sales were Rs.5,93,07,263/- as stated in the Audited Profit and Loss Account filed along with Return with Audit Report u/s 44AB of I. T. Act Further, Export Sales and Collections through Banking Channel are subject to verification, control of RBI, DGFT and Custom Department.
5. The Authority below had not followed the guidelines issued by CBDT (F. No. 299/10/2022-DIR(INV.III)/611 Dated 01.08.2022) where it is mandatory requirement for confronting the complete information and material. The same has not been provided by Ld. AO inspite of the request. Hence, the addition of Rs.7,23,49,57,637/- made in contravention of the said circular is bad in the eye of law.
The Ld. Authorities failed to confront the complete details of Insight Portal regarding alleged Export Sales of Rs. 723,49,57,637/- inspite of our submissions. Further, without making any adverse comment on 26As, Audited Profit and Loss Account, Tax Audit Report u/s 44AB of I. T. Act and without specifying the details of Bank Account in which such highly excessive Export Sales Proceeds were credited as Export Sale and Receiving are regulated by RBI, Customs, and DGFT with Bank Account of Exporter.
7. The addition upheld is highly excessive, contrary to the facts, law and Principle of natural justice and without providing sufficient time and Opportunity to have its say on the reasons relied upon.
3. At the outset, the Ld. Authorized Representative for the assessee (Ld. A.R.) has stated at the Bar that he does not wish to press the legal grounds viz. grounds No.1 and 3 in all the three appeals. Accordingly, Ground nos.1 & 3 in all the appeals are rejected.
3.0 On merits of the cases, the Ld. A.R., inviting our attention to the application for admission of additional evidences moved by the assessee under rule 29 of the ITAT Rules, 1963, which was received by the Registry of this Office on 07.05.2025, submitted that the Counsel, who was initially handling the legal matters of the assessee, was suffering from prolonged illness and later on detected with Cancer and Tuberculosis and that the assessee being not properly educated was also not aware about the taxation matters and, therefore, could not pursue the cases effectively before the lower authorities. The Ld. A.R. submitted that the additional evidences consist copies of export invoices along with supporting evidence of export of goods and export realization, bank statements, etc. and these documents contain some important facts relating to the cases of the assessee and prayed that the same may be admitted under Rule 29 of the I.T.A.T. Rules.
The Ld. CIT(D.R) had no objection to the admission of the additional evidences.
Having gone through the additional evidences filed before us, we are of the view that these evidences go to the very root of the matter and are germane to proper determination/assessment in the cases of the Assessee. Accordingly, we admit the same.
6. The Ld. A.R. further prayed that in the interest of natural justice, the matter may be restored back the file of the AO where all the aforesaid additional evidences shall be produced to prove the transactions entered into by the Assessee during the years under consideration.
The Ld. CIT(D.R) objected to the restoration of appeals to the file of the AO.
We have heard both the parties and have also perused the material on record. Looking into the facts of these cases, we are of the considered view that the Assessee deserves one more opportunity to present her cases and, therefore, in the interest of substantial justice, we restore these files to the Office of the AO with the direction to provide one more opportunity to the Assessee to present her cases. We have already admitted the additional evidences filed by the Assessee in the form of copies of export invoices along with supporting evidence of export of goods and export realization, bank statements, etc. under Rule 29 of the I.T.A.T. Rules. The Assessee shall produce them before the AO during the course of set aside proceedings. We also caution the Assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the orders in accordance with law, based on material available on record even if they are ex-parte qua the Assessee.
In the result, all the three appeals of the Assessee stand partly allowed for statistical purposes.
Order pronounced in the open Court on 19/12/2025.