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Facts
The assessee is aggrieved by an order of the CIT(A) which set aside the assessment order and remanded the matter to the Assessing Officer for a fresh assessment. The original assessment order had added Rs. 24,40,000/- to the assessee's income as undisclosed investment in mutual funds, which the assessee claimed was made from her bank account. The assessee pleaded ignorance and lack of knowledge about such an investment.
Held
The Tribunal, in the interest of justice, deemed it fit to set aside the order of the CIT(A) which remanded the matter for fresh assessment. The appeal of the assessee was restored to the CIT(A) for effective adjudication, with a reasonable opportunity of being heard to be granted to the assessee.
Key Issues
Whether the CIT(A) was justified in remanding the matter for fresh assessment when the assessee claimed ignorance about the investment and alleged misuse of her PAN, and whether further investigation by the police was necessary?
Sections Cited
147, 148, 142(1), 143(2), 133(6), 271(1)(c), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM& SHRI NARINDER KUMAR, JM
vkns'k@ORDER PER: NARINDER KUMAR, Judicial Member. As to Why this appeal by the assessee?
Assessee is before this Appellate Tribunal, feeling aggrieved by order dated 23.10.2024, passed by Ld. CIT(A), NFAC, relating to the Assessment Year 2009-10, even when, while disposing of her appeal filed there, the remanded to the Assessing Officer for decision afresh.
Impugned order and outcome of appeal before Appellate Authority
Vide impugned order, Ld. CIT(A) while disposing of the appeal filed by the assessee, and remanding the matter to the Assessing Officer, directed that the Assessing Officer shall make fresh assessment order after providing sufficient opportunity of being heard and considering all the material facts and evidence, including the fresh material produced at the appellate stage .
What was the Impugned assessment order-that stands set aside?
The assessment order set aside by Ld. CIT(A) was passed by the Assessing Officer on 27.12.2016 computing the total income of the assessee at Rs. 25,13,480/-. The case of the department against the assessee is that she had invested in mutual fund, an amount of Rs. 24.40 lakhs and that no source of such investment of Rs. 24,40,000/- was filed by her, during assessment proceedings.
Arguments heard. File Perused.
Initiation of proceedings under section 147 and issuance of notice Under Section 148 notice u/s 148 of the Act was issued to the assessee on 29.03.2016.
Thereupon, the assessee furnished her return of income declaring the income of Rs. 73,480/- only.
Subsequently, when notices u/s 142(1) and 143(2) were issued to the assessee, she submitted her reply dated 09.11.2016.
As noticed above, case of the department against the assessee is that she was found to have invested in a mutual fund, an amount of Rs.
24.40 lakhs.
The plea put forth by the assessee in her reply was that of ignorance about any such investment in any mutual fund. She claimed to be operating only one bank account with State Bank of Bikaner.
Thereupon, show cause notice was issued to the assessee. Since, the Assessing Officer was not satisfied, impugned assessment order was passed by observing in para 5 as under:-
“5. Brief facts of the case are that as per the information available with this office it was observed that during the year under consideration the assessee invested Rs.24,40,000/- in purchase of units in mutual fund on dated 23/09/2008 from Karvy Computershare Private Ltd Karvy Co MPU Tershare Pvt. Ltd., 6 JA Tin Bagchi Road Kolkata West Bangal 700029.
Premlata Tibrewala vs. ITO However no source of such investment of Rs. 24,40,000/- has been filed by assessee till date. Since the assessee has failed to discharge her onus of proving the source of such investment of Rs. 24,40,000/- in purchase of units in mutual fund.
Therefore vide this office show cause letter dated 20.12.2016 assessee was asked to explain as to why the same may not be added in her income.
Considering all the facts and circumstances of the case I have no other alternative but to add a sum of Rs. 24,40,000/- into the total income of the assessee for tax purposes, being investment of Rs. 24,40,000/- from the undisclosed income, as no justification for source of such investment of Rs. 24,40,000/- has been furnished by the assessee despite providing ample opportunities to her.
The assessee has not furnished her particular of income correctly and thus tried to evade taxes. As such the case of the assessee also falls in the same category for which penalty proceedings under section 271(1)(c) of the IT Act, 1961 for concealing the particulars of her income and furnishing inaccurate particulars of her income are being separately initiated.”
Ld. CIT(A) disposes of the appeal filed against the assessment order
When the assessee was in appeal challenging the impugned assessment order, as already noticed above, Ld. CIT(A), NFAC, disposed of the same while issuing directions to the Assessing Officer to make fresh assessment.
Ld. CIT(A) observed in para 6.1 of the impugned order that on perusal of the submissions put forth by the appellant during appellate proceedings, it transpired that the appellant had brought new facts which proceedings.
As noticed above, even though the assessment order has been set aside and matter remanded back to the Assessing Officer for fresh decision, assessee has filed this appeal.
Contentions
Ld. AR for the appellant has submitted that in para 6.3 of the impugned order, Ld. CIT(A) observed that the assessment order was passed ex-parte as the appellant did not furnish any written submissions or evidence during assessment proceedings, but, actually it was not so, and that rather, the assessee had put forth her reply and relevant documents.
On the other hand, Learned DR for the department has referred to the observations made by the Assessing Officer and pointed out that even though the assessee initially participated in the assessment proceedings, by filing response and submitting some information and documents, ultimately, she remained non compliant, and as such the Assessing Officer observed that he had no option but to proceed ahead and frame the assessment order.
Discussion notices issued by the Assessing Officer, appearance on behalf of the assessee was put in the assessment proceedings and written reply, certain details with certain documents were furnished there.
But, when we refer to the subsequent paragraphs of the assessment order, it would transpire that there was non compliance on the part of the assessee at later stage of the assessment proceedings. The Assessing Officer had to observe that the assessee was intentionally avoiding compliance with various notices/letters..
From the assessment order, it can be gathered that for the first time, the assessee submitted her reply dated 09.11.2016 to the notices issued by the Assessing Officer.
Reply of the assessee has been reproduced at page 2 of the assessment order.
In this regard, relevant portion of the assessment order needs to be extracted. Same reads as:
“3. ………..On date of hearing assessee AR filed written reply stated in that "the assessee has never invested any such amount as given in the notice towards mutual funds. She has maintained the single bank, copy of pass book has been enclosed as Annexure-1.
Premlata Tibrewala vs. ITO As it is matter and the assessees has shifted her residence from Jaipur to Jhunjhunu. So unusually it has taken some time to produce the required documents.".
On 24.10.2016, Ld. CA of the assessee filed an application before the Assessing Officer for providing of reasons which led to issuance of notice u/s 148. At the same time, she pleaded ignorance about the investment in mutual fund.
At the same time, the assessee requisitioned details of the bank account from which the transaction had been made and also the details of Mutual Fund so that necessary action could be taken.
Assessing Officer has observed in the assessment order that copy of reasons recorded u/s 148 were provided to AR of the assessee immediately and case was adjourned to 11.11.2016. The Assessee does not dispute said observations.
On 11.11.2016, AR for the assessee requested for further details by pleading as under:
"As we have received the reason for the assessment proceedings for the A.Y. 2009-10.
In this matter as per our reply dated 24.10.2016. Assessee is unaware of such investment in Mutual fund of Rs. 24.40 lacs from her bank or De-mat account, we request your good self to kindly provide the complete details of such investment alongwith the details of bank or de-mate account, from which transaction had been done by the assessee.
Premlata Tibrewala vs. ITO Sir, These details are very much required as assessee is doubtful of such transaction done by her. In order to verify the transaction, we require these details."
In response to her application, copy of AIR was provided to the Assessee, through her AR, and case was adjourned to 15.11.2016. This fact is also not being disputed on behalf of the assessee.
Then, the assessee requested for adjournment on the ground that she being resident of Jhunjhunu, it was difficult for her to travel upto Jaipur continuously. She also pleaded that she was awaiting response from Karvey Computershare Pvt. Ltd. to her letter.
Then the proceedings were adjourned to 22.11.2016 and 5.12.2016.
It is in the assessment order that the office of Assessing Officer also took steps to collect information from M/s J.M. Financial Mutual Funds Mumbai and Karvy Computershare Private Limited, Kolkata . In this regard, notices u/s 133(6) were issued. There is nothing in the assessment order to suggest that the Assessing Officer was able to collect any response from the said company to the notices under section 133(6) of the Act.
On 5.12.2016, AR for the assessee submitted that she was still awaiting response from Karvey Computershare Private Limited. Accordingly, proceedings were adjourned to 14.12.2016. On the next date, the assessee filed an affidavit claiming that the assessee had not made such transactions and details thereof had been Premlata Tibrewala vs. ITO asked for. The assessee also requested the Assessing Officer to enquire from the bank, about transactions made, about the details of bank account number and the KYC form on the basis of which the account was opened.
Proceedings were then adjourned to 19.12.2016. On the next date, AR for the assessee requested for extension in passing of the assessment order. To enquire into the matter, the Assessing Officer then issued show cause notice to the assessee, as regards the above said units in Mutual Funds.
In this regard, the Assessing Officer made following observations: “During the year under consideration source of income of the assessee is interest income. In this case as per AIR Information assessee invested Rs. 24,40,000/- on 23.9.2008 in units of mutual fund filer Branch name of M/s Karvey Computershare Private Limited, Kolkata West Bengal, Filer TAN MUMJ09448A Filer name M/s JM Financial Mutual Fund, 5th floor, Apeejay House, 3 Dinshaw Vachha Road, Near KC College, Churchgate, Mumbai.
In view of above, as no details has been furnished by the assessee despite providing ample opportunities to her. You have failed to discharge your onus of providing the documents, details and information, I therefore propose to add Rs. 24,40,000/- in your returned income as undisclosed income from other sources. Hence you are hereby show cause as to why your income should not be calculated as under :-
Returned Income Rs. 73,480/- Add:-As discussed above undisclosed Income Rs. 24,40,000/- Total Income Rs. 25,13,480/-
In this context, you are requested to furnish your reply along with supporting evidence if any to this office on or before 26.12.2016. A formal Premlata Tibrewala vs. ITO notice u/s 142(1) is enclosed herewith for ready reference. If you fail to avail this opportunity, it will be presumed that you have nothing to say in this regard and assessment shall be finalized as per material available on records. Failing which your case will be decided u/s 144 of the IT Act, 1961."
From the responses of the assessee submitted to the Assessing Officer submitted from time to time, it transpires that she pleaded before him that she had never invested any amount, as was mentioned in the notice, towards Mutual Funds. She also claimed that she was maintaining only one account with State Bank of Bikaner. Copy of her pass book was also produced by her by way of an Annexure-1.
Ld. AR for the assessee has referred to copy of reply dated 18.10.2016 submitted by the assessee to the Assessing Officer, enclosing therewith copy of original pass book, bank ledger and narration to support her claim that she had only one bank account and that no investment was made by her in any such mutual fund.
As is available from the assessment order, copy of AIR was provided to the assessee but, the assessee, while filing written reply, sought then to 05.12.2016.
It is available from the assessment order that the Assessing Officer had called for information by issuing notices u/s 133(6) to M/s J. M.
Financial Mutual Fund and Karvy Computershare Pvt. Ltd. Reply from the 2nd mentioned company was still awaited, and as such proceedings were adjourned on 14.12.2016 and then to 19.12.2016.
This goes to suggest that the Assessing Officer took steps to collect requisite information.
In other words, even if the assessee had requested said company for requisite information, it cannot be said that the Assessing Officer did not take appropriate steps or that he hurriedly passed the assessment order without taking requisite steps. After all, period has been prescribed within which assessment proceedings are to be completed. Undisputably, the law does not empower the Assessing Officer to extend said period prescribed for completion of the assessment proceedings and passing of assessment order.
At page 18 of the paper book, appellant has filed copy of letter dt.
16.11.2016 submitted to Karvy Computershare Private Ltd., Kolkata vide person, who had made the transaction and copy of the PAN card, through which said transaction was done.