SOURABH SHARMA,INDORE vs. NATIONAL FACELESS ASSESSMENT CENTRE DELHI, DELHI

the order bearing Number ITBA/NFAC/S/250/2024- 25/1074143686(1) dated 06.03.2025 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2016-17

Page 1 of 12 and the corresponding previous year period is from 01.04.2015 to 31.03.2016.

2.2 The brief facts of the case are as under:-

1. The assessee has made credits transaction of Rs.93,12,64,070/- (Rs.17,61,60,000/- + Rs.75,51,04,700/-)

in the current bank account maintained with Axis Bank and Page 2 of 12

Bank of Maharashtra during the financial year 2015-16 relevant to the Assessment Year 2016-17.

2. That accordingly, the case of the assessee was reopened

u/s 147 of the Act by issuing notice u/s 148 of the Act on 27.03.2023 on the basis of above information requiring him to file the return of income within 30 days in response to the notice u/s 148 of the Act. The notice was issued after duly following the procedure laid down u/s 148A of the Act.

3. That the Ld. A.O had given the following opportunities to the assessee which are enumerated as below:-

Type of Date of Date of Response of Date of Response type Remarks notice/ notice/ compliance the assessee response (Full/ part/ if any communi communicatio given received/ if adjournment) cation n not received received 148 27.03.2023 26.04.2023 No No 143(2) 09.06.2023 16.06.2023 No 142(1) 20.10.2023 03.11.2023 No 142(1) 07.11.2023 14.11.2023 No Show 20.11.2023 25.11.2023 cause letter No Show 01.12.2023 06.12.2023 cause notice u/s 144 No SCN 12.01.2024 07.01.2024 No Centralis 18.01.2024 ed No. JA50076 4608IN

4. That the Ld. A.O had proposed variation which are as under:-

“During A.Y. 2016-17, the assesse has made credits transactions of Rs. 93,12,64,070/- (17,61,60,000/- + 75,51,04,070/-) in current bank account maintained with Axis Bank & Bank of Maharashtra during the F.Y. 2015-16 relevant to A.Y. 2016-17. After following due process u/s 147, order u/s 148A(d) followed with notice u/s 148 of the Income Tax Act, 1961 was issued to the assesse as per above. In response, the assesse has filed return of income on 24.04.2023 and declared income of Rs. 2,62,890/- under the head salary and other sources. The case was reopened u/s 147 by issuing notice 148A of the I.T. Act on 27.03.2023”.

5. Accordingly for justification, of the income escapement in his hands during the A.Υ. 2016-17, notice u/s 142(1) was issued on 20.10.2023, which is reproduced as under:

“With reference to the assessment proceedings u/s 147 of the Income Tax Act, 1961 in your case for the A.Y. 16-17, you are requested to furnish the following information:-

1. Please also furnish the computation of income alongwith all the annexures to Audit Report, Balance Sheet and P&L Account and Notes on account for the A. Y. 2016-17 (if applicable).

2. Please furnish a brief note on activities carried out during the FY 2015-16 relevant to A.Y. 2016-17. Also furnish details of all sources of your income during the year.

3. Please furnish the details of all the bank accounts maintained by you during the year under consideration along with the copy of bank account statement of all the bank accounts for the period 01.04.2015 to 31.03.2016.

 Please furnish the source of each cash deposit and credit made in your above account along with documentary evidence.  Details and purpose of each debit entry along with documentary evidence.  You have also received the interest of Rs. 87,723/- from your bank, please explain the same. In response to this notice, the assesse did not make any compliance”.

12.01.2024 were issued fixing the case of assessee for hearing on 25.11.2023, 06.12.2023 and 17.01.2024 but the assessee did not respond within given time and date.

1. Complete description of issues involved (issue wise)

As per information available, the assesse has made credits transactions of Rs 93,12,64,070/- (17,61,60,000 75,51,04,070/-J in current bank account maintained with Axis Bank & Bank of Maharashtra during the F.Y. 2015-16 relevant to A.Y. 2016-17.

After following due process u/s 147,order u/s 148A(d) followed with notice u/s 148 of the Income Tax Act, 1961 was issued to the assesse as per above. In response, the assesse has filed return of income on 24.04.2023 and declared income of Rs. 2,62,890/- under the head salary and other sources.

 Synopsis of all submissions of the assessee relating to the issue and indicating the dates of submission. No compliance have been made by the assessee to the notices u/s 142(1) & Show cause notices of the IT Act issued to the assessee on 20. 11.2023, 07.11.2023, 20.11.2023 & 01.12.2023 for compliance on 03.11.2023, 14.11.2023, 25.11.2023 & 06.12.2023 respectively.

 Summary of information/evidence collected which proposed to be used against it (attach documents if required) Order u/s 148A(d) and other documents available on record Notice u/s 133(6) was also issued to Axis Bank & Bank of Maharashtra on 05.09 2023 asking for details of all bank accounts along with copy of account statements and received bank statement from both bank. Copy of bank statements and KYC documents are attached.

 Variations proposed on the basis of inference drawn: As per information available with this office, it is observed that the assessee has made credit transactions amounting to Rs. 93,12,64,070/- (17,61,60,000/- + 75,51,04,070/-) in current bank account maintained with Axis Bank & Bank of Maharashtra during the F.Y. 2015-16 relevant to A.Y. 2016-17. Further, assessee has also deposited cash amounting to Rs. 16,85,000/- in HDFC Bank Ltd. during the year. But, the assessee has failed to furnish any documentary evidence with regard to the above made credit transactions amounting to Rs. 93,29,49,070/- (17,61,60,000/- 75,51,04,070/- + 16,85,000/-) in current bank account maintained with Axis Bank & Bank of Maharashtra & HDFC Bank during the F.Y. 2015-16 relevant to A.Y. 2016-17in spite of allowing sufficient opportunities and time allowed as per above discussion.

Further, as per information on Insight Portal and it is observed that the assessee has made remittance to China in Indian currency amounting to Rs. 85,43,85,218/- for purchases during the year. After considering the above fact i.e. from remittance details, it becomes apparent the assessee is involved in some business during the year but the assessee has filed his return of income by declaring salary & other sources. Thus, in the absence of any explanation with supporting evidence, the assessee is hereby show caused as to why the above mentioned amount should not be treated as its turnover for the concerned year and the profit be estimated at Rs. 7,46,35,926/-i.e. @ 8% of 93,29,49,070/- as business income besides initiation of penalty u/s 271(1)(c) for concealment of Income of the I.T. Act. Penalty also initiated u/s 271B of the Income Tax Act for failure to get its accounts audited in time as required u/s 44AB of the Act. It is also observed that the assessee has earned interest income but failed to furnish any documentary evidence with regard to received interest on securities u/s 194A of Rs. 87,766/-during the year in spite of allowing sufficient opportunities and time allowed as per above discussion. Therefore in view of the above,

Page 6 of 12 the assessee is hereby show caused as to why the addition of Rs. 87,766/- be not made as your income from other sources besides initiation of penalty as per provisions of Income Tax, 1961. The assessee is again requested to furnish the complete reply/information in chronological order as called vide aforesaid notice, on or before the fixed date falling which, it shall be presumed that the assessee has nothing to say in the matter and further proceedings shall be concluded u/s 144 of the I.T. Act besides initiating penalty proceedings u/s 271(1)(b) of the I.T. Act.”

2.3 The Ld. A.O in the “impugned assessment order” has drawn the following conclusion:-

“The assessee did not avail even this last opportunity and had not made any compliance within the prescribed period. As such, I am left with no alternative but to frame the assessment ex-parte u/s 144 of the I.T. Act on the basis of the material and information available on record and to the best of judgment. In the absence of any reply/explanation alongwith supporting documents, it appears that the assessee has accepted the legitimacy of addition as proposed vide Show Cause Notice u/s 144 of the I.T. Act, 1961. dated 12.01.2024. Accordingly, credit transactions of Rs. 93,29,49,070/-(17,61,60,000/-+ 75,51,04,070/-) remained unexplained and treated as its turnover for the concerned year and profit be estimated at Rs. 7,46,35,926/-i.e. @ 8% of Rs. 93,29,49,070/- as business income besides initiation of penalty u/s 271(1)(c) for concealment of Income of the I.T. Act. Penalty also initiated u/s 271B of the Act for failure to get its accounts audited in time as required u/s 44AB. Besides above, the assesse has earned interest income amounting to Rs. 87,766/-but failed to furnish any documentary evidence with regard to received interest on securities u/s 194A. Therefore, interest of Rs. 87,766/- treated as income received from other sources and added to the income of the assessee besides initiation of penalty u/s 271(1)(c) for concealment of Income of the I.T. Act is also initiated separately. During the course of assessment proceeding, it is notice that the assessee failed to furnish the reply of the statutory notice issued time to time. Therefore, penalty proceeding u/s 271(1)(b) of the Income Tax Act is initiated separately”.

Page 7 of 12 2.4 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons are as under:-

2. The grounds taken under 148A vide Ground Nos. 2.1 & 2.2 were too dismissed vide para 8.1 of the “impugned order”

3. The ground No.1,3,4,5&6 too were dismissed on account of no response from the assessee v1, 8.2.2, 8.2.3 & 8.2.4 of the “impugned order”.

2.5 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in the Form No.36 against the “impugned order” which are as under:-

“1. That impugned order passed by the Ld. CIT(A) sustaining the order passed by the Ld. AO is bad in law, without jurisdiction, without considering the reason given for the adjournment on 04.02.2025. The time allowed for making compliance of notices was also very short. 2. The Ld. CIT(A) erred in not deciding the following grounds of appeal on merits:

1) That impugned order passed u/s 147 r.w.s. 144 and 144B by the National Faceless Assessment Centre, Delhi is bad in law, without jurisdiction, it is based on incorrect interpretation of law, moreover the facts have also been incorrectly construed.

2.1) On the facts and in the circumstances of the case and in law the Ld AO eared in re-opening the assessment on the facts which were already on record at the time of completing assessment u/s 143(3) dated 27.12.2018 and after satisfying with the reply of the assessee the Ld. AO has completed assessment on the returned income of Rs.2,62,890/-, thus the re-opening of assessment is mere change of opinion.

2.2) On the facts and in the circumstances of the case and in law, the Ld. AO eared in issuing notice u/s 148A(b) and 148 without examining assessment record of the assessment year from which it is clear that the case was selected for scrutiny on the same issue on which notice u/s 148A(b) and 148 is issued and the Assessing Officer completed the assessment after detailed examination of information in question.

3) That the Ld. AO has erred in not providing physical hearing by notice u/s 148A(b) and before issuance of notice u/s 148.

4) On the facts and in the circumstances of the case and in law, the Ld. AO erred in making addition of Rs.7,86,35,926/- by calculating 8% profit on turnover of Rs.93,12,64,070/- as appearing in the bank account of Axis bank and Bank of Maharashtra New Delhi which does not belongs to the assessee for which assessee has filed detailed reply alongwith the affidavit dated 13.12.2018 during the scrutiny assessment proceeding u/s 143(3).

5) On the facts and in the circumstances of the case. and in law, the Ld AO fail to appreciate the facts that in compliance to summon dated 24.02.2021 issued by the Ld. Dy. Director of Income Tax (Inv) by DIN & Notice No. ITBA/INV/S/131/2020- 21/1030955591(1), the assessee clarified that he has not made any transaction in foreign currency and after satisfying with the submission of the assessee no action is taken by the investigation wing.

6) On the facts and in the circumstances of the case and in law, the Ld. AO eared in making the addition of Rs. 87,766/- being variation in respect of issue of interest income without

Page 9 of 12 appreciating the fact that the assessee has already disclosed the interest income of Rs. 1,73,674/- in the return of income. 7) That on the facts and in the circumstances of the case and in law the National Faceless Assessment Centre, Delhi erred in charging interest u/s 234B at Rs. 2,45,49,520/-. The interest charged under the said section is very excessive and high”.

4. Observations,findings & conclusions.

Page 10 of 12 4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the “impugned order” basis law and by following the due process.

4.3 We basis records of the case and after hearing and upon examining the rival contentions are of the considered view that both the Ld. AR & Ld. DR are on same page/ Ad idem that the “impugned order” should be set aside and that the matter should be remanded back to the file of Ld. A.O so as to enable him to pass a fresh order on merits of the case. The assessee is hereby directed to cooperate with the department and to give all the material information, documents, papers etc. to the Ld. A.O so that correct computation and assessment of total income of the assessee can be done which would be exigible to tax.

4.4 In view of the premises drawn up by us, we set aside the “impugned order” and remand the case back to the file of Ld. A.O on denovo basis.

5.2 In view of the aforesaid the appeal of the assesse is allowed for statistical purpose. Order pronounced in open court on 21.11.2025.