KOMMA TULASI RAM KUMAR,VIJAYAWADA vs. INCOME TAX OFFICER, WARD (INTERNATIONAL TAXATION), VIJAYAWADA

3 ITA.No.203/Vizag/2024 Corporate Ward-18 (3), Chennai issued notice under section 143(2) of the Act, dated 24.09.2018 and subsequently, the case has been transferred to Income Tax Officer, [International Taxation], Vijayawada, without any formal order under section 127 of the Income Tax Act, 1961, which is evident from subsequent notice issued by the Income Tax Officer, [International Taxation], Vijayawada dated 27.09.2018 and subsequent assessment order passed under section 143(3) of the Income Tax Act, 1961 dated 11.02.2019. The assessee had also challenged the addition made by the Assessing Officer towards credit card payments and submitted that, the source for the credit card payment is, out of income declared by the assessee for the relevant assessment year. The learned CIT(A) after considering the relevant submissions of the assessee, rejected the legal ground taken by the assessee challenging the jurisdiction of the Assessing Officer i.e., Income Tax Officer, [International Taxation], Vijayawada on the ground that, the provisions of section 127 of the Income Tax Act, 1961 would apply only to those cases, where there is a transfer of case from one

4 ITA.No.203/Vizag/2024 jurisdiction to other and not transfer of jurisdiction of the assessee from one place to another. The learned CIT(A), however, held that, it is the assessee, who had filed his return of income with a wrong jurisdiction which is evident from ITR-1 filed by the assessee, where the assessee has filed return with Income Tax Officer, Non-Corporate Ward- 18(3), Chennai, even though, the jurisdiction of the assessee falls with Income Tax Officer, [International Taxation], Vijayawada. Since, the assessee himself has filed return with a wrong jurisdiction, the Assessing Officer has rightly transferred the case to the Assessing Officer having jurisdiction over the assessee and the Assessing Officer has issued notice under section 143(2) of the Act. Therefore the learned CIT(A) has held that, there is no merit in the ground taken by the assessee challenging the validity of jurisdiction of the Assessing Officer.

6 ITA.No.203/Vizag/2024 between the income earned and amounts spent for credit card payments.

9 ITA.No.203/Vizag/2024 9. We have heard both the parties, perused the material on record and the orders of the authorities below. There is no dispute with regard to the fact that, the assessee is a non-resident Indian and filed his return of income for the assessment year 2017-2018 with address D.No.6442, Ramalayam Street, Patamata Lanka, Vijayawada-520 010. But, the assessee has filed his return of income in Form ITR-1 with Income Tax Officer, Non-Corporate Ward-18(3), Chennai. The initial notice under section 143(2) of the Act, dated 24.09.2018 was issued by Income Tax Officer, Non- Corporate Ward-18(3), Chennai and said notice was generated electronically by the System on the basis of return of income filed by the assessee. Further, upon verification of relevant address given by the assessee and residential status, the Assessing Officer i.e., Income Tax Officer, Non-Corporate Ward-18(3), Chennai noticed that, the jurisdiction of the assessee falls with Income Tax Officer, [International Taxation], Vijayawada and therefore, the assessment record has been transferred to the Assessing Officer having jurisdiction over the assessee. The Income

10 ITA.No.203/Vizag/2024 Tax Officer, [International Taxation], Vijayawada issued notice under section 143(2) of the Act on 28.09.2018. Therefore, it is necessary for us to examine the legal ground taken by the assessee, in light of provisions of section 127 of the Income Tax Act, 1961 and in light of above facts.

11 ITA.No.203/Vizag/2024 Assessing Officer to another Assessing Officer for administrative convenience or for better management of the case, but, it is a case of transfer of assessment records to the Assessing Officer having jurisdiction over the assessee, which is based on the return of income filed by the assessee with his residential status and address. Although, the assessee’s jurisdiction falls under Income Tax Officer, [International Taxation], Vijayawada, but, the assessee has filed return of income with Income Tax Officer, Non- Corporate Ward-18(3), Chennai. Since the assessee himself has made a mistake or error in filing the return of income with incorrect jurisdiction, in our considered view, the generation of initial notice under section 143(2) of the Act by the Assessing Officer i.e., Income Tax Officer, Non- Corporatel Ward-18(3), Chennai and subsequent issue of notice under section 143(2) of the Act, by the Income Tax Officer, [International Taxation], Vijayawada cannot be considered as transfer of jurisdiction of the assessee to one Assessing Officer to another Assessing Officer. Therefore, we are the considered view that, there is no merit in the legal

12 ITA.No.203/Vizag/2024 ground taken by the assessee in light of certain judicial precedents including the decision of Hon’ble Calcutta High Court in the case of PCIT vs., M/s. Ojasvi Motor Finance Pvt. Ltd., [2023] 337 CTR 964 (Cal.) and thus, the grounds of appeal taken by the assessee are rejected.

11. Coming back to the addition made by the Assessing Officer towards credit card payment under section 69A of the Income Tax Act, 1961 as unexplained money. Admittedly, the assessee has made credit card payment of Rs.11,40,170/-, out of which, Rs.6,89,000/- has been paid in cash. The Assessing Officer made addition on the ground that, the assessee could not file any evidence to explain the source. Before the learned CIT(A), the assessee submitted that, out of total payment of Rs.11,40,170/-, a sum of Rs.4,51,170/- has been paid through proper banking channel, out of is known source of income including the income declared for the year under consideration. The learned CIT(A) has rejected the arguments of the assessee on the ground that, there is no one-to-one co-relation or nexus between the income

13 ITA.No.203/Vizag/2024 declared for the year under consideration and credit card payment. In our considered view, the reasons given by the learned CIT(A) is devoid of merit because, once the assessee has made payment through bank account, it is clearly evident that, the said payment is out of income declared for the year under consideration. The assessee had declared income of Rs.9,47,800/- for the year and consideration, whereas credit card payments to the tune of Rs.4,51,170/- has been made through bank account. Since, the income declared by the assessee is in excess of credit card payment through bank account, in our considered view, the explanation of assessee with regard to source for credit card payments should have been accepted by the Assessing Officer and the learned CIT(A). Therefore, we direct the Assessing Officer to accept the source to the extent of credit card payment made through bank account and delete addition of Rs.4,51,170/-.

14 ITA.No.203/Vizag/2024 declared for the year under consideration and past savings, but, going by the amount of income declared by the assessee, in our considered view, if we exclude the amount of drawings for his personal purposes, the remaining amount considered for credit card payments through bank account is sufficient enough to cover the income declared by the assessee. Therefore, in our considered view, the assessee is unable to explain the source for cash payment of Rs.6,89,000/- towards credit card payments. Thus, we are inclined to uphold the reasons given by the learned CIT(A) to sustain the credit card payment to the extent of Rs.6,89,000/- and thus, we direct the Assessing Officer to sustain the addition to the extent of Rs.6,89,000/- paid in cash for credit card payments.

Order pronounced in the open Court on 31.07.2025.