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Facts
The assessee, a Non-Resident Individual, made investments in HDFC Bank time deposits in FY 2017-18 but failed to file an Income Tax Return for AY 2018-19. The Assessing Officer initiated reassessment under Section 148A/148 and, due to lack of response, added Rs. 1.13 crore as unexplained money under Section 69A, which was upheld by the DRP.
Held
The Tribunal remitted the matter back to the Assessing Officer to consider additional evidences provided by the assessee to substantiate the time deposits and decide the case on merits. The additional grounds challenging the validity of the Section 148 notice were not adjudicated, becoming infructuous due to the remand.
Key Issues
Whether the addition of unexplained money under Section 69A was justified; and the validity of the notice issued under Section 148.
Sections Cited
144, 144C, 144C(13), 148, 148A, 148A(d), 69A, 115BBE, 151A, 151(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI VEERAVALLI DURGA RAO, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the final assessment order passed under section 144 r.w.s. 144C(13) of the Income Tax Act, 1961 (in short ‘Act’) dated 21.01.2025 vide DIN & Order No. ITBA/AST/S/144/2024- 25/1072391196(1) for the A.Y. 2018-19.
I.T.A.No.149/VIZ/2025 Garimella Venkata Appala Sarma 2. Briefly stated facts of the case are, assessee is a Non-Resident Individual and based on the Risk Management Strategy (RMS) data, it was noticed that assessee has made investment in time deposits with HDFC Bank during the F.Y.2017-18. It was also noticed that assessee has not filed return of income for the A.Y. 2018-19. Thereafter, Ld. Assessing Officer [hereinafter in short “Ld.AO"] following the procedure laid down under section 148A of the Act issued a show-cause notice to explain why the income has not escaped the assessment. Since assessee did not respond to the show-cause notice, Ld. AO considering the material on record passed order under section 148A(d) of the Act on 02.04.2022 with a prior approval of the Competent Authority. Thereafter, notice under section 148 of the Act was issued on 03.04.2022. Assessee has not filed return of income in response to the notice issued under section 148 of the Act. Since assessee did not respond to any of the notices, Ld. AO proposed to complete the assessment by adding an amount of Rs. 1,13,53,700/- as unexplained money under section 69A of the Act by issuing a draft assessment order under section 144C of the Act Vide DIN & Order No. ITBA/AST/F/144C/2023-24/1062057828(1) dated 05.03.2024.
Assessee, thereafter filed his objections before Dispute Resolution Panel (DRP) on 04.04.2024. DRP sought for the Remand Report from the Ld. AO with respect to the additional evidences submitted by the assessee. Ld. AO submitted the Remand Report on 29.11.2024. Considering the submissions, DRP agreed
Page No. 2
I.T.A.No.149/VIZ/2025 Garimella Venkata Appala Sarma with the findings of the Ld. AO by dismissing the objections raised by the assessee. Based on the directions of the DRP, Ld. AO passed the final assessment order giving effect to the direction of the DRP on 21.01.2025.
4. On being aggrieved by the final assessment order, assessee filed an appeal before us by raising following grounds of appeal: -
1. The order of the hon'ble Dispute Resolution Panel -1, Bengaluru is contrary to the facts and also the law applicable to the facts of the case.
The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.1,13,53,700 made by the assessing officer u/s 69A of the Act towards unexplained money.
3. The learned Commissioner of Income Tax (Appeals) ought to have held that the provisions of S.115BBE of the Act are not applicable to the case of appellant.
Any other ground may be urged at the time of hearing.”
The only issue raised by the assessee is with respect to sustaining the addition of Rs. 1,13,53,700/- made by the Assessing Officer as unexplained money under section 69A of the Act.
On this ground, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that assessee has filed necessary evidences before the Tribunal and pleaded that these evidences may be remanded back to the file of the Ld. AO for fresh consideration and decide the case on merits.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the orders of the DRP.
Page No. 3
I.T.A.No.149/VIZ/2025 Garimella Venkata Appala Sarma 8. We have heard both the sides and perused the material available on record. It is an admitted fact that the assessee has not appeared before the Ld. AO but has filed certain additional evidences which was considered insufficient by the DRP, accordingly, DRP dismissed the objections raised by the assessee vide order dated 23.12.2024. The only plea raised before us by the Ld.AR is to provide one more opportunity to the assessee to submit the additional evidences substantiating the time deposits made in the HDFC Bank Account. The additional evidences are enclosed in paper book – 2 from Page No. 58 to 85. In the interest of justice, we consider it deem fit to remit the matter back to the file of Ld. AO to consider the additional evidences and decide the case on merits in accordance with law. We also direct the assessee to appear before the Ld. AO and submit the relevant details without seeking unnecessary adjournments. Accordingly, the ground raised by the assessee is allowed for statistical purposes.
Further, assessee has raised following additional grounds in his appeal: -
“1. The notice dt.03.04.2022 issued u/s 148 of the Act is invalid as the same was issued by the JAO but not the FAO, in contravention of the provisions of S.151A of the Act and hence the notice is liable to be quashed as invalid. 2. The notice dt.03.04.2022 issued u/s 148 of the Act with the prior approval of PCIT in contravention of the provisions of S.151(ii) of the Act is liable to be quashed as invalid.”
Page No. 4
I.T.A.No.149/VIZ/2025 Garimella Venkata Appala Sarma 10. Since, original grounds are adjudicated by remitting the matter back to the file of the Ld. AO, additional grounds of appeal filed by the assessee becomes infructuous. Accordingly, the same are not adjudicated.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 13th May, 2025.