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Facts
The assessee, a Non-Resident Indian, transferred ₹1,10,00,000 from his NRO to NRE account. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, alleging escapement of income due to non-deduction of TDS. The assessee's appeal was dismissed ex-parte by the CIT(A).
Held
The Tribunal noted that a transfer between NRO and NRE accounts of the same assessee does not result in escapement of income. The AO's reasons for reopening the assessment were found to be invalid, especially since the Form 15CA was filed inadvertently on bank advice.
Key Issues
Whether the transfer of funds between an assessee's NRO and NRE accounts constitutes escaped income, justifying reassessment proceedings under Section 147.
Sections Cited
144B, 144, 147, 201(1)
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Income Tax Appellate Tribunal, ‘PATNA’ BENCH, PATNA
O R D E R Per Rajesh Kumar, AM:
This appeal preferred by the assessee against the order of the Commissioner of Income Tax, Appeal (hereinafter referred to as the “Ld. CIT(A)”] dated 19.12.2023 for the AY 2016-17.
At the outset, we note that there is a delay in filing the appeal by 371 days by the assessee for which the condonation petition has been filed. The reasons stated in the condonation petition stated the delay due to non- accessibility of the appellate order in the assessee's portal. To get the order in hard copy, an application was submitted before the learned Income Tax officer and was accordingly supplied a copy of the order. In view of this there was a delay which were beyond the assessee’s control.
After hearing both the parties and perusing the contents of the Condonation application filed by the assessee, we are of the view that
The assessee has assailed the assessment order passed u/s 144 read with section 144B of the Income-tax Act, 1961 (the Act) dated 29.03.2022, assessing the income at ₹1,10,00,000/-.
The facts in brief are that the assessee has not filed any return of income. As per information received from ITO (INTL), stating that assessee has not complied with the notices. It was further stated that the assessee has received ₹1,10,00,000/- in his bank account on account of transfer from a NRO (Non-Resident Ordinary) account to NRE (Non-Resident External) account, and no TDS was deducted and deposited on the transfer of the said amount during the F.Y. 2015-16 and accordingly, the income of the assessee has escaped of ₹1,10,00,000/- within the meaning of 147 of the act on account of failure on the part of the assessee to disclose fully and truly all material facts. Finally, the assessment was framed by making an addition of ₹1,10,00,000/- on the ground that no valid explanation was offered by the assessee in the assessment framed u/s 147 r.ws. 144 read with section 144B of the Act dated 22.12.2021.
Before the ld. CIT (A) the assessee did not appear as the assessee was residing outside India and was not served any notice and the order of assessment was affirmed by the appellate authority.
After hearing the rival contentions and perusing the materials available on record, we find that in this case, the assessee was non- resident Indian and has transferred his money from his NRO account to NRE account amounting to ₹1,10,00,000/-. According to the AO there was no deduction of tax at source and therefore, income has “"As per this office information, you have not complied during the verification of details furnished in Form-15CA proceedings u/s 201(1) of the Income Tax Act, 1961 in view of non-deduction of tax on transfer of Rs 1,10,00,000/- from NRO to NRE bank account, which was received from maturity of fixed deposit out of his taxable income for FY 2015-16 relevant to AY 2016-17. Thus it is believed that this amount has escaped assessment and chargeable to tax.”
We note that amount transferred from one account to another account of the same assessee would not result in any escapement of income. Therefore, reasons recorded by the ld. AO are itself wrong and invalid and so is the reassessment proceedings-initiated u/s 147 of the Act. In this case, we note that assessee has filed form 15CA inadvertently on the advice of bank from which the AO gathered this halfhearted information. Therefore, considering the facts of the assessee’s case, we are not in a position to sustain the invalid reopening of assessment and consequent assessment order. Though the appellate order as well as the assessment order have been framed ex-parte, but considering the apparent facts on record and open and shut case, we are not inclined to restore this case to either of the authorities below. Accordingly, we quash the reopening of assessment by the Assessing Officer. The appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 22.07.2025.