PARESHPARI PRAVINPARI GOSAI,MORBI vs. ITO WD-1 MORVI, MORVI

Therefore, on the basis of information received by the assessing officer, it was found that during the relevant previous year, the assessee has made investment of Rs.26,04,000/- by way of partner capital in a partnership firm/LLP namely, M/s. Lizzart Granito LLP. The assessing officer had observed that the income shown in the return of income does not commensurate with the investment made by the assessee. Accordingly, the notice u/s 148 of Income Tax Act, was issued to the assessee, on 11.06.2021, but the assessee did not comply to the said notice. Further, during the re-assessment proceedings the assessee had not complied to the notices issued u/s. 142(1) of the Income Tax Act including show-cause notices. Therefore, the Assessing Officer had passed Assessment Order u/s.147 r.w.s. 144 r.w.s.144B of the Income Tax Act making addition of Rs. 26,04,000/-, on account of unexplained investment u/s 69 of the I.T. Act for the A.Y. 2017-18.

Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal, before Ld.CIT(A), who has remitted the assessee`s case back to the file of the Assessing Officer, observing that as per the newly inserted proviso to section 251(1)(a) of the Act, the Commissioner (Appeals) in case of order of assessment made u/s 144 of the Act, may set aside such assessment and refer the case back to the assessing officer for making a fresh assessment. This proviso has been inserted in the Act, w.e.f. 01.10.2024.

Aggrieved by the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.

Shri Chetan Agarwal, Learned Counsel for the assessee, on the legal issue, argued that a notice u/s 148A(b) of the Act, dated 28.06.2022, was issued by the Assessing Officer, beyond the period of three years, that is, reopening of assessee`s case was done beyond three years. The learned Counsel submitted that as per section 149(1)(b) of the Act, the income chargeable to tax of Rs. 50 lakhs or more, should escape assessment, to reopen the assessee`s assessment. However, in assessee’s case income of Rs.26,04,000/- was escaped from assessment, as per the notice of assessing officer under section 148A(b) of the Act, dated 28.06.2022 (supra). Since the income, escaped from assessment is less than Rs.50 lakhs, as per assessing officer, therefore reopening of assessment of the assessee, under consideration, is beyond the period of three years, which is not permissible, hence assessment order may be quashed.

Shri Chetan Agarwal, Learned Counsel for the assessee, again stated that as per notice u/s 148A(d) of the Act, the sanction, under sub-clause-(ii) of section 151 of the Act, should be given either by Chief Commissioner or Principal Director General, because the assessment was being re-opened by the assessing officer after three years. Therefore, as per sub-clause-(ii) of section 151of the Act, Page | 3 the Assessing Officer has to take permission from Chief Commissioner/Principal Director General of Income-tax, or Chief Commissioner, which the assessing officer, has failed to do so. Hence, assessment order should be quashed, on this score.

On the other hand, the Ld. Senior DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in earlier para and is not being repeated for the sake of brevity.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. For the sake of clarity and also being pertinent, I reproduce below the notice issued by the assessing officer under section148A(d) of the Act: