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Facts
The assessee's case for AY 2015-16 was selected for reassessment under Section 148 concerning the purchase of immovable property (Rs. 54,48,060/-) and TDS payment (Rs. 33,47,450/-). Being a non-resident, the assessee did not file ITR or respond to various notices, leading the AO to make additions based on these amounts, despite the DRP's directions to consider submitted evidence.
Held
The Tribunal found the AO's additions unjust, unfair, unreasonable, and illegal, setting them aside. It recognized the assessee's reconciliation of payments through bank accounts in the US (State Bank of India) and India (Ahmedabad Branch), an HDFC Bank loan, and SBI NRE account for loan repayments. The Tribunal allowed grounds 1 to 5, while additional grounds 6.1 and 6.2 were dismissed as not pressed.
Key Issues
Whether the AO erred in making additions despite the DRP's directions and the assessee's explanations regarding the source of property investment, and the validity of reassessment proceedings initiated beyond the statutory period.
Sections Cited
147, 144, 194(1A), 142(1), 144C(13), 234A, 234B, 234C, 148, 148A(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES : D : NEW DELHI
Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR
ORDER PER VIMAL KUMAR, JM:
The appeal filed by the assessee is against the assessment order dated 12.12.2024 of the ld. AO/Asstt. Commissioner of Income-tax (hereinafter referred to as ‘the ld. AO’) u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’)
The brief facts of the case are that the case of the assessee was selected u/s 148 of the Act for purchase of immovable property amounting to Rs.54,48,060/- in assessment year 2015-16 and TDS statement of payment of consideration for immovable property u/s 194(1A) of Rs.33,47,450/-. The assessee neither filed ITR in response to notice u/s 148 nor submitted any details in response to notices u/s 142(1) of the Act. The details of opportunities given are as under:- Type of notice/ Date of notice/ Date of Response of the Communication communication compliance assessee received/ given not received 148 11.04.2022 One Month No reply furnished 142(1) 24.01.2023 03.02.2023 No reply furnished 142(1) 06.07.2023 21.07.2023 No reply furnished 142(1) 05.10.2023 12.10.2023 No reply furnished SCN 22.12.2023 08.01.2024 No reply furnished SCN 08.01.2024 10.01.2024 No reply furnished
On completion of proceedings, the ld. AO, vide order dated 21.12.2024, made additions of rs.54,48,060/- or TDS payment of Rs.33,47,450/-.
Being aggrieved, the appellant assessee has preferred the present appeal with the following grounds:-
“1. That the LD. AO has erred in the facts, the law, and the circumstances of the case that the source of the investments made for the purchase of the immovable property has not been fully disclosed and explained by the Appellant.
2. That the LD. AO has erred in the facts, the law, and the circumstances of the case by ignoring the documents filed by the Appellant as additional evidence and admitted by the Hon'ble Dispute Resolution Panel (‘Hon'ble DRP’) at the time of issuing the directions u/s 144C(13) to the Ld. AO.
3. That the Hon'ble DRP has erred in the facts, the law, and the circumstances of the case where it has admitted that the source of the investment in the registered property of Rs. 54,48,060/- has been explained and the payment during the year consideration has been made for the said property amounting to Rs. 33,47,450/-, however, it has mentioned at the same time that the Assessee has not filed the requisite documents to prove its intention.
4. That the Ld. AO has erred in the facts, the law, and the circumstances of the case by ignoring the directions of the Hon’ble DRP to take note of the documents filed by the Assessee and pass a speaking order in this regard.
That the Ld. AO has further erred in calculating and levying interest u/s 234A, u/s 234B, and u/s 234C of the Act which are not leviable on the facts of the instant case. The Appellant submits that each of the above grounds is independent and without prejudice to the other grounds of appeal preferred by the Appellant, The Appellant craves leave to add, amend, alter, vary, omit, substitute, or forgo any ground or grounds of appeal before or at the time of the hearing of appeal.”
5. Through an application dated 06.10.2025, the appellant sought admission of the following additional grounds:- “6.1 “That on the facts and circumstances of the case and in law, the assessment order passed is void ab initio as the same is without jurisdiction. The notice issued u/s 148, dated 11.04.2022 was beyond 3 years from the end of the AY 2015-16 even though the income escaped assessment does not exceed Rs. 50 lakhs or more. No notice u/s 148 can be 3 issued after 3 years from the end of the AY, when the amount of income escaped is Rs. 50 lakhs or more as per the provisions of the Income-tax Act, 1961.” 6.2 “That on the facts and circumstances of the case and in law, the assessment order passed is void ab initio as the same is without jurisdiction. The order passed u/s 148A(d) and further the notice issued u/s 148 is based on the borrowing satisfaction and no independent inquiry was made by the Ld. AO.”
The ld. AR, at the time of hearing, did not press the additional grounds. The ld. AR for the appellant-assessee submitted that the ld. AO failed to appreciate that the assessee filed additional evidence which was admitted by the DRP at the time of issuing directions. The source of investment in property of Rs.54,48,060/- had been sufficiently explained and the payment during the year was made in sum of Rs.33,47,450/-. The ld. AO passed the impugned order ignoring the directions of the DRP.
The ld. DR for the Revenue relied on the order of the Ld. AO.
From examination of the record in the light of the aforesaid rival contentions, it is crystal clear that the assessee is a non-resident and citizen of the United States. The assessee never provided any service in India in the AY 2015- 16. The ld. AO despite referring to the directions of the DRP regarding deletion, made additions of Rs.54,48,060/- or Rs.33,47,450/- for the reason that requisite documents did not prove the contention of the assessee.
In view of the above material facts, especially reconciliation of amount having paid through bank accounts maintained by the assessee in the State Bank of India in the United States and in Ahmedabad Branch, loan from HDFC Bank and repayment of loan instalments by the assessee from his SBI NRE account, the addition made by the ld. AO being not just, fair, reasonable, legal are set aside. The grounds of appeal No.1 to 5 are allowed. The additional grounds of appeal 6.1 and 6.2 being not pressed are dismissed.
In the result, the appeal of the assessee is partly allowed.