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Facts
The assessee, Takira Real Estate P. Ltd., did not file an income tax return for AY 2013-14. The assessment was reopened under section 147, leading to additions for fixed deposits and interest income under section 144 and 69 of the Income-tax Act, 1961. The assessee claims non-receipt of notices due to business closure and lack of proper service.
Held
The Tribunal noted that the assessee did not appear before the Assessing Officer and CIT(A). While the total interest income addition of ₹2,60,338 was questioned, Form 26AS indicated an interest income of ₹1,30,169. The Tribunal restored the matter to the Assessing Officer for fresh examination regarding the disclosure of fixed deposits and the correct interest income.
Key Issues
Whether the assessment order passed under section 144 r.w.s 147 was bad-in-law due to improper service of notices, and whether additions for fixed deposits and interest income were justified.
Sections Cited
144, 147, 69, 142(1), 131, 282
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “K (SMC
Takira Real Estate Pvt. Ltd. (assessee / appellant) is filed for A.Y. 2013-14, against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 8th December, 2023, wherein the appeal filed by the assessee against the assessment order passed by the Income Tax Officer, Ward 5(3)(3), Mumbai, (the learned Assessing Officer) under Section 144 read with section 147 of the Income-tax Act, 1961 (the Act) dated 12th December, 2019, was partly allowed. The assessee is “1. On the facts and the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in not quashing the assessment order passed by the Assessing Officer u/s 144 r.w.s 147 of the Income Tax Act, 1961 which is bad-in-law, illegal, unsustainable and void for the want of jurisdiction.
2 On the facts and the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in ignoring that all notices were served by the Ld. Assessing Officer in 2019 i.e. when the Faceless Assessment Scheme was not in vogue and all the notices were still sent by the Ld. Assessing Officer by electronic mode and no notice was served through physical means like registered post or through notice server, which was the procedure and practice under the law particularly under section 282 read with Rule 127 of the Income Tax Rules as interpreted by Hon'ble Punjab and Haryana High Court in CWP No. 21028/2023 delivered on 04.03.2024 in the case of Munjal BCU Centre Of Innovation And Entrepreneurship and thereby Ld. Commissioner of Income Tax (Appeals) not appreciating that the non- response by the appellant was due to lack of proper service and lack of reasonable opportunity of being heard.
4. On the facts and the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the additions made by the Ld. Assessing Officer amounting to Rs 14,69,566/-on account of time deposits held with Bank of Baroda as unexplained investments u/s 69 of the Income Tax Act, 1961 despite the fact that the appellant company had duly recorded the alleged time deposits in its books of accounts, which could not be produced due to non- receipt of notices.
5. On the facts and the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the additions made by the Ld. Assessing Officer of Rs 2,60,338/- (which is exactly double the actual amount) on account of alleged interest income earned during the captioned assessment year attributing the failure on the part of the appellant to provide form 26AS, whereas such data is already in the possession of the department and accordingly, the Ld.
The assessee aggrieved with that preferred the appeal before the learned Assessing Officer. The learned CIT (A) issued three notices to the assessee, except asking for adjournment on one occasion assessee did not comply with the notices. The learned CIT (A) passed an order on the merits confirming the action under Section 147 of the Act. He also confirmed the addition under Section 69 of the Act of ₹14,69,566/-. With respect to the addition of the interest income, as the assessee submitted in statement of facts that interest received on the fixed deposits is only ₹1,30,169/- in form no.26AS addition to that extent only that can be made, in absence of form no.26AS, he confirmed the addition of ₹26,03,338/- and directed the learned Assessing Officer to grant credit of TDS of ₹13017/-. Accordingly, the appeal of the assessee was partly allowed.
Aggrieved with the appellate order, assessee is in appeal before us. The assessee submitted that the business of the assessee is closed and therefore, the assessee did not receive the last two notices issued by the learned CIT (A). It was stated that as the business of the assessee is closed it did not have any staff to respond to the first notices and therefore, adjournment was sought. On the merits it was submitted that fixed deposit of ₹14,69,566/- added under Section 69 of the Income-tax Act, 1961 (the Act) is time deposit placed with Bank of Baroda in earlier years and
The learned Departmental Representative vehemently stated that the assessee did not respond to the notices before the learned Assessing Officer as well as before the learned CIT (A). Therefore, in absence of such information addition is correctly made.
We have carefully considered the rival contentions and perused the orders of the learned lower authorities. The assessee is a company who did not file return of income voluntarily. Even in response to section 148 of the Act, 142(1) and 131 of the Act, compliances were not made. However, in form no.26AS it clearly shows that assessee has received interest income only of ₹1,30,169/-. Therefore, the addition of the interest income of ₹2,60,338/- is correct. Even otherwise, the claim of the assessee is that fixed deposit is placed with the Bank of Baroda in earlier years which is reflected in his balance sheet despite this fact the addition is made under Section 69 of the Act.
In the result, the appeal of the assessee is allowed for statistical purpose as directed above.
Order pronounced in the open court on 24.07.2024.