KAMALJIT KAUR CHADHA,ANDHERI WEST vs. INCOME TAX OFFICERS, DELHI

4. Your appellant prays for deletion of addition of Rs. 1,14,95,000/- made as unexplained cash credit grant of permissible reliefs under the law your Hon. May deem fit and proper in the case.

5. Your appellant craves leave to add, alter, amend delete any of the above grounds of appeal

6. Your appellant prays for grant of stay as this is very High-Pitched Assessment without any basis or justification.

3 Kamaljit Kaur Chadha 2. The brief facts of the case are that the assessee lady was a non-filer u/s. 139 of the Act for the assessment year under consideration. The AO came to know that the assessee deposited cash to the tune of Rs. 7.7 Lacs with a bank and also deposited cash to the tune of Rs. 1,07,25,000/- alongwith interest income to the tune of Rs. 74,360/-. Consequently, a notice u/s. 148 of the Act was issued to the assessee vide dated: 31.03.2021. Further, notices u/s. 142(1) of the Act was issued on various dates for seeking information, but there was no compliance by the assessee. Ultimately, the case of the assessee was assessed u/s. 147 r.w.s. 144 and 144B of the Act at a figure of Rs. 1,15,69,360/-.

“Section - 147, Income-tax Act, 1961 - FA, 2023 60[Income escaping assessment.

147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other Explanation. —For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.]

Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year†, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure† on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts† necessary for his assessment, for that assessment year:

6 Kamaljit Kaur Chadha Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:

Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.

Explanation 1. —Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.

Explanation 2. —for the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: —

(a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax;

(b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;

(ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E;

(c) where an assessment has been made, but—

(i) income chargeable to tax has been under assessed; or (ii) such income has been assessed at too low a rate; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed;

(ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;

(d) Where a person is found to have any asset (including financial interest in any entity) located outside India.

Explanation 3.—For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148.

Explanation 4.—For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012."

“Section - 149, Income-tax Act, 1961 - FA, 2023 72[Time limit for notice.

(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c);

(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has †escaped assessment amounts to or is likely to amount to one lakh rupees or more† for that year;

(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.

Explanation. —In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section.

(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.

(3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year.

Explanation. —For the removal of doubts, it is hereby clarified that the provisions of sub- sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012."

9 Kamaljit Kaur Chadha opening of the case itself were unverified and vague. Moreover, the assessee fully participated in the proceedings before the Ld. CIT (A) and all the relevant information pertaining to the credits in her bank account were duly furnished. Based on above observation and time limit discussed in para 6 (supra), it is found that re-opening was time barred hence liable to be quashed. On merits also the assessee was able to discharge her onus beyond doubt. In the result, grounds taken by the assessee is allowed.