EAPEN GEORGE,BENGALURU vs. INCOME TAX OFFICER, WARD INTERNATIONAL TAXATION 1(1), BENGALURU

Brief facts of the case shows that that assessee is a non-resident individual, case of the assessee was reopened u/s. 147 of the Act by issuing a notice u/s. 148 of the Act on 29/3/2023 on the basis of information received from insight Portal of CBDT. In reassessment proceedings, it was found that assessee has neither filed any return of income or replied to notices under section 142 (1) of the Act or to the show cause notices issued.

Thus, the ld. AO proceeded with reassessment proceedings on merits. The information was received through the insight Portal in accordance with the risk management strategy of the Central Board of Direct Taxes that assessee has entered into transactions amounting to Rs.1,46,37,018 which are mentioned at paragraph number 4 of the draft assessment order. As the assessee remained non-cooperative during the course of reassessment proceedings, the ld. assessing officer proceeded to pass the draft assessment order as per information available on record. The AO found that assessee has income from salary of Rs. 125,608/–, Interest income chargeable to tax under the head other sources as per provisions of section 56 of the Act of Rs. 10,833/–, short-term capital gain on sale of mutual funds of Rs.1,031,124/–. The AO further made an addition under section 69 of the Act of Rs. 13,469,453/– as per the assessment order dated 29/12/2023 determining total income of the assessee at Rs.14,637,018/–.

Assessee, aggrieved with the draft assessment order, filed an objection before the learned Dispute Resolution Panel and intimated the learned assessing officer on 22 January 2024 of filing such objection.

The learned Dispute Resolution Panel passed its directions on 9/9/2024. Before the learned dispute resolution panel assessee filed additional evidence which were not admitted by the learned dispute resolution panel. The learned dispute resolution panel found that objections were filed on 22/1/2024, however the additional evidence were filed only 27 days before the deadline of the DRP to issue directions which is expiring on 30/9/2024. The DRP also noted that at the time of hearing on 3/9/2024 the assessee pointed out that this additional evidence are part of the paper book filed along with form number 35A objections. The learned DRP did not consider those objections for the reason that assessee has not followed the procedure of filing the additional evidence as per the DRP rules and then rejected. Further when the additional evidence were applied for admission, the DRP stated that it is only 27 days left before the deadline of the DRP issuing direction and therefore the DRP does not have adequate time to obtain the factual comments and reports of the learned transfer pricing officer or learned assessing officer and therefore the additional evidence were not taken on record. The DRP further claimed that if additional evidence are taken on record without giving a chance to the learned assessing officer, it would violate the principles of natural justice.

Consequent to that, the learned assessing officer passed the final assessment order on 22/10/2024 determining the total income of the assessee at Rs.14,637,018.

Aggrieved with that, the assessee is in appeal before us.

It was submitted by the learned authorized representative that grievance of the assessee is that the total income of the assessee for the impugned assessment year is only Rs.33,710 which is below the basic exemption limit chargeable to tax and therefore assessee did not file any return of income. Further all communication by the learned assessing officer were sent to an inactive email ID and incorrect residential address. The actual salary income earned by the assessee is only of Rs.62,804/–, whereas the learned assessing officer has assessed it at Rs.125,608. The information obtained

The learned departmental representative vehemently submitted that the assessee was given several opportunities by the learned assessing officer, but did not take benefit of any of the opportunities and even did not file the return of income and therefore no fault can be found in the order of the learned assessing officer in passing the draft assessment order. The learned dispute resolution panel has also correctly did not admit the additional evidence as firstly no proper procedure was followed for making an application before the learned dispute resolution panel for admission of additional evidence. When the admission of additional evidence was applied before the learned DRP, there was no sufficient time left with the learned dispute resolution panel to IT(IT)A No.2126/Bang/2024 Page 9 of 11

We have carefully considered the rival contention and perused the orders of the learned lower authorities. In this case, admittedly, assessee is a non-resident. The case of the assessee was reopened based on the information available from Insight portal. Based on this, notice u/s. 148 was issued and further notices u/s. 142 (1) of the Act twice and a show cause notice was issued which were not complied with by the assessee. The claim of the assessee is that perhaps the notices were sent to an inactive email address. It is also shown that assessee already left India in 2019 and was not there in 2023 in India to comply with the notices. The assessee has filed objection before the learned dispute resolution panel and placed additional evidence along with the objection. As those objections were not in accordance with the rules of The Dispute Resolution Panel for admission of additional evidence, those were not admitted and adjudicated upon. Further the dispute resolution panel when presented with an application for additional evidence, it was rejected on the ground that only 27 days are left in passing the direction and therefore now the assessing officer could not be given any opportunity of verifying those additional evidence. Therefore,

In nutshell, the assessee did not get any effective opportunity of hearing before the learned assessing officer during passing of the draft assessment order and further when the assessee filed an objection before the learned dispute resolution panel. His contentions were not accepted as those were additional evidence and were not in compliance with the law.

Undisputedly, the assessee has been assessed without any opportunity of hearing including opportunity of placing the relevant documents before the learned lower authorities.

Undisputedly, nobody should be condemned unheard.

In view of the above facts, we restore the whole appeal back to the file of the learned assessing officer with a direction to the assessee to substantiate before learned assessing officer that there is no income chargeable to tax in the hands of the assessee in India except, the salary income and income from other sources which is stated to be in the computation of total income filed before the learned dispute resolution panel and further there is no income assessable u/s. 69 of the Act in case of the assessee. The ld. assessing officer may verify the same and decide the issue in accordance with the law, first passing the draft assessment order. The assessee may thereafter file an objection before the learned

In the result, appeal filed by the assessee is allowed for statistical purposes.