BALAKUMAR VARAVARA SETHUMADHAVAN,KOCHI vs. THE ITO INT.TAXATION, KOCHI

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ITA 197/COCH/2023Status: DisposedITAT Cochin14 August 2024AY 2014-15Bench: SHRI CHANDRA POOJARI (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)7 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order was passed beyond the time limit prescribed under Section 144C(13) of the Income Tax Act, 1961. The DRP's directions were received by the AO on December 27, 2022, but the assessment order was passed on February 20, 2023, which is beyond the one-month period.

What were the facts?

The assessee, a Non-Resident Indian, did not file his return of income. The Assessing Officer (AO) initiated reassessment proceedings and made an addition of Rs. 16,09,540/-. The assessee's objections before the Dispute Resolution Panel (DRP) were rejected, and the AO passed the final assessment order.

What were the issues?

Whether the assessment order passed by the AO was barred by limitation as per Section 144C(13) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 144C,Section 144C(13),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI CHANDRA POOJARI & SHRI SOUNDARARAJAN K.

For Respondent: Shri Sanjit Kumar Das, D.R
Hearing: 11.07.2024Pronounced: 14.08.2024

Date of Hearing : 11.07.2024 Date of Pronouncement : 14.08.2024 O R D E R PER SOUNDARARAJAN K., JUDICIAL MEMBER:

This is an appeal filed by the assessee challenging the order passed by the ld. AO dated 20.2.2023 on the directions of ld. DRP vide their order dated 26.12.2022 for the AY 2014-15.

2.

The assessee is a NRI and he has not filed his return of income. The ld. AO based on the information gathered by him about the purchase of immovable property and the payments made in respect of the transfer of immovable property, issued a notice u/s 148 of the Income Tax Act, 1961 (in short “The Act”) and thereafter notices u/s 142(1) of the Act were issued. Subsequently, the assessee filed his return of income on 5.3.2022 and after giving necessary opportunity to the assessee a draft assessment order u/s 144C of the Act was passed by the ld. AO in DIN & Order No.ITBA/AST/F/144C/2021- 22/642269654(1) dated 31.3.2022 in which he had made an addition of Rs.16,09,540/-. The assessee filed his objections before the ld. Balakumar Varavara Sethumadhavan, Ernakulam Page 2 of 7 DRP-2 Bangalore and thereafter the ld. DRP after hearing the petitioner and after getting the remand report from the AO, had issued a direction vide their order dated 26.12.2022 in which the following direction has been issued: 2.5 This panel has carefully considered the objections of the assessee’s written submissions and the Remand report of the AO dated 07.12.2022. From the Remand report of the AO, it is clear that the assessee could not substantiate his claim of additional amount ofRs.22,00,000 was paid over and above, the recorded value is not proved. This panel agrees that even though the assessee has withdrawn the amount on the same day of purchase, it cannot merely be concluded that the sum has been used for the finance the purchase of property. In the absence of concrete evidence in support of assessee's claim, the objection of the assessee is not tenable. Hence, this panel finds no infirmity in the action of the AO. Accordingly, the ground of objection is therefore rejected.

2.1 It is seen from the intimation sent by the ld. DRP, the directions were forwarded to the ld. AO on 26.12.2022 itself. Thereafter, the ld. AO followed the directions of the ld. DRP and made the assessment u/s 147 r.w.s. 144C(3) of the Act on 20.2.2023. Against the orders of the ld. AO, the assessee preferred this appeal before this Tribunal by raising the following grounds:

2.2 At the time of hearing, the ld. A.R. made an endorsement to the effect that they have not pressed ground No.1 and therefore, the same is dismissed as not pressed. 2.3 The ld. A.R. further strongly objected that the assessment order is barred by limitation for the reason that the direction of ld. DRP was received by the AO on 27.12.2022 and in support of this argument, the ld. A.R. also filed a paper book enclosing the copy of acknowledgement downloaded from the e-mail address of the assessee as well as the ld. AO. 2.4 The ld. A.R. therefore contended that as per section 144C(13) of the Act that the time limit for passing the assessment order is within one month from the end of month in which the acceptance is received or the period of filing of objections under sub-section (2) expires. The ld. A.R. brought to our notice that the ld. DRP direction was received by the ld. AO on 27.12.2022, whereas the assessment order was passed on 20.2.2023 and submitted that the same is clearly barred by limitation and prayed to allow the appeal.

3.

The ld. D.R. relied on the orders of the lower authorities and prayed to dismiss the appeal.

Balakumar Varavara Sethumadhavan, Ernakulam Page 6 of 7 4. We have heard the rival submissions and perused the materials available on record. As seen from the records, the ld. AO had passed a draft order on 31.3.2022 and communicated the same to the assessee. The assessee also filed his objections before the ld. DRP-2,Bangalore and thereafter the ld. DRP after granting an opportunity of hearing, had rejected the objections raised by the assessee and confirmed the draft order issued by the ld. AO by its proceedings dated 26.12.2022. Thereafter, the said proceedings were communicated to the ld. AO on 27.12.2022, through mail as evidenced from the acknowledgement downloaded from the e-mail. Therefore, as per section 144C(13) of the Act, the ld. AO should have passed the assessment order within one month from the end of the month in which such direction is received by him. Admittedly, in this case, the direction of the ld. DRP was received by the ld. AO on 27.12.2022 but the assessment pursuant to the direction of ld. DRP was made on 20.2.2023, which is beyond the one month period prescribed u/s 144C(13) of the Act. Therefore, it is a clear case that assessment order passed by the ld. AO is barred by limitation as per u/s 144C(13) of the Act. On that score, the entire assessment is not sustainable and liable to be set aside. Since the entire assessment is set aside based on the legal plea raised by the assessee, we are not given any finding on merit with regard to other grounds raised by the assessee.

5. In the result, appeal of the assessee is allowed.

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