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Facts
The assessee, a partnership firm, did not conduct any business activity and did not file a return of income. The assessment was reopened based on information from the INSIGHT portal flagging the assessee as a non-filer in a high-risk category, indicating a sale of immovable property.
Held
The tribunal held that the notice issued under Section 148 by the JAO was invalid as it should have been issued under the Faceless Regime as per Section 151A. The reopening of assessment and subsequent actions were therefore challenged. The tribunal also noted grounds related to disallowance of cost of improvement and initiation of penalties under various sections.
Key Issues
Validity of notice issued under Section 148 by JAO under the Faceless Regime and the consequent reopening of assessment.
Sections Cited
147, 148, 151A
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: DR. B.R.R. KUMAR, VICE-MS. SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay condoned.
This appeal has been filed by the assessee against the order dated 29.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the “Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act” for short) for Assessment Year 2018-19.
The assessee has raised following grounds of appeal :-
“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing officer in The Notice Issued Under Section 148 by JAO is Invalid as It ought to have been issued under the Faceless Regime as per Section 151A of the Income Tax Act, 1961.
2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Assessing Officer has erred in re-opening the assessment Meghna Organic Vs. ITO Asst. Year : 2018-19 - 2– u/s. 147 of the Income Tax Act, 1961 and issuing notice u/s. 148 of the Income Tax Act, 1961.
3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing officer in disallowance of cost of improvement of Rs.20,00,000/-
On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 271F of the income tax act, 1961.
On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 272A(1)(d) of the income tax act, 1961.
On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s. 270A(8) of the income tax act, 1961.”
The briefly stated facts of the case are that the assessee is a partnership firm engaged in the business of manufacturing pigments and chemicals. During the year under consideration, no business activity was carried out by the assessee and consequently no return of income was filed. The assessment was reopened on the basis of specific information flagged on the INSIGHT Portal under the category of non-filer high risk. On verification of the said information, it was noticed that the assessee had sold an immovable property situated at Umbergaon, which was registered with the Sub-