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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH
Before: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar
आदेश/ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:-
This is an appeal filed against the order dated 30-01- 2024 passed by Income Tax Officer, Ward 1, Int. Tax, Ahmedabad for assessment year 2016-17.
2. The grounds of appeal are as under:-
“1. On merits: 1. The Ld. Dispute Resolution Panel (DRP) and the AO erred in making the addition of Rs.88,31,765/- under section 69 of the Act by treating the investment made in a residential flat as unexplained investment without appreciating that the Appellant has duly discharged the onus under section 69 of the Act by explaining the source and nature of such investment by providing documentary evidence. Hence, the addition made under section 69 of the Act is unlawful, bad in law and deserves to be deleted.
The DRP and AO failed to appreciate that the total investment made by the Appellant in a residential property is amounting to Rs.1,73,25,000/- out of which a sum of Rs.84,93,235/- was paid from housing loan taken by the Appellant and balance amount of Rs.88,31,765/- was paid through the remittances into the Appellant's NRE account made from his own overseas bank account. Thus, the said investment cannot be treated as unexplained investment as the nature and source of the same has duly been explained by the Appellant with supporting documents, Thus, the Ld. DRP and AO are not justified in making the addition amounting to Rs.88,31,765/- under section 69 of the Act and the same deserves to be deleted.
The Appellant seeks leave to add, alter and amend the above grounds whenever required.”
Additional Grounds of Appeal:
“The Appellant has preferred an appeal before the Hon'ble Income Tax Appellate Tribunal, Ahmedabad against the order dated 30.01.2024 passed by the AO. The Appellant challenges the validity of the notice issued under section 148 of the Act by way of the additional grounds of appeal. The additional grounds raised by the Appellant are purely legal in nature and the same goes to the root of the matter. The issue of validity of notice issued under section 148 was not raised as part of the objections against the draft assessment order before the Ld. DRP. The Appellant submits that the issue raised in the additional grounds of appeal goes to the core of the jurisdiction of the reassessment proceedings conducted by the Ld. AO.
The Appellant relies on the ratio laid down by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd Vs. CIT [(1998) 229 ITR 383 (SC)] The Appellant further draws Hon'ble Bench's attention to the Hon'ble Bombay High Court's Full Bench decision in the case of Ahmedabad Electricity Co. Ltd v CIT [(1993)199 ITR 351 (Bombay)].
In view of the above submission the Appellant prays that Hon'ble Bench may be pleased to admit the Additional Grounds and oblige.”
3. The assessee had not filed the return of income u/s. 139(1)/139(4) of the Act. As per the information, the Assessing Officer observed that the assessee had entered into high value transactions and as per the TDS statement paid amount of Rs. 66,66,386/- related to payment of construction projects of immoveable property, Rs. 1,73,25000/- as purchase immoveable property value at Rs. 30,00,000/- and TDS statement payment made to non- resident amounting to Rs. 3,859/- and TDS statement payment made to non- resident amounting to Rs. 1153/-. The assessee had purchased immoveable property of Rs. 1,73,25,000/- during the year under consideration. On the basis of same, the assessee’s case re-assessment and notice u/s. 148 of the Act was issued and the assessee was requested to file the return of income within 30 days. The Assessing Officer observed however the assessee failed to file return of income in response to the notice u/s. 148 of the Act, Notice u/s. 148A/B in consonance to the Hon’ble Apex Court decision was issued and served to the assessee. Order u/s. 148A(d) of the Act was passed on 29-07-2022 and served to the assessee as mentioned by the Assessing Officer in assessment order. Notice u/s. 148 of the Act dated 30-07-2022 was issued and served upon to the assessee, requiring the assessee to furnish return of income in prescribed form. The assessee did not file the return and has not filed the details hence the Assessing Officer proceeded to assessment proceedings u/s. 144. The Assessing Officer made addition of Rs. 1,73,25,000/- on account of unexplained investment u/s. 69 of the Act. Prior to this, the assessment was proposed to be completed u/s. 144 r.w.s. 147 r.w.s. 144C of the Act and draft assessment order was passed on 29-03- 2023. In response to the draft order proposing, the assessee filed objection before the Hon’ble Dispute Resolution Panel (DRP) and the DRP passed its order u/s. 144(5) on 29-12-2023. After taking cognizance of the DRP’s observation, the Assessing Officer made addition of Rs. 88,31,767/- related to unexplained investment u/s. 69 of the Act and the assessment order is passed on 31-01-2024
Being aggrieved by the assessment order, the assessee filed appeal before us.
The assessee has taken additional evidence thereby stating that the Assessing Officer is not justified in issuing the notice dated 31-07-2022 u/s. 148 of the Act without following the mandatory procedure prescribed u/s. 148A of the Act and therefore notice issued u/s. 148 of the Act and proceedings carried pursuant to the same are without jurisdiction invalid and bad in law. The ld. A.R. further submitted that the Assessing Officer is not justified in issuing the notice dated 31-07-2022 u/s. 148 of the Act beyond the period of three years from the end relevant to the assessment year without obtaining approval from the appropriate authority as per the provisions of section 151(2) of the Act. Thus, the notice issued u/s. 148 of the Act is invalid and bad in law. Without prejudice to these submissions, the ld. A.R. further submitted that the notice issued u/s. 148 in invalid as it does not specify any valid document identification no. (DIN).
The ld. D.R. submitted that the Assessing Officer has followed all the procedures and in fact has categorically given a draft assessment order as the assessee is a non-resident and after taking cognizance of the DRP’s recommendations/directions has passed the assessment order as per the procedure prescribed.
We have heard both the parties and perused all the relevant materials available on record. In respect of approval, the Assessing Officer has taken cognizance and has issued the notice u/s. 148 on 09-06-2021 which has taken the cognizance of the reasons mentioned in the approval u/s. 151 dated 04-06-2021 which is annexed. The contention of the ld. A.R. that the approval was not prior is not justifiable as the date of proposal for reasons to believe was issued on 04-05-2021 and the date of approval was obtained on 04-06-2022. The ld. D.R. further contended that the DIN No. was not specified is also not justifiable as the assessee has received intimation letter for notice u/s. 148 of the Income Tax Act, 1961 dated 31-07-2022 thereby giving the details of DIN No.. Thus, all the additional grounds (1 to 3) are dismissed. As regards merit of the case, the assessee has given the details related to the remittance amounting to Rs. 7,25,000/- and various details of his bank statements from his overseas bank account and the assessee has clearly discharged his onus u/s. 69 of the Act by explaining the source and nature of such investment and the source of the fund for such investment and the same was before the Assessing Officer as well as before the CIT(A). But both the authorities has ignored the evidences filed by the assessee and therefore, the additions made by the Assessing Officer are not justifiable, hence the appeal of the assessee is partly allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 28-10-2024 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 28/10/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद