MOUSAMI CHOUDHURY,VARANASI vs. DY. CIT, RANGE - 2, VARANASI

PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER:

These two appeals filed by the assessee, being ITA Nos.214 & 213/VNS/2019 for assessment year’s 2009-10 and 2010-11 respectively , are directed against the common appellate order dated 11.07.2019 passed by learnedCommissioner of Income Tax(Appeals), Varanasi(hereinafter called "the CIT(A)”) in Appeal Nos. 10455/CIT(A)/VNS/2016-17/195 for assessment year 2009-10 and Appeal No. 10457/CIT(A)/VNS/2016-17/196 for assessment year 2010-11, the appellate proceedings had arisen before Learned CIT(A)from two separate assessment orders , one dated29.12.2016passed by learned Assessing Officer (hereinafter called “the AO”) under Section 144r.w.s. 147of the Income-tax Act, 1961 (hereinafter called “the Act”) for assessment year 2009-10 , second dated 28.12.2016 1

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi passed by AOunder Section 144 r.w.s. 147 of the 1961 Act for assessment year 2010-11 . We have heard both the partiesin Virtual Court through Virtual hearing mode. 2. The grounds of appeals raised by assesseein memo of appeals filed with Income Tax Appellate Tribunal, Circuit Bench, Varanasi (hereinafter called “the tribunal”) for assessment year 2009-10, reads as under: “1. Because the Learned CIT(Appeals) has erred in law as well as on facts in dismissing the appeal without appreciating or considering the merits of the appeal. 2. Because the Learned CIT(Appeals) has erred in law as well as on facts in not appreciating that the entire assessment on the assessee is due to a financial fraud by using the assessee's name where the assessee is totally unaware and uninvolved. 3. Because the Learned CIT(Appeals) has failed to appreciate that the entire assessment has been framed without giving proper opportunity of being heard and also without confronting the assessee with the incriminating material used against her. 4. Because the Learned CIT(Appeals) has erred in law as well as on facts in sustaining the assessment passed under section 148 /147 without appreciating there was no valid service of notice u/s 148 and the entire procedure of assessment was bad in law. 5. Because the Learned CIT(A) has erred in law as well as on facts in sustaining the assessment passed under Section 148/147 without appreciating there was no valid service of notice u/s 143(2) and the entire procedure of assessment was bad in law.” The assessee has filed similar grounds of appeal verbatim for assessment year 2010-11 in memo of appeal filed with tribunal, as were filed for assessment year 2009-10 reproduced above. Since both the appeals involve common issues, they were heard together and are disposed off by this common order. 3. First, we shall take up appeal of the assessee for assessment year 2009- 10. As per Revenuereturn of income was filed by the assessee for the impugned assessment year on 26.02.2011, with returned total income of Rs. 23,84,890/- ( However, as we see later in this order, the assessee is disputing 2

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi that she never filed any return of income with department for impugned assessment year, on 26.02.2011). The AO initiated proceedings under Sections 147/148 against the assessee, and notice under Section 148 dated 29th March, 2016 was issued by the AO which is claimed by the AO to have been duly served on the assessee. The case of the assessee was reopened on the ground that - “An information has been received from the ADIT(Inv.) Unit-3(4), Kolkata that there was a large numbers of credits receipts of Rs. 1.37 crore in her account No. 031001518299 maintained with ICICI Bank through various funds transferred originated over the internet and the only debit to this account have been by way of transfer to Oven Commerce Private Limited totaling to Rs. 1.37 Crs. During the F.Y. 2008-09. The Co. M/s Oven Commerce Private Limited is engaged as a corporate agent in the insurance business as per company website. The above account having transaction of Rs. 1.37 crores has not been disclosed in the ITR.” 3b. Hence, the AO initiated proceedings against the assessee u/s 147/148 of the 1961 Act and the AO issued notices under Section 148 dated 29th March, 2016 to the assessee, which as per AO was duly served on the assessee,and the assesseewas required to file return of income in response to the aforesaid notice issued by AO u/s 148, but the assessee did not comply with the aforesaid notice and no return of income in pursuance to notice u/s 148 was filed by the assessee. The AO issued non compliances letters dated 06.07.2016 and 10.11.2016 , but the assessee did not reply to said letters also. The AO issued Show Cause Notice(SCN) u/s 144 and notice u/s 142(1) r.w.s. 129 , dated 02.12.2016 to the assessee through speed post , which was returned unserved. Then the notice was served by AO through affixture on 10th December, 2016. The assessee did not comply even to this notice .Thus, the AO observed that the assessee has no explanation to offer with respect to these

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi credit receipts, hence the AO treated the entire amount of Rs. 1,37,00,000/- as unexplained money , and deemed the same to be the income of the assessee under Section 69A of the Act whichstood added by the AO to the income of the assessee, vide assessment order dated 29.12.2016 passed by AO u/s. 144 r.w.s. 147 of the 1961 Act 4. Aggrieved by the assessment order dated 29.12.2016 passed by AO u/s 144 r.w.s. 147 of the 1961 Act, the assessee filed first appeal with ld. CIT(A) . The assessee appeared in person before ld. CIT(A) along with her Counsel. The assessee submitted before ld. CIT(A), as under: Sl. No. Nature of Addition Submission of the appellant /disallowances 1 Proceeding u/s 144 Sir, the A.O. has passed assessment order u/s 144 without proper service of the statutory notices. The appellant is a house wife and she has neither filed any return of income nor received any such statutory notices for her compliance. It is submitted that the marriage was performed through court as the parent of the appellant were not happy and agreed with this marriage. The relation with appellant and her parent were not good and as such the appellant rarely would have visited her parent's home after the marriage. From the assessment order it appears that alleged notices were issued and served at the address of appellants' parent where appellant was not residing after marriage. The assessment has been made by learned A.O. u/s 144 of the I.T.Act, 1961 without proper personal service of alleged notices and without providing opportunity of

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi being heard. This is against the principle of natural justice. An affidavit duly sworn by the appellant is being submitted before your honor stating the above fact to substantiate her claim. In view of these facts and in the circumstance of the case the assessment order passed by learned A.O. is bad in law and deserves to be annulled. 2 Addition of Rs. Sir, Ld. AO has added a sum of Rs. 137, 00,000/-under 137,00,000/- u/s 69A section 69A of the It is submitted that the appellant has not filed any return of income as her income was not taxable. Sir, in the back ground of the case it is submitted that once the appellant had applied for a job in M/s Oven Commerce Private Ltd, 56/2 Kings Road, Howrah, Kolkata but she was not offered any job from the said company. Later on, the above company fraudulently used her certificate and photo etc. and opened a bank account in her name. The appellant had no knowledge about opening of bank account and alleged business done in her name. She came to know only when an order u/s 144 was received from the Income Tax Department. From the perusal of bank statement your honor will appreciate that after depositing the money in appellants' account same has been transferred to same M/s Oven Commerce Private Limited itself. The appellant has no connection with this company nor any business done in her name. The appellant has filed an online FIR against the said company a copy of which is submitted before your honor for perusal. An affidavit

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi duly sworn by the appellant and Notarized by court is also submitted before your honour for perusal and doing justice with the appellant. In the circumstances of the case your honor is very humbly requested to delete the addition and cancel the assessment as appellant has never filed any return for the year under appeal.

4b. The assessee submitted before ld. CIT(A) , an affidavit explaining that she is an household lady and have not done any type of business during previous years relevant to A.Y. 2009-10 and A.Y. 2010-11 and as such income is not chargeable to tax . The assessee also claimed before ld. CIT(A) that she has not filed return of income and that she has no taxable income during those years. It was submitted that no notice was served upon the assessee as claimed by the AO. The assesseefurther submitted that notice under Section 143(2) was not issued by the AO, and hence assessment order passed by the AO is invalid void ab-initio and against the provisions of law. 4c. The learned CIT(A) forwarded submissions of the assessee to the AO for his comments , and the AO submitted his remand report through JCIT, Range- 2 vide letter dated 18.04.2019, which is reproduced as under: “2. An information has been received from the ADIT(INV) Unit-3(4), Kolkata that there was large numbers of credits receipts of Rs. 1.37 crore in her account no. 031001518299 maintained with ICICI Bank through various funds transferred originated over the internet and the only debit to this account have been by way of transfer to Oven Commerce Pvt. Ltd. either within the bank or in the other banks. "According to suspicious transaction report of FIU the total amount transferred to Oven Commerce Pvt. Ltd. has been in excess of Rs. 1.3 Crores over a period of around 1 month. It is observed the account is being operated by the customer's (Smt. Mousami Chaudhary) husband Mr. LuvkushChoudhary, who is working as 6

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi manager in Oven Commerce Put. Ltd. at Varanasi. The account of Oven Commerce, opened in Howrah in November 2008, has been operated regularly till April 2009. During this period of about 5 months there have been in addition to the transfers from Mousami Choudhury:- (i) Credits from and debits to accounts of Oven Commerce maintained in other banks. (ii) Credits from various other individuals -holding accounts in the bank. (iii) Transfers from accounts of Gaadheya Developers Put. Ltd. and Sagar Township Pvt. Ltd. (iv) Large cash withdrawals totaling close to Rs. 1 crore. The head office of Oven Commerce is at Howrah, and as per the company website it is engaged as a corporate agent in the insurance business. Incidentally both the accounts of Gaadheya Developers and Sagar Township have been opened in Howrah around the same time in September 2008, have the same address as Oven Commerce, and transaction in both these accounts are apparently linked to insurance companies.” 3. In this case proceeding u/s 147/148 was initiated and notice u/s 148 dated 29.03.2016 was issued and duly served upon the assessee. Further another opportunity dated 06.07.2016 was given to the assessee but no compliance were made by the assessee to the said notices. A show cause notice u/s 144 of the 1.T. Act, 1961 dated 02.12.2016 was affixed at her home, The AO has given more opportunities through notices dated 29.03.2016, 06.07.2016, 02.12.2016 to assessee to discuss her case but no one appeared nor any reply was submitted Even a show cause notice dated 02.12.2016 was totally ignored by the assesseee. Left with no option the notice dated 02.12.2016 was thereupon affixed on 10.12.2016. Scanned copy of the said notice is as under:-

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

No compliance were made by the assessee for verification during the course of assessment proceeding, hence order u/s 144 r.w.s. 147 was made against the income of Rs. 1.37 Crore as unexplained money and deemed to be the income of the assessee u/s 69A of the Act. 4. The assessee preferred an appeal before the Ld. CIT(Appeal), Varanasi against the addition of Rs. 1.37 Crore. The written submission consist of statement of facts of appeal and submission before Hon'ble Commissioner of Income Tax(Appeal) stating that she is a house-wife having no source of income. She has not done any business in A.Y. 2009-10 8

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi on or before and never filed any return for the A.Y. 2009-10. In her submission she says that the ICICI bank account (031001518299) is not pertaining to her and she is not aware for that account and also stated that once she had applied for a job in M./s Ovam Commerce Private Ltd., 56/2 Kings Road, Howrah, Kolkata but she was not offered any job from the said company. Later on the above company fraudulently used her certificate and photo etc. and opened a bank account in her name. The appellant had no knowledge about opening of bank account and alleged business done in her name. 5. To verify the statement and facts of the assessee a notice u/s 133(6) dated 09.10.2018 was issued to ICICI Bank and asked to send account opening form, KYC, Account statements, all transaction done with said accounts. On 23.10.2018 the information requiring vide letter dated 09.10.2018 is analysied. It is found that the account is opened on 30.04.2008 and presently closed. It is a salary/agent account which is authenticate by Mr. Nikhil Kulshrestha, COE and ShailendraSaksena, ABSM(CDA) of Reliance Life Insurance Co. Ltd.. Mostly transactions were made with Oven Commerce Pvt Ltd. 6. Notice u/s 133(6) of the IT Act, 1961 dated 15.11.2018 issued to Reliance Nippon Life Insurance Co. LTD. (LIC) for requiring copy of ID card/PAN card to confirm identity of Mr. Nikhil Kulshrestha, CCE and Mr. ShailendraKaksena, ABSM (CDA) (members of Reliance life Insurance co. Ltd.) who authorized Smt. MausamiChaodhary to maintain Zero balance salary account and also asking the nature and source of commission received by the Smt. MausamiChaodhary with complete account details for the period of 30.04.2008 to till date along with agent code. No compliance was made by the said company, hence identity of these two members of Reliance Nippon Life Insurance Co. Ltd. (LIC) is remains unverified. 6. Looking after the fact it is clear that involvement of the assessee in all transactions done by net banking and it proves that assessee is aware for said account. According to income tax return filed on 26.02.2011 for the A.Y. 2009- 10 (copy enclosed) the assessee admitted that she is liable to maintain accounts as per section 44AA and her account is audited by Mr. SandipModak (Membership no. of the auditor- 056407). The assessee is under obligation to produce the nature and source of income. The assessee during the course of assessment proceedings could not produce nature and source of income, the assessee is trying to misguide the department. Hence, the amount of Rs. 1,37,00,000/- is remains unverified. 7. Onus of proving the source of a sum of money found to have been received by an assessee is on him/her. When the nature and sources of a receipt, whether is to be of money or other property and no explanation was made by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that the income from any particular source. Roshan Di Hatti Vs. CIT (SC) 107 ITR 938.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi 8. In view of the above it is submitted that the theassessee's involvement in whole matter is only gain some commission and assessee is completely aware from all transactions. The explanation given by the assessee is not satisfactory, hence the ground is not acceptable.” 4d. The learned CIT(A) called for the response of the asseseeto the Remand Report filed by the AO, which is reproduced hereunder: “Sir, the appellant is a house wife and she has neither filed any return of income nor received any statutory notices issued from the department. It is submitted that appellants marriage was performed through court as the parent of the appellant were not happy and opposed for this marriage. The relation with appellant and her parent were not good and as such after the marriage the appellant left the house of her parent and would have rarely visited her parent's home. Therefore, appellant had no knowledge about the alleged notices issued from the department at her parents home. The assessment made u/s 144 on alleged notices is, therefore, unjustified and illegal as A.O. had no jurisdiction to frame assessment when statutory notices issued at parental house where the appellant was not residing. Your honor's kind attention is drawn towards ABCAUS case law 2955(2019) (05)ITAT a copy of which is submitted for your honors perusal. 2. Besides above, on facts of the case your honor, it is humbly submitted that appellant is a house wife and has never done any business. The appellant is leading a very low middle class society and is in a very miserable condition. She has never filed any return of income because she was not having taxable income. In the written submission submitted before your good self these facts were broadly explained. Once the appellant had applied for a job in M/s Oven Commerce Pvt. Ltd. 56/2, Howrah, Kolkata and the said company fraudulently used the certificate and photographs of 'appellant and fraudulently opened a bank account in her name. She came to know this fact only when an ex-parte order under section 144 was received by her from the Income tax department. She has already lodged an FIR against the said company and investigation from police department is going on. A copy of the FIR was submitted before your honor for kind perusal and consideration. 3. From the report of the Assessing Officer your honor will see that AO himself has noted that mostly transactions were made with Oven Commerce Pvt. Ltd. The alleged commission received were simultaneously transferred in the account of the said company i.e. M/s Oven Commerce Private Limited. This fact is proved from the bank statement submitted before your honor and also as verified by A.O. under section 133(6) from the ICICI Bank. This clearly indicates that appellant had no knowledge about any such bank transactions. Hon'ble sir a prudent person cannot do business for the benefit of others and will think about herself only. From the bank statement it is clear that money so earned have been simultaneously transferred to the said company. Sir, the 10

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi appellant is innocent house wife and is not able to perform any business because she is not skilled and not conversant about business activities, Sir, the living standard and financial position of appellant is very miserable and cannot afford to pay such huge illegal demand. In view of above facts and in the circumstances of the case your honor is humbly prayed to delete the addition and save the poor appellant in the interest of justice.” 4e. The learned CIT(A) considered the facts of the case as wellsubmissions of the assessee and material on record. The learned CIT(A) observed that the AO has issued a notice under Section 148 which was duly served on the assessee’s address. The ld. CIT(A) also observed that notices under Section 142(1) were also issued by AO which were also served on the assessee’s address available on record. There was no compliance on the part of the asssessee to notices issued by the AO u/s 148 as well notices issued by the AO u/s 142(1) . The assessee never filed any return of income in response to notice issued by AO u/s 148. The AO issued Show Cause Notice(SCN),dated 02.12.2016. So far as contention of the assessee, that no notice u/s 143(2) was issued and served upon by the AO and hence assessment u/s 144 is bad in law, the ld. CIT(A) observed that no return of income was filed by the assessee in response to the notice issued and served by the AO under Section 148 , and hence there is no question of issuing any notices under section 143(2) to the assessee. The ld. CIT(A) observed that notice u/s 143(2) is required to be issued only where a return of income has been filed by the assessee u/s 139 or in response to notice issued u/s 142(1) of the 1961 Act. The ld. CIT(A) observed that in case of return of income filed under Section 148 of the 1961 Act , “ the provisions of this Act shall, so far as may be , apply accordingly as if such return were return required to be furnished under section 139”. Thus, the ld. CIT(A) rejected the contentions of the assessee that the assessment framed by the AO was bad in law since no notice 11

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi u/s 143(2) was issued. The ld. CIT(A) also held that the action of the AO in framing assessment u/s 144 is valid. Thus, the contentions raised by assessee on legal grounds were rejected by ld. CIT(A) 4f. So far as the quantum additions on merit is concerned , the learned CIT(A) observed that the assessee has submitted that she had applied for a job with M/s. Oven Commerce Pvt. Ltd. 56/2 Kings Road, Howrah, Kolkata , but she was not offered any job from the said company . The ld. CIT(A) observed that the assessee has claimed that the said company used the Photo, ID and other documents of the assessee, and without her knowledge opened a bank account in which amounts were deposited and subsequently transferred to the bank account of the company M/s Oven Commerce Pvt. Ltd. . The ld. CIT(A) also observed that the assessee has filed an online FIR against the said company with SHO, Sigra, Varanasi on 21.08.2018 , that is much after the date of assessment order which was passed on 29th December, 2016 by the AO and and also the appeal filed with ld. CIT(A) on 30th January, 2017. It was also observed by ld. CIT(A) that inremand proceedings , the AO conducted enquiries from ICICI Bank about the KYC submitted for opening the account , and it was reported thatthe bank account was opened on 30th April, 2008 and presently the same is closed. The ld. CIT(A) observed that this bank account is salary/agent account which was authenticated by Mr. Nikhil Kulshretha, CCE and ShailendraKaksena, ABSM (CDA) of the Reliance Life Insurance Company Ltd. The learned CIT(A) observed that the assessee contention that the bank account was opened fraudulently by M/s Oven Commerce Pvt. Ltd. remained unproved. It was also observed by learnedCIT(A) that the amountsweredeposited in the bank account of the assessee over a period of time which have been transferred to the bank account of the company M/s 12

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Oven Commerce Pvt. Ltd. . The learned CIT(A) observed that since the amounts have been deposited in the bank account of the assessee, the onus lies upon the assessee to explain the nature and source of these deposits , and the assessee failed to discharge its onus. The learned CIT(A) held that the AO’s action in treating the deposits in the bank account of the assessee maintained with ICICI Bank as unexplained deposit u/s. 69A of the 1961 Act was proper and justified. Thus, the ld. CIT(A) sustained the additions to the income to the tune of Rs. 1,37,00,000/- as was made by the AO for ay: 2009-10, and ld. CIT(A) dismissed the appeal filed by the assessee,vide appellate order dated 11.07.2019. 5. Aggrieved by dismissal of the appeal filed by ld. CIT(A), the assessee has filed second appeal with the tribunal. The Ld. Counsel for the assessee submitted that the assesseeis a housewife. Our attention was drawn by ld. Counsel for the assessee to Affidavit dated 23.08.2018 filed by the assessee before ld. CIT(A) , which is at page no. 14-15 of the paper book filed by the assessee, in which it is averred that the assessee is resident of House No. 11/107, ZA , Ranipur, Mahmoorganj Thana, Melupur, Varanasi . That she got married in 2004 and staying with her husband in a rented accommodation after marriage. That M/s Oven Commerce Private Limited , 56/2, Kings Road, Howrah, Calcutta of which Mr. Surender Mishra and Mr. Hari Bansh Singh were Directors , was engaged in insurance business . The said company opened in 2007 a branch in Varanasi at Gurunanak Complex, Sigra, Varanasi. That financial condition of the assessee was not good and she applied for a job with the said company in 2007 wherein along with application form , she submitted Biodata, photo as well education certificate , but she was not selected by the said company. It is further averred by her that the said 13

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi company opened bank account in her name and did money transaction with Oven Commerce Private Limited, and she has no connection with the said bank account opened in her name, as she never opened any bank account nor her signatures are there in the bank account. She further averred in the said affidavit that she has already registered on-line FIR against this . The said FIR is placed on record in paper book at page 16-18/paper book. Our attention was also drawn by ld. Counsel for the assessee to legal notice issued against the said company, which is placed in paper book at page number 19-20 /paper book. Our attention wasalso drawn by ld. Counsel for the assesseeto page no. 35 onwards of the paper-book filed by the assessee and it was submitted that the department has obtained copy of the account opening form submitted for opening of the bank account with ICICI Bank in the name of the assessee .It was submitted that M/s Oven Commerce Pvt. Ltd. has misused the Adhaar Card / photograph of the assessee and opened the bank account in the name of the assessee. Our attention was also drawn to Page Nos. 67 to 70 of the paper book filed by the assessee,and it was submitted that these are the cheques which have been issued from the ICICI Bank account in favour of M/s. Oven Commerce Pvt. Ltd. , and it was also submitted that the entire amount from this bank account has been transferred to M/s Oven Commerce Pvt. Ltd. . It was submitted that even the assessee filed an application under RTI Act, with department. 5b. The Ld. Sr. DR submitted on the other hand submitted that the assessee has duly filed return of income under Section 139 of the Act , on 26th April, 2011 for assessment year’s 2009-10 as well as 2010-11 , the copies of which are placed at page No. 30-31 of the paper-book. It was also submitted that the assessee claimed refund of TDS amount of Rs. 17,66,512/-out of total TDS of 14

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Rs. 24,02,503/-, for ay: 2009-10. It was also submitted that the assessee e- filed income tax return in ITR-4, which is a return of income for declaring business income. The ld. Sr. DR submitted that the assessee did not participated in the assessment proceedings. 5c.At this point, the Ld. Counsel for the assessee submittedthat the assessee denies to have filed any return of income with department, for ay: 2009-10 as well 2010-11. 5d. The Ld. Sr. DR drew our attention to reasons recorded by the department, before opening of the assessment (placed on record in file) u/s 147/148 of the1961 Act. It was submitted that ld. PCIT, Varanasi recorded satisfaction on 22.03.2016 , that it is a fit case for reopening of assessment for both the assessment years 2009-10 and 2010-11, and reasons for re-opening were duly recorded. The ld. Sr. DR submitted that there are unexplained deposit in the bank account of the assessee, to the tune of Rs. 1.37 cores in the previous year 2008-09 relevant to assessment year:2009-10 . It was submitted that information was received from the ADIT(Inv.),Kolkatta that there were large number of credits of Rs. 1.37 crore in assessee’s bank account number 031001518299 maintained with ICICI Bank during financial year 2008-09 through various fund transferred originated over internet and the only debit to the account have been by transfer to Oven Commerce Private Limited totaling to Rs. 1.37 crores, during financial year 2008-09. The return of income was filed on 26.02.2011 u/s 139, which was processed u/s 143(1) and returned income was accepted. It was submitted that after recording reasons for reopening and after taking necessary approvals, notice dated 29.03.2016 was issued u/s 148 by the AO which was duly served on the

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi assessee. The assessee never responded to notices issued by the AO u/s 148, 142(1) and even show cause notice dated 02.12.2016 issued by the AO. It was submitted by ld. Sr. DR that the assessee never filed return of income in pursuance to notice issued u/s 148. Finally, notice was served by the AO through Affixture, but the assessee never responded. The AO made additions to the tune of Rs. 1.37 crores in the hands of the assessee towards unexplained money u/s 69A, as nature and source of credit of Rs. 1.37 crores in the bank account was never explained by the assessee. The ld. CIT(A) upheld the addition of Rs. 1.37 crores as was made by the AO. The Ld. Sr. DR relied upon the appellate order passed by learned CIT(A) and prayers were made by ld. Sr. DR to uphold the additions as were made by the AO and confirmed by ld. CIT(A). 5e. The Ld. Counsel for the assessee submitted that the assessee was duped by some persons who opened bank account in the name of assesseewith ICICI Bank, and then deposited amounts in the said bank account opened in her name. It was also submitted that the assessee filed affidavit before learned CIT(A) narrating all the facts and background. The FIR was also lodged against such persons who misused her name and opened bank account fraudulently in the name of the assessee. It was submitted that even legal notices were also issued by Advocates on behalf of the assessee, to said M/s Oven Commerce Private Limited. It was submitted that the amounts which stood credited in this bank account in her name with ICICI bank were not the transactions of the assessee. It was submitted that the assessee applied for a job with Oven Commerce Limited and submitted her photograph, educational documents, Aadhar Card etc. , which was later misused by that company. It was submitted by ld. Counsel for the assessee that although she applied for the job with Oven 16

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Commerce Private Limited, but she was never offered job by said company. It was submitted that the assessee applied for obtaining reasons for reopening of assessment , on 17.03.2022 , but the same were not provided. The assessee even filed application under RTI on 17.3.2022 , to get reasons recorded for reopening of the assessment, but the same was not furnished. The ld. Sr. DR has placed on record reasons for reopening of assessment , for both the years. It was submitted by ld. Counsel for the assessee, that the reasons were not properly recorded , as Sanction u/s 151 was not proper. On being asked by the Bench, the Ld. Counsel for the assessee confirmed that it is true that the assessee’s husband was employee of the said company of M/s Oven Commerce Pvt. Ld. , but he was Class IV employee. The Ld. Counsel for the assessee relied upon the decision of Mumbai-tribunal in the case of ACIT, Circle 1(2), Mumbai v. Bharti Axa Life Insurance Company Limited , reported in (2021) 128 taxmann.com 23(Mumbai-trib.) and our attention was drawn to para 4.8 of the said appellate order. 6. We have considered rival contentions and perused the material on record including cited case laws. We have observed that the Revenue has claimed that the assessee filed her return of income u/s 139(4) for the impugned assessment year 2009-10, on 26.02.2011 , declaring returned income of Rs. 23,84,890/- . The assessee is however disputing that she never filed any return of income for the impugned assessment year 2009-10. We will deal with this aspect later in this order. The copy of acknowledgment of said return of income is placed in paper book filed by the assessee , at page number 30. Proceeding further, the aforesaid return of income was processed by Revenue u/s 143(1) of the 1961 Act , and the returned income was accepted by department. The case of the assessee was reopened for reassessment as there 17

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi were reasons to believe that the income of the assessee to the tune of Rs. 1,37,00,000/- chargeable to income-tax has escaped assessment based on information received by AO from ADIT(Inv.) ,Kolkatta, on the grounds that: “An information has been received from the ADIT(Inv.) Unit-3(4), Kolkata that there was a large numbers of credits receipts of Rs. 1.37 crore in her account No. 031001518299 maintained with ICICI Bank through various funds transferred originated over the internet and the only debit to this account have been by way of transfer to Oven Commerce Private Limited totaling to Rs. 1.37 Crs. During the F.Y. 2008-09. The Co. M/s Oven Commerce Private Limited is engaged as a corporate agent in the insurance business as per company website. The above account having transaction of Rs. 1.37 crores has not been disclosed in the ITR.”

The reasons for reopening were duly recorded by the AO and proposal for obtaining approval for initiating proceedings against the assessee u/s 147 of the 1961 Act , was moved by the AO after recording reasons for reopening of assessment on 14th March, 2016, which was approved by the competent authorities finally by learned Principal Commissioner of Income-tax, Varanasi on 22.03.2016. The said approval granted by ld. PCIT, Varanasi is reproduced hereunder:

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

The assessee has raised challenge that the said approval was not valid as the relevant competent authority has not approved the same. Reference is drawn to the provisions of Section 151 of the 1961 Act, as was in force at the relevant times , which reads as under: Sanction for issue of notice 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.] (Emphasis supplied by us)

Section 151(1) requires that approval of either of ld. PCCIT/CCIT/PCIT/CIT is required that they are satisfied based on reason recorded by the AO that it is a fit case for the issue of notice u/s 148 in case more than four years have elapsed from the end of the relevant assessment year, before any notice is issued u/s 148 by AO. Admittedly ,in the instant case ,the AO issued notice u/s 148 on 29.03.2016 , which was after four years from the end of the relevant assessment year viz. ay: 2009-10 .The ld. PCIT granted approval on 22.03.2016. While recording satisfaction and granting approval ld. PCIT specifically referred to the reasons recorded by the AO of reopening of the assessment , and then recorded that it is a fit case for the issue of notice u/s 148 of the 1961 Act. While recording the reasons for reopening of the assessment for ay: 2009-10 at column no. 11 of the proposal moved by AO, the AO recorded detailed reasons, as under: “ An information has been received from the ADIT(Inv.) Unit -3(4) , Kolkatta that there was large numbers of credit receipts of Rs. 1.37 crore in her account no. 031001518299 maintained with ICICI Bank through various funds transferred originated over the internet and the only debit to this account have been by way of transfer to Oven Commerce Pvt Ltd.totalling to Rs. 1.37 crore during the F.Y.2008-09. The Co. M/s Oven Commerce Pvt. Ltd. is engaged as a corporate agent in the insurance business as per company website.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi The above account having transaction of Rs. 1.37 crore has not been disclosed in the ITR. Therefore I reason to believe that the income of Rs. 1.37 crore chargeable to tax has escaped assessment.” Thus, the reopening of the concluded assessment was done by AO by invoking provisions of Section 147 after recording of reasons and after obtaining approval of learned PCIT, Varanasi, as was required u/s 151. We donot find any fault in the satisfaction recorded /approval granted by ld. PCIT, for reopening of the concluded assessment.The reliance of the ld. Counsel for the assessee on the decision of Mumbai-tribunal in the case of Bharti Axa Life Insurance Company Limited (supra), is misconceived and is hereby rejected. Thus, this contention of the assessee is rejected. We order accordingly. The reopening of the assessment was done by the AO by issuing notice dated 29.03.2016 u/s 148, while the impugned assessment year is ay: 2009-10, thus reopening of the concluded assessment was done after four years but within six years from the end of the assessment year, and further that original return of income was processed u/s 143(1) and no assessment was originally framed by Revenue u/s 143(3). Thus , first proviso to Section 147 is not applicable. Further , the income of the assessee allegedly escaping assessment was Rs.1,37,00,000/- based on the information received by AO from ADIT(Inv.) , Kolkatta , and the AO had reasons to believe that the income of the assessee to the tune of Rs.1,37,00,000/- for the impugned assessment year 2009-10 has escaped assessment, which led AO to initiate invocation of provisions of Section 147/148 , requisite approvals were obtained by AO from ld. PCIT, and notice u/s 148, dated 29.03.2016 was issued after four years but within six years from the end of the 23

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi relevant assessment year 2009-10. Thus, we hold that reopening of the assessment was validly done by the AO. Reference is drawn to provisions of Section 147 and 148 of the 1961 Act , which were in force at relevant time reads as under: Income escaping assessment. 147. If the [Assessing] Officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : 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: [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

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi 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 underassessed ; or (ii) such income has been assessed at too low a rate ; or (iii) such income has been made the subject of excessive relief under this Act ; 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.] 3[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.] Issue of notice where income has escaped assessment. 148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be pres-cribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] [Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October,

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] [Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.] [(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.] (Emphasis Supplied)

Proceeding further, the assessee did not filed any return of income in pursuance to notice u/s 148 dated 29.03.2016 issued by the AO . The AO sent two non- compliance letters on 06.07.2016 and 10.11.2016 to the assessee which were duly served , but the assessee did not responded to the said letters. The AO issued SCN u/s 144 as well notice u/s 142(1) r.w.s. 129 of the Act, dated 02.12.2016 to the assessee , sent through speed post, which returned unserved. Subsequently, the AO served these notices through Affixture on 10.12.2016, but the assessee did not responded even to these notices. The claim of the assessee is 26

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi that she never received any of the aforesaid notices issued by the AO , we will address this contention of the assessee later in this order. The AO made additions to the income of the assessee to the tune of Rs. 1,37,00,000/- as the assessee could not explain nature and source of these credit entries in her bank account no. 031001518299 with ICICI Bank,Sigra, Varanasi, and hence the AO treated the said amount of Rs. 1,37,00,000/- as unexplained money and deemed to be income of the assessee u/s 69A , which stood added to her income by the AO vide assessment order dated 29.12.2016 passed u/s 144 read with Section 147 of the 1961 Act. The assessee filed first appeal with ld. CIT(A) . The assessee appeared in person along with her counsel before the ld. CIT(A). The assessee made her submissions before ld. CIT(A) , who forwarded the assessee’s submissions to AO for his comments . The AO during remand report proceedings collected all the information and documents from the ICICI Bank, Sigra, Varanasi. The AO submitted remand report to ld. CIT(A). The said remand report was forwarded by ld. CIT(A) to assessee for rebuttal.The assessee submitted her rejoinder to remand report before ld. CIT(A) .The ld. CIT(A) after considering submissions of the assessee dismissed the appeal of the assessee, both on legal grounds as well on merits of the issue’s raised by the assessee in her appeal. We have elaborately discussed proceedings before the ld. CIT(A) in preceding para’s of this order, and the same are not repeated here. The crux of the arguments of the assessee is that , firstly that she never received any of the notices issued by the AO during reassessment proceedings. Secondly , she never filed any return of income on 26.02.2011 with department, for the impugned assessment year . Thirdly, that so far as credits in the bank account in her name with ICICI Bank , Sigra, Varanasi is concerned, the said bank account was opened fraudulently by M/s Oven

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Commerce Private Limited by misusing her photo, ID, Aadhar Card etc. and all these transactions in this ICICI Bank account opened in her name relates to and pertains to M/s Oven Commerce Limited , and the assessee has nothing to do with it. The assessee submitted in her defense that she got married to Mr. Luvkush Choudhary in 2004 , against the wishes of her parent through court marriage , and both of them are living in a tenanted property in Varanasi since then and she is not having good relations with her parent and rarely she visit her parents . The address of the assessee with the Income-tax department as well in the aforesaid ICICI bank account namely N 11/107 ZA Ranipur , Mahmoorganj,Varanasi, U.P. is of the address of the parents of the assessee. Thus, she claimed that parents of the assessee are not in good terms with the assessee, and they have not given her the information about the notices received from the department during reassessment proceedings. The assessee submitted that M/s Oven Commerce Private Limited , which is engaged in the business as insurance agent , opened branch office at Sigra,Varanasi, in 2007. The assessee is resident of Varanasi.The assessee also submitted that she applied for a job with M/s Oven Commerce Private Limited , and submitted her photographs, ID, Aadhar Card etc. with the said M/s Oven Commerce Private Limited, who misused the said documents and opened bank account in her name with ICICI Bank , Sigra, Varanasi( a/c number 031001518299) , which bank account was misused by the said M/s Oven Commerce Limited. The credits in the said ICICI bank account number 031001518299 were transferred to said M/s Oven Commerce Private Limited. The assessee has also submitted that no prudent person shall do so that income received by him/her shall be transferred to some other person. The assessee has submitted in her defense an affidavit , that bank account was

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi opened in her name and the said account was misused by M/s Oven Commerce Private Limited.She has filed an online FIR against M/s Oven Commerce Private Limited as well legal notice was also sent to said company. The assessment order was passed in December 2016 and an appeal was filed with ld. CIT(A) by the assessee in January, 2017, while the proceedings were initiated by assessee by filing FIR, legal notice as well affidavit ,belatedly in August-October, 2018. Thus, the proceedings so initiated are suffering from delay and latches on the part of the assessee. There is no material brought on record by the assessee to prove as to further steps were taken by the assessee to get ultimately the charge sheet filed against the accused/culprits in the Court to get the accused/culprits punished/convicted through the process of law. Merely taking initial steps and that too which are suffering from delay and latches, and then not persuing them to bring to logical conclusion, does not support the stand of the assessee. On being asked by the Bench, the ld. Counsel for the assessee admitted during the course of hearing that her husband was working for M/s Oven Commerce Private Limited , but was working as a Class IV employee with said company. The Revenue has claimed that the husband of the assessee was working as Manager of Varanasi Branch of M/s Oven Commerce Private Limited, and the said company was engaged in business as corporate insurance agent. The Revenue claim is that this bank account no.031001518299 was opened with ICICI Bank at Varanasi in the name of the assessee, and was operated by husband of the assessee. It is the claim of the Revenue that the assessee was in full knowledge of this bank account. The said account was a salary/agent account in the name of the assessee which was opened on the recommendation/ authentication of Mr. Nikhil Kulshrestha , CCE and Mr. Shailendra Saksena , ABSM(CDA) of Reliance Life

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Insurance Company Limited (page 42/paper book). The KYC of the said bank account was done by one Mr. Ajay Seth of ICICI Bank(employee no. 30289) on 30.04.2008 , wherein he certified that he met the customer in the office as well he verified the mobile number 9236553511 of the customer(page 37/paper book). He also certified that he confirm the identity and address provided in the relationship form having verified the documents against originals as produced by the applicant. He also verified that the form has been signed by the applicant in his presence. We have observed that the assessee at all stages of the proceedings before ld. CIT(A) and remand report proceedings , despite specific allegation of department never controverted that her husband was not working as Manager of Varanasi Branch of M/s. Oven Commerce Private Limited , except for bald statement made by ld. Counsel for the assessee and that too in a reply to question put by the Bench during the course of hearing , wherein ld. Counsel stated that her husband was working as class IV employee working with Oven Commerce Private Limited. No document/evidence such as appointment letter, Form No. 16 , Salary Certificate/salary slip , bank statement where salary was credited, ITR, educational qualification etc. of her husband to prove that he was merely working as Class IV employee of Oven Commerce Private Limited and not the Manager of said company, is brought on record by the assessee. The department has also claimed that the husband of the assessee was infact operating the aforesaid ICICI bank account of the assessee maintained with ICICI , Sigra Branch, Varanasi. The assessee has not even rebutted these allegation of department and merely bald statement is made that she never opened this bank account with ICICI Bank and it was opened fraudulently by M/s Oven Commerce Private Limited and misused by said company. The nexus of the assessee’s

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi husband working with Oven Commerce Private Limited, stands proved. The assessee never produced her husband before department for recording of his statement and examination by income-tax authorities , so that truth could have been unraveled. The assessee never filed any affidavit of the husband before the income-tax authorities. The assessee never asked department to record statement of Mr. Ajay Seth , an employee of ICICI bank who completed KYC while opening bank account with ICICI Bank nor asked department to produce him for his cross examination by her. The assessee never asked department to record statement of Mr. Nikhil Kulshrestha , CCE and Mr. Shailendra Saksena , ABSM(CDA) of Reliance Life Insurance Company Limited who authenticated the aforesaid ICICI bank account as salary/agent account nor asked department to produce them for their cross examination by her. The assessee never disputed the correctness of the facts recorded in the said ICICI bank account opening form such as her name, address, PAN, date of birth , Mobile number etc, but only contention is that it was fraudulently opened by M/s Oven Commerce Private Limited. The assessee never asked department to record statements of Directors of M/s Oven Commerce Private Limited namely Mr. Surendra Mishra and Mr. Hari Bansh SIngh nor asked departmet to produce them for their cross examination by her . The said bank account was opened on 30.04.2008 and the large number of transactions both by credit as well debits continued until 06.03.2010, which is almost 2 years. We have observed that in these 2 years, apart from transfer by way of debits to M/s Oven Commerce Private , there are various transactions for ATM withdrawal as well withdrawal of cash from the bank through cheque’s.It is incomprehensive to believe that ICICI Bank account in the name of the assessee continued for a period of 2 years and that too with correct address and mobile

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi number of the assessee, and huge transactions by way of credits and debits to said account were taking place but without assessee coming to know of the same. It is impossible to believe. The bank sends several sensitive financial information and documents connected with banking , through courier/speed posts to registered address of the account holder, such as account opening kit, cheque book, ATM/Debit card , bank statements etc. , which are sent directly to registered address of the customer holding bank account. The assessee has not denied that the mobile number mentioned in the account opening form does not belong to her/ or her husband, the bank send several important information’s as to day to day transactions through SMS sent on registered mobile of account holder, such as issue and dispatch of cheque book, issue and dispatch of ATM cards, clearance of cheques both incoming and outgoing, intimation of credits/debits happening through online banking , ATM transactions, bank balances, notification of charges debited etc., and it is impossible to believe that despite large number of transactions in this bank account running for 2 years, the assessee did not had knowledge of this bank account . It is impossible to believe that the assessee did not had knowledge of this bank account for almost 2 years.The assessee has claimed that she married against the wishes of her parents in 2004 through court marriage, and she is living with her husband in tenanted property in Varanasi, and that she is not having good relation with her parents and she rarely visit her parents. Thus, the claim is set up that the notices etc. sent by department during reassessment proceedings were never handed over to her by her parents due to strained relations. The assessee’s address recorded with bank as well with department is N 11/107, ZA , Ranipur, Mahmoorganj, Varanasii, U.P. 221010, which is claimed by the assessee is that this address is of the

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi assessee’s parent with whom she has strained relations and she rarely visit them. First of all it was the obligation of the assessee to have changed the address to her actual/correct address where she was staying with her husband in a tenanted property in Varanasi, in the data base of Income tax department by filing PAN correction form as well getting the address changed in Aadhar Card data base, and thus there was a failure on the part of the assessee to discharge her obligation, for which department cannot be penalized . The department is only obligated to send notices to the address of the assessee’s registered with their data base. Moreover, if prejudiced was caused to the assessee due to reassessment order framed against us, the assessee could have come with proper and satisfactory explanation before ld. CIT(A)/remand proceedings conducted by AO , as powers of ld. CIT(A) are co-terminus with the powers of the AO.The assessee herself appeared in person before ld. CIT(A) in first appellate proceedings, along with her counsel. Further, the assessee has only made this bald statement about her strained relations with her parent , due to marrying against their wishes. She never filed any affidavit of her parents with the department, nor asked department to record their statement’s as she never produced them before department for their examination and recording of their statements ,to unravel truth. It is a self serving statement of strained relations with parents made by the assessee, in an attempt to get out of tax liability. Moreover, her marriage took place in 2004, while bank account was opened in 2008 and department started proceedings u/s 147/148 in 2016, it is unbelievable based on preponderance of human probabilities that the parents will be so annoyed with their married daughter even after a long gap of time wherein now their married daughter is living happily with her husband, that even the important

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi correspondences/couriers/speed posts of their married daughter coming from bank/ income tax department will be withheld /concealed by parents from their married daughter which potentially could inflict legal injury and cause prejudice to their own married daughter, More-so, wherein both the parents as well married daughters are living in the same city. It is against preponderance of human probabilities especially in context of Indian society to accept that parents will not look after the well being of their married daughter, despite that she married against their wishes, and that too with a long passage of time as time is a great healer of wound. Every parent is a well wisher of their daughters and despite differences could not see that their married daughter is prejudiced and put to loss by their action of not handing over the relevant correspondences/ couriers/speed posts etc to her. Reference is drawn to provisions of Section 106 and 114(g) of the Indian Evidence Act, 1872, which stipulates: “Section 106. Burden of proving fact especially within knowledge When any fact is especially within the knowledge of any person , the burden of proving the fact is upon him.” “Section 114 Court may presume existence of certain facts The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Illustrations *** *** (g) that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it;”

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi The notices were also sent by department at the registered address of the assessee as is existing in the data base of the department which happens to be the address of her parents, and infact this address is continuing as of date , further as even in the appellate proceedings before ld. CIT(A) as well before tribunal, same address is mentioned by the assessee as her correspondence address. If the assessee was having any circumspection about her parents that they will not hand over to her communications / couriers/speed posts in time , then the assessee would never have given her parent’s address in the appellate proceedings. Thus, these contentions of the assessee that she was not in the know of the ICICI Bank account number 03100158299 in her name stands rejected, rather we hold that this bank account was in full knowledge of the assessee, and may be that the said account is opened and operated by her husband in her name to bring in the commission earned from Insurance Business. The stand of the assessee that she did not received notices from the AO during reassessment proceedings, also stand rejected. Similalrly, we hold that ITR’s filed for assessment year 2009-10 on 26.02.2011 ,was filed under the instructions of the assessee. The said ITR is supported by audit report. Now, the onus is on the the assessee to substantiate the transactions which were undertaken by the assessee during previous year relevant to the impugned assessment year, and any failure on the part of the assessee will have its own consequences as provided under the 1961 Act. The assessee has filed a copy of online FIR as well legal notice , but this is not sufficient because if serious prejudice is caused to the assesee as claimed by her because of alleged fraudulent opening of bank account in her name by M/s Oven Commerce Private Limited , then she should have taken further steps to ensure that the Chargesheet are filed in the Court of law against

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi culprits/accused and they are brought to justice, but merely filing FIR, legal notice or filing an affidavit at a very belated stage suffering from delay and latches will not be sufficient to discharge her onus, as the amount stood credited in her bank account , and she has to explain satisfactorily sources of credit in the said account. Thus, in our considered view, the assessee has failed to discharge her onus and the additions were rightly made by the AO and confirmed by ld. CIT(A), and we hold that the assessee fails to satisfactorily explain the sources of credit in her bank account maintained with ICICI Bank, Sigra , Varanasi as is required under the 1961 Act, and thus , we dismiss the appeal filed by the assesse on the merits of the addition . We order accordingly. One more legal ground is raised by the assessee, that the reassessment was framed by the AO without issuing notice u/s 143(2). The assessee never filed any return of income in pursuance to notice issued by the AO u/s 148, and hence the AO rightly invoked provisions of Section 144 and framed best judgment assessment. The AO duly issued notices u/s 142(1) as well SCN u/s 144 , dated 02.12.2016, and hence the mandate of Section 144 was duly complied with. Section 148 clearly stipulates“ the provisions of this Act shall, so far as may be , apply accordingly as if such return were return required to be furnished u/s 139”.But, the assessee never filed return of income in pursuance to notice issued u/s 148. Had the assessee filed return of income u/s 148, then the AO was obligated to issue notice u/s 143(2), but since no return of income was filed in pursuance to notice u/s 148, the AO rightly invoked provisions of Section 144 of the 1961 Act, passed best judgment assessment u/s 144 read with Section 147, dated 29.12.2016.Before proceeding further , it will be

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi profitable to refer to relevant provisions of Section 139, 142 ,143 and 144 of the 1961 Act as were in force at the relevant time , which are reproduced hereunder: “CHAPTER XIV PROCEDURE FOR ASSESSMENT Return of income. 139. [(1) Every person,— (a) being a company [or a firm]; or (b) being a person other than a company [or a firm], if 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, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Provided that a person referred to in clause (b), who is not required to furnish a return under this sub- section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who [during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or] at any time during the previous year fulfils any one of the following conditions, namely :— (i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or (ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or (iii) [***] (iv) has incurred expenditure for himself or any other person on travel to any foreign country; or (v) is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or (vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income [during any previous year ending before the 1st day of April, 2005], on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Provided further that the Central Government may, by notification in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply : Provided also that every company [or a firm] shall furnish on or before the due date the return in respect of its income or loss in every previous year : 37

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi [Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who at any time during the previous year,— (a) holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or (b) is a beneficiary of any asset (including any financial interest in any entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed: Provided also that nothing contained in the fourth proviso shall apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act:] [Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if 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, without giving effect to the provisions of >[clause (38) of section 10 or] section 10A or section 10B or section 10BA or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.] Explanation 1.—For the purposes of this sub-section, the expression "motor vehicle" shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Explanation 2.—In this sub-section, "due date" means,— (a) where the assessee [other than an assessee referred to in clause (aa)] is— (i) a company [***]; or (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the [30th day of September] of the assessment year; [(aa) in the case of an assessee [who] is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year;] (b) in the case of a person other than a company, referred to in the first proviso to this sub- section, the 31st day of October of the assessment year;

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (c) in the case of any other assessee, the 31st day of July of the assessment year. Explanation 3.—For the purposes of this sub-section, the expression "travel to any foreign country" does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification in the Official Gazette.] [Explanation 4.—For the purposes of this section "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person. Explanation 5.—For the purposes of this section "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary.] [(1A) Without prejudice to the provisions of sub-section (1), any person, being an individual who is in receipt of income chargeable under the head "Salaries" may, at his option, furnish a return of his income for any previous year to his employer, in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette, and subject to such conditions as may be specified therein, and such employer shall furnish all returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section (1), and the provisions of this Act shall apply accordingly.] [***]] [(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.] [(1C) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, exempt any class or classes of persons from the requirement of furnishing a return of income having regard to such conditions as may be specified in that notification.] [***] (3) If any person who [***] has sustained a loss in any previous year under the head "Profits and gains of business or profession" or under the head "Capital gains" and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, > [or sub- section (2) of section 73A] or sub-section (1) [or sub-section (3)] of section 74, [or sub-section (3) of section 74A], he may furnish, within the time allowed under sub-section (1) [***], a return of loss in

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1). [(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.] The following sub-section (4) shall be substituted for the existing sub-section (4) of section 139 by the Finance Act, 2016, w.e.f. 1-4-2017 : (4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. [ [(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]] [(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(4C) Every— (a) [research association] referred to in clause (21) of section 10; (b) news agency referred to in clause (22B) of section 10; (c) association or institution referred to in clause (23A) of section 10; (d) institution referred to in clause (23B) of section 10;

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in [sub-clause (iiiab) or] [sub- clause (iiiad) or] sub-clause (vi) or any hospital or other medical institution referred to in [sub- clause (iiiac) or] [sub-clause (iiiae) or] sub-clause (via) of clause (23C) of section 10; [(ea) Mutual Fund referred to in clause (23D) of section 10; (eb) securitisation trust referred to in clause (23DA) of section 10; (ec) venture capital company or venture capital fund referred to in clause (23FB) of section 10;] (f) trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10; [(g) body or authority or Board or Trust or Commission (by whatever name called) referred to in clause (46) of section 10; (h) infrastructure debt fund referred to in clause (47) of section 10,] shall, if the total income in respect of which such [research association], news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union [or body or authority or Board or Trust or Commission or infrastructure debt fund [or Mutual Fund or securitisation trust or venture capital company or venture capital fund]] is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(4D) Every university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35, which is not required to furnish return of income or loss under any other provision of this section, shall furnish the return in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(4E) Every business trust, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of its income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply* if it were a return required to be furnished under sub-section (1).] [(4F)Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(5) If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.] The following sub-section (5) shall be substituted for the existing sub-section (5) of section 139 by the Finance Act, 2016, w.e.f. 1-4-2017 : (5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. [(6) The prescribed form of the returns referred to [in sub-sections (1) and (3) of this section, and in clause (i) of sub-section (1) of section 142] shall, in such cases as may be prescribed, require the assessee to furnish the particulars of income exempt from tax, [assets of the prescribed nature and value, held by him as a beneficial owner or otherwise or in which he is a beneficiary] [, his bank account and credit card held by him], expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed. (6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to [in [***] this section, and in clause (i) of sub-section (1) of section 142] shall, in the case of an assessee engaged in any business or profession, also require him to furnish [the report of any audit [referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, a copy of such report together with proof of furnishing the report], the] particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.] (7) [***] [ (8)(a) [Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then [whether or not the [Assessing] Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2)], the assessee shall be liable to pay simple interest at [fifteen] per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source : Provided that the [Assessing] Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Explanation 1.—For the purposes of this sub-section, "specified date", in relation to a return for an assessment year, means,— (a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later; (b) in the case of every other assessee, the 30th day of June of the assessment year.] [Explanation 2.—Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section.] [(b) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 26433[or an order of the Settlement Commission under sub-section (4) of section 245D], the amount of tax on which interest was payable under this sub-section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and— (i) in a case where the interest is increased, the [Assessing] Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.]] [(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.] [(9) Where the 3[Assessing] Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the [Assessing] Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return : Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the [Assessing] Officer may condone the delay and treat the return as a valid return.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi Explanation.—For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :— (a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in; [ [(aa) the tax together with interest, if any, payable in accordance with the provisions of section 140A, has been paid on or before the date of furnishing of the return;]] (b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return; [(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;] (c) 8the return is accompanied by proof of— (i) the tax, if any, claimed to have been deducted [or collected] at source [***] and the advance tax and tax on self-assessment, if any, claimed to have been paid : [Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted or collected] at source, the return of income shall not be regarded as defective if— [(a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income;] (b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;] (ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974); (d) where regular books of account are maintained by the assessee, the return is accompanied by copies of— (i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet; (ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals; (e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor's report 46[and, where an 44

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi audit of cost accounts of the assessee has been conducted, under section 233B47 of the Companies Act, 1956 (1 of 1956), also the report under that section]; (f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.]

Inquiry before assessment. 142. (1) For the purpose of making an assessment under this Act, the [Assessing] Officer may serve on any person who has made a return [under section 115WD or section 13930[or in whose case the time allowed under sub-section (1) of section 139] for furnishing the return has expired] a notice requiring him, on a date to be therein specified,— [(i) where such person has not made a return [within the time allowed under sub-section (1) of section 139] [or before the end of the relevant assessment year], to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or :] [Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub- section,] [(ii)] to produce, or cause to be produced, such accounts or documents as the 37[Assessing] Officer may require, or [(iii)] to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the 40[Assessing] Officer may require : Provided that— (a) the previous approval of the [Joint Commissioner] shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts; (b) the [Assessing] Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year. (2) For the purpose of obtaining full information in respect of the income or loss of any person, the [Assessing] Officer may make such inquiry as he considers necessary.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi [(2A) If, at any stage of the proceedings before him, the [Assessing] Officer, having regard to [the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and] the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the [[Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner], direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the [[Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing] Officer may require : [Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard>.] (2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise. (2C) Every report under sub-section (2A) shall be furnished by the assessee to the [Assessing] Officer within such period as may be specified by the [Assessing] Officer : Provided that the [Assessing] Officer may, [suomotu, or] on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee. (2D) The expenses of, and incidental to, any audit under sub-section (2A) (including the remuneration of the accountant) shall be determined by the [[Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] (which determination shall be final) and paid by the assessee and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter XVII-D for the recovery of arrears of tax :] [Provided that where any direction for audit under sub-section (2A) is issued by the Assessing Officer on or after the 1st day of June, 2007, the expenses of, and incidental to, such audit (including the remuneration of the Accountant) shall be determined by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner in accordance with such guidelines as may be prescribed and the expenses so determined shall be paid by the Central Government.] (3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub-section (2) [or any audit under sub-section (2A)] and proposed to be utilised for the purposes of the assessment. [(4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.] 46

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

Assessment. 143. [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; [or] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; The following sub-clauses (iii) to (vi) shall be inserted after sub-clause (ii) of clause (a) of sub-section (1) of section 143 by the Finance Act, 2016, w.e.f. 1-4-2017 : (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80- IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made; (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation.—For the purposes of this sub-section,— (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a). (1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme67 for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme67 made under sub-section (1A), the Central Government may, by notification67 in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 68[2012]. (1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] 69[(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2).] Following sub-section (1D) shall be substituted for the existing sub-section (1D) of section 143 by the Finance Act, 2016, w.e.f. 1-4-2017 :

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary before the expiry of the period specified in the second proviso to sub-section (1), where a notice has been issued to the assessee under sub-section (2): Provided that such return shall be processed before the issuance of an order under sub-section (3). [(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.] [(3) On the day specified in the notice,— (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment; (ii) issued under clause (ii) of sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:] [Provided that in the case of a— (a) [research association] referred to in clause (21) of section 10; (b) news agency referred to in clause (22B) of section 10; (c) association or institution referred to in clause (23A) of section 10; (d) institution referred to in clause (23B) of section 10; (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such 79[research association], news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless— (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such [research association], news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and (ii) the approval granted to such [research association] or other association [or fund or trust] or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded :] [Provided further that where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are not being carried out in accordance with all or any of the conditions subject to which such university, college or other institution was approved, he may, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned university, college or other institution, recommend to the Central Government to withdraw the approval and that Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and the Assessing Officer:] [Provided also that notwithstanding anything contained in the first and the second provisos, no effect shall be given by the Assessing Officer to the provisions of clause (23C) of section 10 in the case of a trust or institution for a previous year, if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in such previous year, whether or not the approval granted to such trust or institution or notification issued in respect of such trust or institution has been withdrawn or rescinded.] [(4) Where a regular assessment under sub-section (3) of this section or section 144 is made,— (a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment ; (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. Best judgment assessment. 144. [(1)] If any person— (a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 [or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the [Assessing] Officer, after taking into account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an oppor-tunity of being heard, make the assessment ] of the total income or loss to the best of his judgment and determine the sum payable by the assessee [* * *] on the basis of such assessment : [Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.] [(2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]

Income escaping assessment. 147. If the [Assessing] Officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : 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 failureon 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: [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:]

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi [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 underassessed ; or (ii) such income has been assessed at too low a rate ; or (iii) such income has been made the subject of excessive relief under this Act ; 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.]

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi [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.] Issue of notice where income has escaped assessment. 148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be precribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] [Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] [Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.] [(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.] Time limit for notice. 149. [(1) No notice under section 148 shall be issued for the relevant assessment year,—

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi [(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.] Sanction for issue of notice 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.]

It is well settled that taxing statute are to be strictly construed , and if the language of taxing statute is simple , plain and unambiguous, the same shall be applied as

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi then there is no scope of intendment , howsoever the harsh consequences may be .It is also equally true that the assessee does not have any vested right in procedures. The assessee did not file his return of income in response to notice dated 29.03.2016 issued by AO u/s 148 . The AO issued notice u/s 142(1) dated 02.12.2016 as well SCN u/s 144 dated 02.12.2016, which was sent by speed post to the assessee’s address available on record but the said notices returned unserved. The AO served the said notice through Affixture on 10.12.2016. The assessee did not even comply with the said notices including SCN. The reassessment was framed by AO u/s 144 read with Section 147, vide best judgment assessment order dated 29.12.2016.

Perusal of provisions of Section 139, 142(1) , 143 ,144 and 148 will reveal that all these Sections falls under Chapter XIV which contains ‘Procedure for Assessment” . Thus, these class of sections deals with the procedures for framing assessment . The title heading of Section 139 is ‘Return of Income’ . Thus, this section deals with furnishing of return of income by different class of the assessee with the department. The assessee’s earns income during the previous year , which is assessed to tax in the assessment year. Thus, the assessee’s file their return of income wherein total income of the assessee are declared in the return of income filed with the department. The return of income is required to be furnished by the assessee’s before the due date as prescribed u/s 139(1). In case the assessee’s for some reasons are not being able to file return of income within due date as prescribed u/s 139(1) , then they are allowed to file return of income belatedly within the time prescribed u/s 139(4) . Section 139(4) provides that any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier . (As amended by Finance Act, 2016 w.e.f. 01.04.2017) Thus, it is true that even if return

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi of income is not filed within the time prescribed u/s 139(1), still the return of income can be filed by the assessee at any before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Thus, it merely provides that the return of income belatedly can be filed as provided u/s 139(4) and that said return shall not be treated as non-est. but that cannot be stretched to the extent that no best judgment assessment can be framed by AO without issuing notice u/s 143(2) even in such cases where the assessee fails to file return of income in pursuance to notice issued u/s 148, provided all the other conditions as otherwise stipulated u/s 144 read with Section 142(1) are met. Section 148 of the 1961 Act ,inter-alia, stipulates that “ the provisions of this Act shall, so far as may be , apply accordingly as if such return were return required to be furnished u/s 139”.The title heading of Section 142 is ‘Inquiry before Assessment’. Section 142 deals with ‘Inquiry before Assessment’and once the notice u/s 142(1) is issued by the AO, it triggers the initiation of inquiry before assessment. Relevant portion of Section 142(1) stipulates as under:

“Inquiry before assessment. 142. (1) For the purpose of making an assessment under this Act, the [Assessing] Officer may serve on any person who has made a return [under section 115WD or section 139[or in whose case the time allowed under sub-section (1) of section 139] for furnishing the return has expired] a notice requiring him, on a date to be therein specified,— [(i) where such person has not made a return [within the time allowed under sub-section (1) of section 139] [or before the end of the relevant assessment year], to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or :] [Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub- section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub-section,]

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi

The title heading of Section 143 is ‘Assessment’ , while title heading of Section 144 is ‘Best Judgment Assessment’. Thus, both Section 143 and 144 deals with Assessments ,while Section 143 deals with Regular Assessment , and on the other hand Section 144 deals with Best judgment Assessment, thus these are two altogether different classes of assessment stipulated under the 1961 Act , with a similar objective to assess and compute total income of the assessee’s chargeable to income-tax, one is a regular assessment u/s 143 while the other is best judgment assessment u/s 144. Section 143(1) stipulates processing of return of income filed u/s 139 , or in response to notice issued u/s 142(1), in the manner provided therein. We are presently not concerned with processing of return of income u/s 143(1). Then there is a regular scrutiny assessment conducted by Revenue , wherein return of income furnished by the assessee u/s 139, or in response to notice u/s 142(1) are scrutinized by AO in order to assess and compute total income chargeable to income-tax, if he consider it necessary or expedient to ensure the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax, then the AO is required to issue notice u/s 143(2) requiring assessee to produce evidence to substantiate its return of income. The assessment order is then passed by AO u/s 143(3) wherein total income of the assessee is assessed and computed by the AO and brought to tax. This is the procedure for framing of regular assessment u/s 143(3) read with Section 143(2). Alternatively , there is an another class of assessment which is called best judgment assessments made by the AO u/s 144. Both the assessment framed u/s 143 and 144 are different, albeit the objective is the same to assess and compute income chargeable to income-tax. Even processing of return u/s 143(1) is done to compute total income chargeable to tax as per provisions of the 1961 Act, so that the correct total income is charged to tax, wherein some arithmetical errors or incorrect claims

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi are adjusted to arrive at total income chargeable to tax, presently we are not concerned with Section 143(1). Section 148 deals with notice to be issued before framing reassessment and it requires assessee to file return of income in response to notice u/s148 , and then the provisions of Section 139 shall so far as may be applicable shall apply . The relevant extract of Section 148 are reproduced hereunder:

“Issue of notice where income has escaped assessment. 148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be precribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] *** *** *** *** *** ***”

In the instant case the assessee never filed any return of income in response to notice dated 29.03.2016 issued by the AO u/s 148. Even , the AO issued notice u/s 142(1) and SCN both dated 02.12.2016 , but the same remained un-complied with. The AO has made best judgment assessment by invoking Section 144. The perusal of Section 144(1) reveals that it deals with three different types of best judgment assessments which can be framed by AO under three different scenarios, which are as under:

Best judgment assessment. 144. [(1)] If any person— (a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 [or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub- section (2) of section 143, *** *** *** *** *** *** *** ***

All the three clauses are distinguished by word ‘or’ , i.e. they are mutually exclusive and independent of each other , and these three scenario’s are independent of each other , wherein the AO shall be free to make best judgment assessment provided all the stipulated conditions are met. Clearly, the case of the assessee does not fall under clause (c) above of Section 144(1), while it falls under clause (a) and (b) of Section 144(1). The assessee having failed to file return of income in pursuance to notice dated 29.03.2016 issued by AO u/s 148, and Section 148 of the 1961 Act ,inter-alia, stipulating that “ the provisions of this Act shall, so far as may be , apply accordingly as if such return were return required to be furnished u/s 139”.Thus, failure to file return of income in pursuance to notice u/s 148, will trigger clause (a) to Section 144(1).The AO issued notice dated 02.12.2016 u/s 142(1) asking assessee to furnish return of income for the impugned assessment year, but the assessee did not comply with the said notice. Thus, the assessee failed to comply with the terms of notice issued by AO u/s 142(1) . It will trigger clause (b) to Section 144(1). The AO issued SCN u/s 144 dated 02.12.2016 , and the assessee was given an opportunity to show cause as to why assessment may not be completed to the best of judgment of the AO, but the assessee did not comply with the said SCN also . Now, proceeding further, the Section 144 which deals with ‘Best Judgment Assessment’ , and it further provides:

*** *** *** ***

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi the [Assessing] Officer, after taking into account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an opportunity of being heard, make the assessment] of the total income or loss to the best of his judgment and determine the sum payable by the assessee [* * *] on the basis of such assessment : [Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.]

In the instant case, the AO after taking into account all relevant material which the AO gathered and after issuing SCN dated 02.12.2016 show causing as to why the assessment should not be completed to the best of judgment of the AO wherein even opportunity of being heard was provided by AO to the assessee , and then assessment was framed by the AO to the best of his judgment against assessee , wherein total income for the impugned assessment year was computed by AO, vide assessment order dated 29th December , 2016 u/s 144 read with Section 147 passed by the AO. Thus, in our considered view, the AO duly complied with the mandate of provisions of Section 144 which deals with a different class of assessment viz. best judgment assessment. Had the assessee filed return of income in pursuance to notice dated 29.03.2016 issued by AO u/s 148, or even in compliance of terms of issue of notice u/s 142(1)dated 02.12.2016 , then Section 143(2) would have got triggered and then the AO would have been obligated to frame assessment u/s 143(3) read with Section 147, and not best judgment assessment u/s 144 read with Section 147 . If the assessee did not file return of income in response to notice u/s 148 , then the AO will be competent to frame best judgment assessment and no notice u/s 143(2) would have been required. The second situation is clause (b) to Section 144(1), where there was failure on the part of the assessee to comply with the terms of notice issued by the AO u/s 142(1), and hence the AO shall be competent to frame best judgment assessment u/s 144 and no notice u/s 143(2)

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi shall be required. We are seized presently to the situation which falls under clause (a) and (b) of Section 144(1). The third situation envisaged u/s 144(1) clause (c) is the situation where the assessee having filed return of income, fails to comply with all the terms of a notice issued by AO u/s 143(2), then again Section 144 would get triggered and the AO shall be competent to frame best judgment assessment and no further notice u/s 143(2) shall be required to be issued . Had the assessee filed return of income complying with the terms of notice u/s 142(1) or filed return of income in pursuance to notice issued by the AO u/s 148 , then AO would have been under an obligation to issue notice u/s 143(2) and assessments would have to be completed u/s 143(3) read with Section 147, but since there was failure of the assessee to comply with the terms of notice dated 02.12.2016 issued u/s 142(1) nor return of income was filed in pursuance to notice dated 29.03.2016 issued by the AO u/s 148 , as the return of income was never filed during reassessment proceedings, then in that case , we hold that there was no requirement of issuing any notice u/s 143(2) by the AO , and assessment was rightly framed by AO u/s 144 read with Section 147, which was done after complying with the conditions as are stipulated u/s 142(1) r.w.s. 144 r.w.s. 147, and hence we uphold the reassessment order dated 29.12.2016 passed by AO for assessment year 2009-10 , as valid and legal. Section 144 engrains principle of natural justice , before making best judgment assessment, which stood duly complied with by the AO in the instant case before us. Once the language of the statute is plain, simple, clear and unambiguous, full effect is to be given, and no part could be held to be surplus, as Parliament was fully aware while enacting law. Thus, we reject this contention of the assessee that reassessment is bad in law owing to non issuance of notice u/s 143(2). We order accordingly.

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi 8. Since facts in appeal in ITA no. 213/Vns/2019 for assessment year 2010-11 are similar and common issues are involved as were prevailing in assessment year 2009-10, our decision in ITA no.214/Vns/2019 for assessment year 2009-10 shall apply mutatis mutandis to appeal in ITA No. 213/Vns/2019 for assessment year 2010-11. Thus,the appeal filed by assessee for assessment year 2010-11 stands dismissed. We order accordingly.

Order pronounced on 28.12.2022 at Allahabad, U.P, in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 I do not subscribe to the reasoning for ground-5 given from Page No. 36-61of the order but concur with the conclusion. Sd/- Sd/- 27/12/2022 [VIJAY PAL RAO] [RAMIT KOCHAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28/12/2022 Place: Allahabad/Varanasi, U.P. KD Azmi Copy forwarded to: 1. Appellant –Smt. Mousami Choudhury, House No. 11/107-ZA, Village Ranipur, District Varanasi- 273001, U.P. 2. Respondent –The Deputy Commissioner of Income Tax, Range-2, Varanasi, U.P. 3. The ld. Sr.DR, ITAT, Circuit Bench, Varanasi, U.P. 62

ITA Nos. 214 & 213/VNS/2019 Assessment Years: 2009-10 & 2010-11 Mousami Choudhury, District Varanasi v. The Deputy Commissioner of Income Tax, Circle-2, Varanasi 4. The ld. CIT, Varanasi,U.P. 5. The CIT(A), Varanasi, U.P. 6. The Guard File.

Sr. P.S.