2023 (9) TMI 383 - AT - Income Tax

Reopening of assessment u/s 147 - As assessee argued that the notice u/s 148 was issued at a wrong address and there was no application of mind by the assessing authority as the reason for reopening of the assessment as per the AO was that the assessee had purchased immovable property - HELD THAT - Validity of initiation of proceedings for reopening of assessment is concerned AO was having some information regarding purchase of immovable property. The assessee had not filed his return of income. Therefore the AO was justified in initiating the proceedings u/s 147 of the Act. The assessee stated that the notice was issued on a wrong address. However it is on record that the assessee has participated in the proceedings. Therefore this ground also lacks merit. Addition u/s 69A - As stated by the assessee that assessee was having only source of income being the agriculture income. AO has not brought any other material on record suggesting that the assessee was having any other income. Assessee had clearly stated that the amount was also received from his father. AO picked up the statement partly and did not consider the fact that the father of the assessee was having a bigger piece of land. The authorities below have not made any verification of the statement made in the affidavit of father of the assessee that he had also sold trees out of which he gifted money to his son. Therefore considering the totality of facts and in the absence of any material rebutting the averments made in the affidavit of father of the assessee AO was not justified in making the impugned addition and rejecting the plea of the assessee that he had also received money from his father apart from the agricultural income. Appeal of the assessee is partly allowed.

Summary

Issues involved:
The issues involved in the judgment are the legality of proceedings initiated under section 147 of the Income Tax Act, 1961 for the assessment year 2009-10, the validity of the addition made under section 69A of the Act, and the correctness of the appellate order passed by the Commissioner of Income Tax (Appeals), Meerut.

Proceedings initiated under section 147:
The appeal challenged the initiation of proceedings under section 147 of the Income Tax Act, 1961. The appellant contended that the jurisdiction assumed by the assessing officer was illegal, as the proceedings were initiated without proper application of mind. It was argued that the assessing officer had not specified the reasons for forming a belief that taxable income had escaped assessment. However, the Tribunal found that the assessing officer was justified in initiating the proceedings based on information regarding the purchase of an immovable property by the appellant. Despite the appellant's claim that the notice was issued to the wrong address, the Tribunal noted the appellant's participation in the proceedings, leading to the rejection of this ground.

Validity of addition under section 69A:
The addition of Rs. 12,85,833 made by the assessing officer under section 69A of the Income Tax Act, 1961 was challenged by the appellant. The Tribunal observed that the assessing officer had not provided any material suggesting the appellant had income other than agricultural income. The appellant had explained that the amount in question was received from his father, who had sold trees and gifted money to him. The Tribunal found that the assessing officer did not adequately consider this explanation and deleted the addition, concluding that the assessing officer was not justified in making the impugned addition.

Appellate order by CIT(A):
The appellant further contested the appellate order passed by the Commissioner of Income Tax (Appeals), Meerut. The Tribunal noted that the appellant's submissions challenging the jurisdiction were ignored by the CIT(A). Consequently, the Tribunal partially allowed the appeal, deleting the addition made by the assessing officer under section 69A of the Act. The order was pronounced in open court on 5th September 2023.