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2024 (8) TMI 220 - AT - Income TaxValidity of the notice issued u/s. 148 in absence of DIN - HELD THAT - . We may herein observe that the issue concerning communication of assessment order without mentioning of DIN was decided by Hon ble Delhi High Court in the case of Commissioner of Income-tax Vs. Brandix Mauritius Holdings Ltd. 2023 (4) TMI 579 - DELHI HIGH COURT in favour of the assessee, but Hon ble Apex Court, wherein an interim stay order has been passed 2024 (1) TMI 276 - SC ORDER . Accordingly, the order of Hon ble High Court of Delhi a/w ITAT, Delhi 2022 (11) TMI 34 - ITAT DELHI has been kept under status quo We are unable to comprehend, accept and to concur with the contention of the Ld. AR that the notice u/s. 148 of the Act, dated 26.02.2020 issued without mentioning of DIN shall render the same as was never issued in terms of CBDT circular, and thus, is bad in law. Accordingly, we, thus, in terms of our aforesaid observations, reject the contention of the Ld. AR. Accordingly, the reliance placed by the Ld. AR on the judgment of Hexaware Technologies Limited 2024 (5) TMI 302 - BOMBAY HIGH COURT would not carry his case any further. The impugned assessment had been framed by the A.O de-hors any valid service of notice u/s. 148 - as can be gathered from the assessment order, the assessee had in the course of assessment proceedings furnished copy of an incomplete deed to explain the source of the cash deposits in his bank account. Accordingly, as it is a case where the assessee had participated in the assessment proceedings but had failed to raise any objection as regards the service of notice u/s. 148 of the Act, therefore, he stands precluded of his right from raising such objection in the course of present appellate proceedings. Before proceeding any further, we deem it fit to cull put the provisions of Section 292BB wherein as held where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection. Thus the claim of the assessee as regards invalidity of the assessment framed by the A.O in absence of valid service of notice u/s. 148 of the Act dated 26.02.2020 being devoid and bereft of any merit cannot be accepted. Cash deposits as sourced out of the sale consideration of agricultural land that was sold by the assessee along with family members - Sale consideration mentioned in the registered sale deed ( as deposed by the assessee in his affidavit dated 25.10.2023) cannot be dislodged or substituted by that mentioned in the unregistered agreement to sell ( uncertified copy placed on our record), which is found to be nothing short of a dumb document, therefore, the aforesaid explanation of the assessee as regards the source of the cash deposits in his bank account cannot be accepted. Accordingly, as the Ld. AR had failed to substantiate the source of the cash deposits therefore, we find no infirmity in the view taken by the CIT(Appeals) who had rightly sustained the addition to the said extent. We, thus, in terms of our aforesaid observations, finding no infirmity in the view taken by the CIT(Appeals), uphold the same. Decided against assessee. Penalty u/s. 271(1)(c) - As the assessee had failed to substantiate his explanation as regards the source of the cash deposits in his bank account during the subject year and there is nothing on record which would prove that the same was bonafide and all the facts material to the computation of his total income were disclosed by him, therefore, lower authorities had justifiably saddled him with penalty as per Explanation 1 of Section 271(c) of the Act. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(Appeals) who had rightly sustained the penalty imposed by the A.O u/s. 271(1)(c) - Decided against assessee.
Issues Involved:
1. Validity of proceedings initiated under Sections 147, 148, 149, and 151 of the Income-tax Act, 1961. 2. Service of notice under Section 148 of the Income-tax Act, 1961. 3. Addition of Rs. 6,62,000/- as undisclosed income. 4. Imposition of penalty under Section 271(1)(c) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Validity of Proceedings Initiated under Sections 147, 148, 149, and 151 of the Income-tax Act, 1961: The assessee challenged the initiation of proceedings under Sections 147, 148, 149, and 151 on the grounds that the notice issued under Section 148 did not bear a Document Identification Number (DIN) as required by CBDT Instruction No. 19 of 2019. The Tribunal, however, did not find merit in this argument, noting that the issue concerning communication of assessment orders without mentioning DIN was sub-judice before the Hon'ble Supreme Court. Hence, the contention that the notice under Section 148 was invalid due to the absence of DIN was rejected. 2. Service of Notice under Section 148 of the Income-tax Act, 1961: The assessee argued that the notice under Section 148 was not properly served, as it was sent to an incorrect email address and there was no evidence of physical service. The Tribunal observed that the assessee had participated in the assessment proceedings and had not raised any objection regarding the service of notice during those proceedings. Citing Section 292BB of the Act, which precludes an assessee from raising objections on the service of notice if they have participated in the proceedings, the Tribunal dismissed this ground of appeal. 3. Addition of Rs. 6,62,000/- as Undisclosed Income: The assessee claimed that the cash deposits of Rs. 17,92,000/- in his bank account were sourced from the sale of agricultural land. The Tribunal noted that the sale consideration as per the registered sale deed was Rs. 11.30 lacs, whereas the assessee claimed the actual sale consideration was Rs. 27.90 lacs based on an unregistered "agreement to sell." The Tribunal rejected this claim, emphasizing that the sale consideration mentioned in the registered sale deed could not be dislodged by an unregistered document. Consequently, the Tribunal upheld the addition of Rs. 6,62,000/- as undisclosed income. 4. Imposition of Penalty under Section 271(1)(c) of the Income-tax Act, 1961: The CIT(Appeals) had sustained a penalty of Rs. 75,000/- under Section 271(1)(c) for concealment of income. The Tribunal concurred with the CIT(Appeals), noting that the assessee failed to substantiate the source of the cash deposits and did not disclose all material facts. The Tribunal referenced Explanation 1 to Section 271(1)(c), which creates a presumption of concealment if the assessee fails to offer a bona fide explanation. The Tribunal upheld the penalty, finding no infirmity in the CIT(Appeals)' decision. Conclusion: Both appeals filed by the assessee were dismissed. The Tribunal upheld the validity of the proceedings initiated under Sections 147 and 148, confirmed the addition of Rs. 6,62,000/- as undisclosed income, and sustained the penalty of Rs. 75,000/- under Section 271(1)(c). The order was pronounced in open court on 25th July 2024.
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