2024 (8) TMI 1180 - AT - Income Tax

Addition u/s. 69A - non-payment of advance tax - case of the assessee that the document on which the assessment proceedings initiated itself is based on the wrong information and challenged the entire addition and claimed that assessee is not liable to pay any advance tax by disputing the entire addition - HELD THAT - Since the assessee has alleged that her income is not chargeable for tax, there cannot be any obligation upon the assessee to pay the advance tax, therefore in our opinion invoking the provision of section 249(4) of the act by the CIT(A) is erroneous. Since the Tribunal being a final fact finding authority and considering the fact that the assessee has advanced the argument on the merit of the case as well, we have gone through the material produced by the assessee. As found that the AO based on the information received from National e-Assessment Centre, Delhi initiated proceedings u/s. 148 of the act wherein an information has been provided that the assessee had bought an immovable property from Shri Madhava Gatti for sale consideration which was the sole basis for the initiation of the proceedings. AR has produced the said information at page No. 63 followed by the sale deed of the parties thereon. As per the said document, the sale deed has been executed by Mr. B.N. Radhakrishna Rao and Mr. U. Ramdas Achar in favour of Mr. Nedle Rama Bhat for sale consideration of Rs. 45 Lakhs in respect of the property bearing survey no. 65/2A1P1 measuring 11 cents situated at Kavoor village, Mangalore Taluk, wherein the assessee is neither the purchaser nor the vendor. The assessee has produced her sale deed at page No. 20 which depicts that Mr. Madhava Gatti has sold a property bearing R.S. No. 189/2A measuring 0-05.75 acres situated at Kotekar Village, Mangalore Taluk for a sale consideration of 31 Lakhs (pages 20-31 of the paper book). Thus it is crystal clear that the Ld.AO made addition on the basis of wrong assumption of facts observing that assessee has made purchase of property for Rs. 45 Lakhs, contrary to the fact that the assessee had purchased the property for Rs. 31 lakhs. Apart from the same, assessee has also produced the source for the said transaction which being a loan availed from Vijaya Bank, Mangalore. Thus the basis for making the addition itself does not survive. Considering the above facts and circumstances of the case, we are inclined to delete the addition made by the Ld.AO u/s. 69A - Appeal of the assessee is allowed.

Issues:
1. Condoning delay in filing the appeal.
2. Validity of assessment order based on wrong information.
3. Dismissal of appeal by CIT(A) for non-payment of advance tax.
4. Addition of unexplained money under section 69A.
5. Jurisdictional validity of reassessment.
6. Tax liability under sections 115BBE and 234B.

Condoning delay in filing the appeal:
The appellant filed an appeal before the Tribunal with a delay of 89 days, citing reasons related to pursuing remedies under section 154 of the Act. The Department argued that there was no valid reason for the delay. The Tribunal, after considering the explanations provided, condoned the delay and admitted the appeal for adjudication.

Validity of assessment order based on wrong information:
The assessment was initiated based on information from the National e-Assessment Centre, alleging a property purchase for Rs. 45 Lakhs by the assessee. However, the actual transaction was for Rs. 31 Lakhs, supported by documents. The Tribunal found the addition of Rs. 14 Lakhs as unexplained money to be erroneous and lacking factual basis. Consequently, the Tribunal deleted the addition.

Dismissal of appeal by CIT(A) for non-payment of advance tax:
The CIT(A) dismissed the appeal on the grounds of non-payment of advance tax, invoking section 249(4) of the Act. The appellant contested this, stating that the initiation of assessment proceedings was illegal due to incorrect information. The Tribunal agreed with the appellant, ruling that without the disputed addition, there was no tax liability, and hence, no obligation to pay advance tax.

Addition of unexplained money under section 69A:
The AO made an addition of Rs. 14 Lakhs as unexplained money under section 69A of the Act. The appellant challenged this addition before the CIT(A) and subsequently before the Tribunal. The Tribunal found the basis of the addition to be incorrect and lacking merit, leading to the deletion of the said addition.

Jurisdictional validity of reassessment:
The appellant contended that the reassessment was void ab initio due to the lack of jurisdictional requirements under section 148 of the Act. The Tribunal, after examining the facts and documents, concluded that the reassessment was based on incorrect assumptions and lacked legal basis. Consequently, the reassessment was canceled.

Tax liability under sections 115BBE and 234B:
The appellant raised concerns regarding the tax imposed under sections 115BBE and 234B of the Act. The Tribunal, after analyzing the facts and circumstances, found no justification for sustaining the tax liability imposed under these sections. Therefore, the Tribunal ruled in favor of the appellant, allowing the appeal.

This judgment addresses various issues, including condoning the delay in filing the appeal, the validity of the assessment order based on incorrect information, dismissal of the appeal for non-payment of advance tax, addition of unexplained money, jurisdictional validity of reassessment, and tax liabilities under specific sections of the Act. The Tribunal found in favor of the appellant on multiple grounds, highlighting errors in the assessment process, lack of tax liability due to incorrect additions, and procedural flaws in the reassessment. Ultimately, the appeal was allowed, and the additions made by the AO were deleted.

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