2024 (12) TMI 378 - AT - Income Tax

Validity of reopening of assessment u/s 147 - disallowance of expenses u/s 69C being unexplained - HELD THAT - We find that the AO undisputedly did not make any addition in respect of the items of income which were subject matter of the notice u/s 148A(b) and order u/s 148A(d) of the Act. The copy of the notice issued u/s 148A of the Act in clause (b) with annexure is available at paper book page no.1-2. We note that the case of the assessee was reopened on the ground that assessee has transactions relating to rent receipt and renewal of FDS, etc. Thereafter, the order passed under clause (d) of Section 148A of the Act dated 07/04/2022, stating there that the notice issued u/s 148A(b) was not complied with till 25.03.2022 and the income has escaped assessment for A.Y. 2018-19 on account of TDS (194I) Rent for BNB Paribas, Time Deposits and TDS (194A) Interest for IDBI Bank Ltd. AO did not make addition in the assessment order qua the subject information in order passed u/s 148A(d) of the Act. Once, no addition was made in respect of the items of income, which were stated by the ld. AO were escaped in the order passed under clause (d) of Section 148A of the Act, then no other addition can be made as the AO has no jurisdiction as well as on the ground that the very foundation of the proceedings are demolished. Appeal of the assessee is allowed.

Summary

The appeal was against the order of the National Faceless Appeal Centre for AY 2018-19. The AO did not make any additions as per the notice issued under section 148A(b) and order under section 148A(d) of the Act. The AO made a disallowance of expenses under section 69C. The tribunal quashed the reopening proceedings and the assessment. The appeal of the assessee was allowed.