9911796707
TMI Blog2024 (8) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is undisputedly NRI as on the date of issue of notice u/s. 148 of the Act. Thus, based on this evidence placed on record and the same being not controverted we are of the considered view that when the assessee is non-resident as on the date of issue of notice u/s. 148 of the Act. The bench further noted from order sheet entry dated 16.03.2023 that Faceless Assessment Unit (FAU) requested through NaFAC to transfer out this case from them because the case is of non-resident individual or of a foreign company and can be assessed only at international charge. Thus, the contention raised by the assessee has already been observed by the FAU in the assessment proceeding when the case was transmitting from ITO, Ajmer to FAU. We are of the considered view that the ITO, Ward-2(2), Ajmer has no jurisdiction when the notice u/s. 148 was issued on 30.03.2022. Therefore, the in order to sustain the validity of the reassessment, a reassessment notice is required to be issued by an Assessing Officer having proper jurisdiction over the assessee to whom such notice has been issued. Based on the evidence placed on record and after giving sufficient time to the revenue to rebut the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orily prescribed u/s 144C(5) of the Act. Thus, the impugned order of DRP suffers from the violation of natural justice and being nullity, the same couldn't have been taken cognizance nor could have been followed by the assessing officer. 3.2. The impugned assessment order dt.29.12.2023 therefore, is without jurisdiction and having been passed in absence of a valid draft assessment order passed by the DRP and therefore, deserves to be quashed. 4. The Id. AO erred in law as well as on the facts of the case in framing the assessment u / s 144 r.w.s 147 of the Act without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed. 5.1. Rs. 69,90,000/- The Id. AO erred in law as well as on the facts of the case in considering the entire sale consideration as the Long Term Capital Gain (LTCG) in complete disregard to the other specific binding provisions of law contained u/s 45 r.w.s. 48 of the Act. The addition of the LTCG being contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not file his ITR for the A.Y. 2018-19. There was information available with the department that the assessee had sold an immovable property for a sale consideration of Rs. 69,90,000/-, as the return of income was not filed the transaction remained unverified. Accordingly, after recording the reasons for escapement assessment, notice u/s 148 of the Act was issued to the assessee on 30.03.2022 with prior approval taken from the PCIT, Udaipur. The assessee did not file his ITR for the year under consideration even after issue of notice u/s. 148 of the Act. 3.1 During the assessment proceedings, statutory notices were issued to the assessee requiring him to furnish relevant documentary evidence to substantiate the transaction carried out by the assessee. Despite providing sufficient opportunity, the assessee did not furnish any documentary evidence and failed to explain and justify the said transaction. Considering these facts, the sale consideration of Rs. 69,90,000/- remain unexplained and falls under the purview of unexplained money u/s 69A of the Act. Accordingly, draft assessment order u/s 144C of the Act was passed on 29.03.2023 proposing an addition of Rs. 69,90,000/-. 3.2 Aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... didn't comply to the AO's notices. The AO's proposed addition is on account of following fact as mentioned the draft assessment order. During the assessment proceedings, the assessee was asked regarding the source of funds used to purchase the said immovable property and doing the above-mentioned transactions vide notice u/s 142(1) dated 02.01.2023, 16.01.2023, 19.03.2023 and show cause notice dated 17.02.2023, 25.03.2023. The assessee in response did not produce any documentary evidence regarding the income generated from the above sale transactions. The assessee only stated that ...we are in the process of collecting the required date in respect to the sale of property. Hence we will submit the same as soon as possible once we collect them. The assessee also raised objections during the assessment proceedings, which were disposed of. The assessee, despite providing sufficient opportunity, did not furnish any documentary evidence at this stage required to prove anything. The fact that there was receipt of money or conversion of notes is itself prima facie evidence against the assessee on which the Department can proceed in absence of good explanation. Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather filing objection before the AO. Further, the assessee has also claimed indexation of cost of improvement for construction made in various financial years. In support of cost of improvement the assessee has only submitted a valuation report mentioning therein year wise cost of construction. No supporting evidence of work order, contract of work, payment made related to construction work bank statement etc have been submitted by the assessee. 2. The assessee has claimed to have been sold the said property for a sale consideration of Rs. 69,90,000/- during the FY. 2017-18. The assesse has accepted this fact in the computation submitted before, the Hon'ble DRP Thus, assessee has been engaged in this property transaction (sale of property) during the F.Y. 2017-18 Hon'ble DRP has also categorically mentioned in the order passed u/s 144C(5) that the assesse neither presented (or through authorized representative) before the DRP nor sought any adjoumment. The assesse further could not substantiate the cost of improvement of property allegedly done in multiple years. During the assessment proceedings before the AO as well as proceedings before Hon'ble DRP, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the present appeal on the grounds as stated here in above. To support the various grounds so raised by the ld. AR of the assessee, he has filed the written submissions and the same is reproduced herein below: Brief General Facts: Notice u/s 148 dt. 30.03.2022 (PB-II/102) was sent on dt.13.04.2022. The assessee had sold an immovable property of Rs. 69,90,000/- and being a case of NRI, draft assessment order purposing certain valuation in the income returns. In response, the appellant filed detailed objections u/s 144C(1) of the IT Act, 1961 which were decided by the Dispute Resolution Panel ( DRP for short) vide its order passed u/s 144C (5) on dt. 28.11.2023 (PB 87-101), rejecting the objections so raised, holding as under: 3.1 The assessee has challenged the proceedings initiated under section 148 of Income Tax Act on the issue of Jurisdiction and also questioned on technicalities regarding issue of 148 notice to him. On perusal of the assessment records, it is seen that the notice under section 148 was issued after the approval of competent authority. Further, the DRP under section 144C(8) can confirm, reduce or enhance the variations proposed in the draft order so, however, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after passing impugned order u/s 148A(d) (PB 79-80) and also impugned notice u/s 148 both dt.30.03.2022 whereas, the correct and legally valid jurisdiction remained with the international charge Circle (INTL. TAX), Jaipur. Accordingly, objections were raised letters dt.27.04.2023 (PB 3-12) and again vide another letter dt.23.07.2023 (PB 71-72). The same was disposed of by the ACIT Circle (INTL. TAX), Jaipur vide order dt.25.03.2023 (PB 77-78), rejecting the same. Submission: 1. Impugned Notice u/s 148 issued without Jurisdiction: 1.1. At the outset it is submitted that the impugned order u/s 148(d), notice under section 148 both dated 30.03.2022 and notices u/s 142 for AY 2018-19, are completely devoid of jurisdiction in as much as the Income Tax officer, Ward 2(2), Ajmer was not vested with a valid jurisdiction in terms of S.120 read with 124 of the Act. The facts are not disputed that the assessee is a non-resident Indian. He has been residing outside India since last almost more than 25 years. He came back to India only on dated 22nd June 2022 (copy of passport enclosed PB 18-19). Thus, in any case during the relevant financial year 2017-18(AY-2018-19), he completely remained ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders issued under sub-section (1) or sub- section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or] Additional Director or] Joint Commissioner or Joint Director] who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act 1.2.3. The very fact that the Assessing Officer, Circle (Intl Tax), Jaipur was vested with the jurisdiction to Act as an AO, is fully supported by the PAN Profile and the jurisdictional details (PB-II 105) of the assessee which clearly shows the Assessing Officer holding the charge was the International Taxation Charge. In this background only, when the assessee, after receiving the impugned notice u/s 148 sent on dt. 13.04.2022, raised his objections vide letter dated 23.07.2023 (PB 70-72) no reply came from the ITO Ward 2(2) Ajmer but strangely the same was replied by Officer, Circle (Intl Tax), Jaipur admitting, the very fact and the contention of the assessee that she might be holding the correct jurisdiction over this assessee but not the ITO Ward 2(2) Ajmer who issued the impugned n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 18] [In favour of assessee ] C. Abdul Azeez Haroon vs DCIT (International Taxation) (2020) 317 CTR 610 (Mad) (DC 14-17) held that: Reassessment Notice under s. 148 Validity of notice issued by AO having no jurisdiction For asst. yrs. 2012-13 to 2015-16, intimations under s. 143(1) have been issued by the Central Processing Centre in respect of the returns filed Assessee's case is that during the financial year relevant to asst. yr. 2009-10 he had shifted his residence from Madurai to Shimoga, Karnataka, carrying on business at Shimoga as well and the respondent, vide communication dt. 8th Jan., 2016 admits these facts, after verification of records, to the effect that the assessee, as on date and since asst. yr. 2012-13 is an assessee on the file of the ITO at Shimoga If jurisdiction thus vested with the ITO at Shimoga, an alternate assessing authority assuming jurisdiction of the assessee's file can be only by transfer of the file No order transferring the file of the assessee from the jurisdiction of the ITO, Shimoga to the Dy. CIT, International Taxation, Madurai, has been produced In the facts and circumstances of the present case where the assessee is seen to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where assessee contends that action of Assessing Officer is without authority of law and therefore, wholly without jurisdiction - Held, yes - Whether since ITO, Ward-1(3), Bhilai at time of initiating proceedings and issuance of notice under section 148 dated 9-3-2018 was not vested with any jurisdiction over case of assessee, assessment framed on basis of' reasons to believe' along with notice under section 148 dated 9-3-2018 issued by ITO, Ward-1(3), Bhilai, i.e. a non- jurisdictional Officer, could not be sustained and was liable to be quashed - Held, Yes The Hon ble ITAT relied upon the decisions in the cases of CIT v. Ramesh D. Patel (2014) 42 taxmann.com 540 and Bansilal B. Raisoni Sons v. Asstt. CIT (2019) 260 Taxman 281. Resultantly, in absence of any notice issued u/s 148 validly, the resultant assessment order u/s 148A(d) dated 30.03.2022 deserves to be quashed. 2. No Valid Approval obtained u/s 151 and impugned notice u/s 148 is barred by limitation u/s 149: New Law to Apply: 2.1. That in the recent past, the Finance Act, 2021 was passed by the Parliament. Amongst various other amendments made in the Finance Act, 2021, Sections 147, 148, 149 and 151 of the Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified authority u/s 151 1. Reopening made within 4 years from the end of the relevant A.Y. Joint Commissioner (JCIT) 2. Reopening made after 4 years from the end of the relevant A.Y. Pr CCIT or CCIT or PCIT or CIT The issue involved is no more res-integra in as much as various high courts have now taken this view and quash the notices issued in violation of S.151. 2.3.1 A recent and very detailed decision is in the case of Siemen Financial vs DCIT (2023) 154 taxmann.com 159 (Bombay) (DC 40-73) wherein it was held as under: Whether thus, TOLA only sought to extend period of limitation and would not affect scope of section 151 and sanction of specified authority was to be obtained in accordance with law existing when sanction was to be obtained - Held, yes - Whether since in instant case Assessing Officer issued reopening notice beyond period of three years and prior approval was taken from Principal Commissioner, Assessing Officer could not rely on provisions of TOLA and approval was required to be taken as per provisions of amended section 151 from Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General and thus, impugned order and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Sections 148A(d) and 148 of the Act are hereby quashed and set aside. 6. Petition disposed. No order as to costs. All rights and contentions are kept open. 2A. Also therefore, the impugned notice u/s 148 is barred by limitation u/s 149(1)(a). Therefore, the impugned notice and order deserves to be quashed. So also the consequent assessment order. 3. No Income Escaped Assessment: 3.1 No valid information as contemplated u/s 148: 3.1.1 A perusal of SCN u/s 148A(b) dated 17.03.2022 shows the only information available, based by the AO to alleged income escaping assessment is that, during the year under consideration, the assessee sold immovable property for Rs 69.90 Lacs on dated 28.07.2017 but no return of income has been filed for AY 2018-19. As per AO, this information suggest that the income of 69.90 Lac is chargeable to tax has escaped assessment in AY 2018-19. Again in the order u/s 148A(d) dated 30.03.2022, in para 5 similar opinion has been framed by the AO that income of the assessee of Rs 69.90 Lacs has escaped assessment and it was a fit case to issue notice u/s 148 of the Act. However, it is not clarified precisely that there was some taxable as per the Act income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e generated from the transaction of the sale of the said residential house was not explained with the help of documentary evidences. But, then finally the AO alleged that the assessee did not produced any justification or documentary evidences regarding the above mentioned sale transaction of the immovable property, therefore, the sale consideration of Rs 69.90 lacs remained unexplained and falls under the purview of unexplained money u/s 69A of the Act. Thus, initially the AO proposed for making an addition (apparently) from the Capital Gain arising from the sale of the residential house for Rs 69.90 lacs on 28.07.2017 but then finally in draft assessment order he sifted to the addition made u/s 69A of the Act. In the impugned assessment order he invoked S.69A first but at the end he made addition on account of LTCG. 3.1.4 From this what emerges is that: i. The information based by the AO to initiate proceeding u/s 147/148 is not the information as contemplated under law. The AO blindly proceeded on the information by picking the gross figure of Rs 69.90 Lacs and considered the same to be income escaping assessment but without showing any provision of law or head of income. ii. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on account of LTCG as evident from the discussion made by him starting from para 4 pg. 4 and ending at pg.7. Undisputedly, the variation made on account of LTCG was not a part of the draft order as stated above and this way, no opportunity was given to the Assessee by way of draft order w.r.t the proposed variation, (i.r.t. LTCG as it was only w.r.t. S. 69A only). In that view of the matter, there was no draft order as such was forwarded, clearly violating the mandate of law as held in several cases. 2. Supporting case laws: 2.1 In the case of SHL (India) (P) LTD. vs. Deputy Commissioner of Income Tax Ors. (2021) 321 CTR 655 (Bom) (DC 77-87), it was held: Following principles emerge from the discussion: (i) that the procedure prescribed under s. 144C is a mandatory procedure and not directory. (ii) failure to follow the procedure under s. 144C (1) would be a jurisdictional error and not merely procedural error or irregularity. (iii) therefore, s. 292B cannot save an order passed in breach of the provisions of s. 144C (1), the same being an incurable illegality. (Para 25) 3. Further, where the Show Cause Notice issued u/s 263 of the Act did not contain the issue which was final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order deserves to be quashed. Facts: The AO has dealt with this issue from page 5 onward. The issue involved was that the assessee this year sold a residential house for Rs 69,90,000/- on dated 28.07.2017. Based on this information alone, entire gross sale consideration, was considered to be the income escaping assessment u/s 147 and has been taxed even without allowing Indexed Cost of Acquisition, Indexed Cost of Improvement, deduction claimed u/s 54 etc. as a rule of thumb without application of mind. Hence, this ground. Submission: 1. By a bare look upon the impugned assessment order which is an ex-parte order, it is evidently clear that the ld. AO has not at all acted on the material available on the record nor he applied the provision of law binding upon him. Strangely, he assessed the entire gross receipts itself which is against all the canons of principle of natural justice and the specific law while computing LTCG. He even did not bother to comply with the mandatory statutory provision of S.45 r.w.s 48 of reducing the cost/the Indexed Cost of Acquisition (COA) which is Rs 15,22,982/-. In addition, the assessee went on incurring expenditure on the improvement of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shows a complete non-application of mind by the AO who merely proceeded with blind eyes, just to penalize the assessee since he was making an ex parte assessment. Repeated allegation of non-compliance does not entitle AO to penalize the assessee while making a best judgment assessment u/s 144 of the Act. He did not even consider the material available record and the mandate of the law binding upon him. Thus, the entire claim of NIL LTCG was duly and fully supported by the evidences and backed by the legal provisions. In absence of any contrary evidence brought on record or contrary decisions or judicial guidelines by the AO, the entire addition on account of LTCG of Rs 69.90 lakh deserves to be deleted. 3. Supporting Case laws: A. Divya Capital one (P) Ltd. vs. ACIT (2022) 326 CTR (Del) 781: Reassessment Notice under s. 148 Enquiry and order under s. 148A(d) Under the amended provisions, the term information in Expln. 1 to s. 148 cannot be lightly resorted to so as to reopen assessment Merely because the Revenue classifies a fact already on record as information may vest it with the power to issue a notice of reassessment under s. 148A(b) but would certainly not vest it with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 for the asst. yr. 2016-17 is set aside Hence, impugned order u/s 148 dated 30.03.2022 and resultant order u/s 148A(d) dated 30.03.2022 may be quashed. Alternatively, the entire impugned addition deserves to be deleted. Additional GOA-10: Invoking S.115BBE of the Act is without jurisdiction: Submission: 1. The AO imposed special tax u/s 115BBE with reference to the addition made of Rs.69.90 lac however, there is absolutely no case made out to invoke S.115BBE. Admittedly the related income is not income from other sources but by AO s own admission it was an income from LTCG as finally assessed by him hence, S.115BBE cannot be involved. Thus, once the AO himself did not dispute that it was income from LTCG and not from the income of other sources he could not have invoked S. 115BBE. At Pg. 6 of order the ld. AO noted as under: Considering the above, the sale consideration of the property is Rs. 69,90,000/-. Further, the indexation of cost of acquisition and improvement worth Rs. 54,50,455/- (1522982+3927473) as claimed by the assessee is disallowed due to reason that assessee has failed to submit any documentary evidence in support of his claim. Therefore, the whole consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e available to a taxpayer to arrive at a conclusion about determination of appropriate head of income. 2.3 It is further submitted that whatever, was assessed by AO was nothing but Income from Capital Gains only and it cannot be termed as excess/undisclosed/unaccounted Income for the simple reason that the ld. AO at pg.2 of order observed that the assessee has sold immovable property as per information with him for reassessment proceedings: On perusal of the submission made by the assessee and the information available on record, it is noted that the assessee, during the year under consideration sold immovable property of Rs. 69,90,000/-. Moreover, the assessee admittedly accounted for such sales in regularly maintained books of account and also furnished appropriate documentary evidences were furnished before lower authorities. Consequently, it cannot be said that there was some excess shortage/undisclosed/unaccounted income, etc. found by ld. AO. 3. Binding judicial guideline: The Hon'ble Rajasthan High Court as also Tribunals whose decision are binding upon the assessing officer as a juridical precedence have also been consistently holding so. Kindly refer: 3.1 The Hon ble R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble base for Revenue to bring to tax subsequent profit/loss on sale of such stock of rice in future. 2.11. Having said that, the next issue that arises for consideration is whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head business income or income from other sources . In the present case, the assessee is dealing in sale of foodgrains, rice and oil seeds, and the excess stock which has been found during the course of survey is stock of rice. Therefore, the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla (supra) supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head business income and not under the head income from other sources. In the result, ground No. 1 of the assessee is allowed. 3.2 The Hon ble ITAT Jaipur, Jaipur in its decision in the case of Shri Ram Narayan Birla in ITA No. 482/JP/2015 dated 30.09.2016 has held that unrecorded/excess investment or expenditure surrender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification No. 18/2022 dt. 29.03.2022 (PB-II 104) titled as E-Assessment of Income Escaping Assessment Scheme, 2022 issued by the Central Govt. in exercise of the power conferred by S.151A (1) (2) of the Act which has made the Re-Assessment in any case mandatory through the E-Assessment Scheme only but not otherwise. Clause 3 of the Scheme provides the scope which includes the Assessments/Re-Assessment u/s 147 as also the issuance of Notice u/s 148 of the Act, shall be through automated allocation only in accordance with Risk Management Strategy (herein after referred to as RMS ) formulated by the Central Board of Direct Taxes (herein after referred to as CBDT ) u/s 148 and in a faceless manner as provided u/s 144B of the Act. 2. For a ready reference clause 3 is being reproduced hereunder: For the purpose of the Scheme, (a) assessment, reassessment or recomputation under section 147 of the Act, (b) issuance of notice under section 148 of the Act. shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, both the proceedings i.e., the impugned proceedings under s. 148A, as well as the consequential notices under s. 148 were issued by the local jurisdictional officer and not in the prescribed faceless manner Order under s. 148A(d) and the notices under s. 148 are issued on 29th April, 2022, i.e., after the Faceless Jurisdiction of the IT Authorities Scheme, 2022 and the e-Assessment of Income Escaping Assessment Scheme, 2022 were introduced Impugned notices issued by local jurisdiction AO and the proceedings drawn by the Department is neither tenable, nor sustainable All the impugned orders getting quashed, the consequential orders passed by the Department pursuant to the notices issued under ss. 147 and 148 would also get quashed 3.3 Hexaware Technologies Limited vs ACIT Ors. (WP no.1778/2023) (Para 39). 39. With reference to the decision of the Hon ble Calcutta High Court in Triton Overseas Private Limited (Supra), the Hon ble Calcutta High Court has passed the order without considering the Scheme dated 29th March 2022 as the said Scheme is not referred to in the order. Therefore, the said judgment cannot be treated as a precedent or relied upon to decide the jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its order dated 28.22.2023 u/s 144C (5) of the Act is not an electronic communication but a manual order as is evident from the perusal of the same. Although there is a separate letter dt. 28.11.2023 (PB 87) intimating DIN no. being ITBA/DRP/M144C(5)/2023-24/1058282550(1) but the fact of issuing the present directions issued u/s 144(C)(5), manually without a DIN and without obtaining an approval from prescribed authority in the prescribed format, (as was not mentioned/quoted in the body of the said communication) is non-est. Similar contention when raised by the revenue, was rejected. 2. Supporting case laws where no DIN is mentioned: 2.1 Recently in the case of Practo Technologies Pvt. Ltd. Vs DCIT IT(TP)A No.154/Bang/2022 (DC 108-124), the Hon ble Bangalore Bench, in the context of the directions issued u/s 144C (5), when noticed that no DIN was mentioned therein, held as under: 21. Respectfully following the above order of the Tribunal, since the DIN was not mentioned in DRP order dated 30.12.2021 which was mandatory as per CBDT Circular No.19 (supra) in view of the facts noted above in regard to communications done with the assessee, we hold that the DRP directions dated 30.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned notice dated 27th August 2022 issued under Section 148 of the Act is invalid and bad in law as the same has been issued without a DIN. 2.3 In the case of Ashok Commercial Enterprises v. ACIT [2023] 154 taxmann.com 144 (Bombay) (DC 125-150), a satisfaction note also has been held as a communication requiring DIN to be mentioned thereon. It was held: (d) The said Circular also applies to the satisfaction note dated 13th July 2021 issued by respondent no. 1. The satisfaction note will fall within the scope of paragraph 2 of the Circular as a communication of the specified type issued to any person. In the case of the satisfaction note no regularization dated 13th October 2021 has been issued . 2.4 Various other decisions are in the case of Bangalore Narayan Das vs. ITO (International Taxation) (2023) 226 TTJ (Bang) 66, PCIT (EXEMPTION) vs. Tata Medical Centre Trust (2023) 334 CTR (Cal) 942, Ankit Jain v. DCIT (2023) 155 taxmann.com 321 (Delhi - Trib.) and Deepak Kumar vs DCIT (2024) 159 taxmann.com 358 (Delhi - Trib.) 3. CBDT Instructions are binding: Supporting Case Laws: The CBDT circular and instructions have been held to be binding on the Income-Tax Authorities for which a use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims and fancies burden the citizens without authority of law. (d) In the matter of interpretation of charging section of a taxation statute, strict Rule of interpretation is mandatory and if there are two views possible in the matter of interpretation of a charging section, the one favorable to the assessee need to be applied. Since, the impugned assessment order has been passed without there being any valid directions issued by the DRP-1, New Delhi (in absence of DIN as aforesaid), has vitiated the impugned order itself as per mandate of Sec.144C (5) r.w.s 143(3) hence, both these orders may kindly be held as non-est and quashed. 6. In support of the contentions so raised in the written submission reliance was placed on the following evidence / records: Paper Book Index S. N. Particulars Pg. No. 1. Copy of form 35A 1-2 2. Copies of detailed objections raised dt. 27.04.2023 against the draft assessment order u/s 144C(1) 3-12 3. Copy of application for admission of Additional Documents/ Evidences dt. 27.04.2023 13-14 4. Index of the papers filed before the D.R.P. 15 5. Index of Additional documents filed before the D.R.P. 16 6. Copy of Passport 17-20 7. Copy of letter dated 23.03.23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Bom) 77-87 10. Sanath Kumar Murali vs. ITO Ors. (2023) 333 CTR (Kar) 189 88-94 11. Copy of order u/s 119 of the Act dt. 13.08.2020 95-96 12. Kankanala Ravindra Reddy Ors. vs. ITO Ors. (2023) 334 CTR (Telangana) 646 97-107 13. Practo Technologies Pvt. Ltd vs DCIT Central Circle 1(3), Bangalore IT(TP)A No.154/Bang/2022 (Relevant Extracts) 108-124 14. Ashok Commercial Enterprise vs. ACIT (2023) 334 CTR 757 (Bom) 125-150 7. The ld. AR of the assessee submitted that his prayer to consider the addition ground raised be considered based on the decision of the apex court in the case of National Thermal Power Corporation Ltd. [229 ITR 383 (SC)] as that grounds are purely being technical and no finding on facts is required to be made and therefore, he prayed to consider. 8. Considering the nature of grounds raised by the assessee being technical in nature the same are admitted. 9. The ld. AR of the assessee in support of ground no. 1 2 raised by the assessee submitted that the impugned order u/s 148(d), notice under section 148 both dated 30.03.2022 and notices u/s 142 for AY 2018-19, are completely devoid of jurisdiction in as much as the Income Tax officer, Ward 2(2), Ajmer was not vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer holding the charge was the International Taxation Charge. In this background only, when the assessee, after receiving the impugned notice u/s 148 sent on dt. 13.04.2022, raised his objections vide letter dated 23.07.2023 (PB 70-72) no reply came from the ITO Ward 2(2) Ajmer but strangely the same was replied by Officer, Circle (Intl Tax), Jaipur admitting, the very fact and the contention of the assessee that she might be holding the correct jurisdiction over this assessee but not the ITO Ward 2(2) Ajmer who issued the impugned notice u/s 148. To drive home to this contention the ld. AR of the assessee relied upon the decision of CIT Vs Smt Anjali Dua (2008) 219 CTR 183 (Del) (DC 1-2), Mir Zardari Qureshi v. ACIT [2023] 151 taxmann.com 408 (Raipur - Trib.) (DC 3-13), Abdul Azeez Haroon vs DCIT (International Taxation) (2020) 317 CTR 610 (Mad) (DC 14-17) and Saroj Sangwan vs. ITO (2024) 162 Taxmann.com 704 (ITAT, Delhi) (DC 18-22). The ld. AR of the assessee argued that where the authority issuing the notice has no authority at all, there is no requirement of raising any objection within the stipulated period. Moreover, objection u/s 124 is required to be rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of case laws relied upon. 10. The ld. DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. AO and DRP. The ld. DR stated that the assessee has taken under the sun all the grounds of approval of PCIT/CCIT, jurisdiction, addition to be made u/s. 69A or capital gain, DIN attached or not, how the proceedings were conducted etc., thus, on these aspect he sought time to seek the comments of the ld. AO. The ld. AO submitted his report vide letter dated 24.05.2024 and the contention of the ld. AO on the submission of the assessee is reproduced here in below: Sub.: Reports/comments in the case of Sh. Sunil Chablani (PAN: ASTPC0800H) for the A.Y. 2018-19-regarding. Ref.: Letter No. 119 dated 06.05.2024 and No. 143 dated 14.05.2024 Kindly refer to the above. 2. The brief facts of this case are that the assessee was non-filer for the A.Y. 2018-19. There was information available with the department that the assessee had sold an immovable property for a sale consideration of Rs. 69,90,000/-. Since, the assessee was non-filer during the year under consideration, the said transaction remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid transaction. However, after allowing opportunity to explain and furnish the requisite documents, the assessee has failed to comply with the same. He did not file any response in this regard. Accordingly, on the basis of material available on record and after exploring the information flagged on the system, this case was treated as fit case to issue notice u/s 148 of the Act. Order u/s 148A(d) of the Act was issued on 25.03.2022 after obtaining approval from the specified authority as mentioned in section 151 of the Act. Subsequently, notice u/s 148 of the Act was issued on 30.03.2022 with prior approval of the PCIT, Udaipur. The jurisdiction of this case was transferred to the DCIT, Circle (Intl. Tax.), Jaipur charge when it came to notice to the AO that the assessee is having NRI status. This fact was disclosed when the assessee has filed his written submission during the assessment proceedings. It is the duty of assessee itself to disclose his correct facts pertaining to the transactions in question even his residential status also. During the assessment proceedings, the assessee was having opportunity to challenge jurisdiction within time limit. However, he failed to do so. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WE or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier, (c) where an action has been taken under section 132 or section 1324, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 1530 or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once a notice u/s 148 is generated on ITBA system and digitally signed, it is instantly entered and transmitted in the ITBA system. Also, the notice is instantly transmitted to the e-filing portal of the assessee under e- Proceedings. Further, real date and time are also mentioned on the bottom right corner of the notice which clearly shows that this notice was digitally signed by the issuing authority on Wednesday, 30 March, 2022 at 4:55 PM. In this context, reliance is placed upon the decision of Hon'ble Allahabad High Court in Writ Tax No. 78 of 2022 which is squarely applicable in this case. The relevant paragraph of the judgement is as under- *29, Thus, considering the provisions of Section 282 and 282A of the Act 1961 and the provisions of Section 13 of the Act 2000 and meaning of the word Issue we find that firstly notice shall be signed by the assessing authonty and then it has to be issued either in paper form or to be communicated in electronic form by delivering or transmitting the copy thereof to the person therein named by modes provided in section 282 which includes transmitting in the form of electronic record. Section 13(1) of the Act, 2000 provides that unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee from sell of immovable property was treated as unexplained money u/s 69A in the hands of the assessee. This fact has been duly incorporated in the draft assessment order. The Hon'ble DRP vide its order dated 28.11.2023 has issued necessary directions to the AO to pass a reasoned order on the basis of submission of the assessee which was enclosed as an Annexure- A to this order. The said Annexure A is a computation of income filed by the assessee before Hon'ble DRP. This computation consists only details of sale value, indexed cost of improvement and capital gain and no such supporting documents were furnished therewith. This is the only document which was filed by the assessee in support to his claim. As per the directions issued by Hon'ble DRP as well as considering the evidences furnished by the assessee, final assessment order was passed on 29.12.2023 making addition of Rs. 69,90,000/- on account of Long-Term Capital Gain. Your good self will find that the AO while passing final assessment order has duly incorporated all the facts available on record and discussed each issue in detail. During the assessment proceedings, the assessee failed to substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same deserves to be quashed. On perusal of the said objection, it emerged that the assessee has itself asserted that notice u/s 148 dated 30.03.2022 was issued prior to issue of the said notification dated 29.03.2023. As such, question of violation of this binding notification does not arise. Accordingly, this contention deserves to be dismissed. The ld. DR relying the contentions of the ld. AO submitted that since the transaction was flagged in the system and it was fit case to issue the notice u/s. 148 the same was issued and that objection were dealt with as the assessee has not filed his ITR. The assessee never filed the ITR even after the issue of notice u/s. 148. As in this case the notice is within 3 year and the same was issue within three years the approval taken was in accordance with the law as the notice was issued on 31.03.2022. The assessment was re-opened on the valid information and the case of the assessee being of the non-filler case the notice was issued by the ITO, Ajmer. The assessee not remained compliant with the notices of the ld. AO as well as of the ld. DRP. The assessee has not supported the contention with valid explanations and proof the indexation ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the two ministries /departments, which is beyond the control of the assessee. Pertinently, the very starting point and the very base of the present impugned proceeding u/s 148A are the registered sale deed dated 28.07.2017 (PB 26-39) showing the sale consideration of Rs. 69.90 lakh, referring to which only, allegation of non- disclosing of LTCG is made by the AO. Interestingly, in the first few lines of above sale deed only at internal page 1 (PB 30), it is stated that the appellant (the seller) was residing at Dubai, UAE during that relevant point of time. Thus, it was very well known to the Department that the appellant had been residing at Dubai, therefore, the correct jurisdiction rested with the international taxation. 1.2 (Reply Para 1) Further on the aspect of S. 124(3), the Id. DR completely failed to controvert the submissions and the case laws cited in our revised WS dated 27.05.2024, which are once again relied upon. 2. (Reply Para 2) With regard to the contention of the issuance of the impugned notice u/s 148 after 01.04.2022 and hence the same was barred by limitation, it is solely an internal affair of the department as to when the notice digitally signed on 30.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply are of no substance, either on legal side or on facts and therefore, the appeal of the SAC, appellant deserves to be allowed on all counts. The above submissions have been made based on the instructions and the information provided of/by the client. The ld. AR of the assessee submitted that ITO, Ajmer has accepted the fact that the assessee is NRI and therefore, he himself transferred the case record. In support the ld. AR of the assessee relied upon the PAN profile filed and copy of order sheet entries filed by the ld. DR. As regards the issue and service of notice the same is not correct. Notice was emailed on 13.04.2022. So the notice issued is beyond three years time and the approval of the CCIT is also not obtained. 12. We have heard the rival contentions and perused the material placed on record. In this appeal the assessee has taken almost in all 11 grounds of appeal challenging the finding of the lower authority on facts as well as on legal grounds. In ground no. 1 2 the assessee has challenged the validity of issue of notice and connected approval together with the jurisdiction of the ld. AO who issued the notice to the assessee. Since this ground no. 1 2 goes into t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiate the reassessment proceedings u/s 148 of the Act fulfils appropriately. The ld. AO as regards the service of notice relied upon the decision of Hon ble Allahabad High Court. 12.2 The assessee in the paper book filed submitted copy of pass port which was valid from 16.03.2015 to 13.03.2025 and place of issue is Dubai (APB-18), at page 20 the details of old passport and place of issue shows Dubai. At page 17 of the paper book the jurisdictional details of the assessee is filed it shows the Circle (Intl.Tax), Jaipur. Thus, the ld. AO while sending this report based on the submission has not controverted this aspect of the matter which establishes that the residential status of the assessee is undisputedly NRI as on the date of issue of notice u/s. 148 of the Act. Thus, based on this evidence placed on record and the same being not controverted we are of the considered view that when the assessee is non-resident as on the date of issue of notice u/s. 148 of the Act. The bench further noted from order sheet entry dated 16.03.2023 that Faceless Assessment Unit (FAU) requested through NaFAC to transfer out this case from them because the case is of non-resident individual or of a fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
