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TMI Blog2024 (9) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and had issued notice and further proceeded to make addition on a fresh ground after duly considering the assessee s submission. As evident that the assessee s case would squarely be covered by the said decision where the Hon'ble High Court has held that in such situation there is no necessity to remand the matter back to the ld. AO by holding that the said order is illegal and wholly unsustainable. AR has also placed reliance on the decision of Akshar Builders Developers [ 2019 (1) TMI 1277 - BOMBAY HIGH COURT ] wherein it was held that the ld. A.O. cannot reopen the assessment mechanically based on erroneous information received by him. Further, it was held that there was complete non application of mind on the part of the ld. A.O. This proposition was further supported by the decision of the Hon'ble Jurisdictional High Court in the case of Paranjape Schemes (Construction) Ltd. [ 2024 (3) TMI 736 - BOMBAY HIGH COURT ] As evident that the action of the ld. A.O. in reassessing a case on erroneous facts and on non application of mind has been reprimanded by various decisions of the Hon ble High Courts and Hon'ble Apex Court. This fallacy which occurred while reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non compliant throughout the assessment proceeding. The assessee filed his objection to the proposed variation before the Hon ble Dispute Resolution Panel ( Hon ble DRP for short) and the Hon ble DRP vide order dated 29.12.2023 issued directions u/s. 144C(5) of the Act, rejecting the original draft assessment passed by the ld. A.O. for the reason that the ld. A.O. has reopened the assessee s case based on erroneous facts and premise which does not relate to the assessee. Pursuant to the direction of the Hon ble DRP the ld. A.O. passed the final assessment order dated 25.01.2024, determining the total income at Rs. 1,03,29,160/-, after making an addition of Rs. 99,99,911/- as unexplained investment u/s. 69A of the Act. 5. Aggrieved by the final assessment order, the assessee is in appeal before us, challenging the impugned assessment order. 6. The learned Authorised Representative (ld. AR for short) for the assessee contended that the Hon ble DRP in its order has rightly mentioned that the reasons for reopening the assessee s case is based on erroneous facts which does not pertain to the assessee. The ld. AR further stated that the assessee has been denying the same throughout the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed stock exchange NSE 1 Value of taxable securities transactions (Code 02) 123710 STT-01 Purchase of equity shares in a recognized stock exchange NSE 1 Value of taxable securities transactions (Code 01) 3065843 AIR-006 Purchased immovable property valued at Rs. 3000000 or more Jt. Sub Registrar Kurla 1 1 11000000 Total 14203453 9. The assessee vide his submission has stated that the assessee has not entered into any of the transaction mentioned above by the ld. A.O. This fact was also admitted by the Hon ble DRP in its order after duly considering the contention of the assessee, but has proposed to make addition on a completely different ground, i.e., on the source of time deposit with Federal Bank, amounting to Rs. 99,99,911/- which the assessee claims it to be remittance from his own bank account held in Omen and from the closure proceeds of the existing FDs in Federal Bank. The assessee has also substantiated the said transaction by sufficient documentary evidences though the assessee was unable to file the same before the lower authorities. The assessee contended that the said transaction is not liable to be taxed in India and had duly explained the same during the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate due to error of human nature, technical nature etc. Therefore, the department was advised to effect due verification and opportunity of being heard given to the tax payers before initiating proceedings under section 148/147 of the Act. Thus, in the preceding paragraph we have pointed out the factual position in the case on hand and it appears that proper verification was not done on the information which was available with the assessing officer at the time of issuance of notice under section 148A(b) of the Act which has led to an erroneous order dated 7th April, 2022 being passed. 7. In Divya Capital One (P.) Ltd. v. Asstt. CIT [2022] 139 taxmann.com 461/445 ITR 436 (Delhi), the Court had considered the new re-assessment claim and held as follows: 7. This Court is of the view that the new re-assessment scheme (vide amended sections 147 to 151 of the Act) was introduced by the Finance Act, 2021 with the intent of reducing litigation and to promote ease of doing business. In fact, the legislature brought in safeguards in the amended re-assessment scheme in accordance with the judgment of the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO [2002] 125 Taxman 963/[2003] 259 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remand the matter back to the ld. A.O. by holding that the said order is illegal and wholly unsustainable. The ld. AR has also placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Akshar Builders Developers vs. Asst. CIT [2019] 411 ITR 602 (Bom), wherein it was held that the ld. A.O. cannot reopen the assessment mechanically based on erroneous information received by him. Further, it was held that there was complete non application of mind on the part of the ld. A.O. This proposition was further supported by the decision of the Hon'ble Jurisdictional High Court in the case of Paranjape Schemes (Construction) Ltd. vs. DCIT [2024] 160 taxmann.com 730 (Bom). 12. From the above observation, it is evident that the action of the ld. A.O. in reassessing a case on erroneous facts and on non application of mind has been reprimanded by various decisions of the Hon ble High Courts and Hon'ble Apex Court. This fallacy which occurred while reopening the assessment in the present case cannot be rectified by the subsequent action of the Hon ble DRP in rejecting the draft assessment order and in proposing a fresh addition. For the foregoing reasons, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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