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TMI Blog2025 (3) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Manjunatha G, Accountant Member For the Assessee : CA P Murali Mohan Rao For the Revenue : Shri B. Bala Krishna, CIT-DR ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the Assessee against the final assessment order of the learned ITO- (Intl.Taxn.)-2, Hyderabad, dated 02.03.2024, pursuant to the directions of Disputes Resolution Panel-1 [in short "DRP"], Bengaluru, directions dated 29.02.2024, passed u/sec.144C(5) of the Income Tax Act, 1961 [in short "the Act"], relating to the assessment year 2017-2018. 2. At the very outset, there is a delay of 134 days in filing the appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for condonation of delay. We are satisfied with the reasons furnished by the assessee for the delay in filing the appeal. We, therefore, condone the delay of 134 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits as under. 3. Facts of the case, in brief, are that the assessee is a Non-Resident Indian and working as Sr. Foreman (Civil Contracts) in Facilities Management Department with M/s. Qatar Energy and filed letter dated 25.08.2022 from his employer. A search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the same provisions (Sections 147-151), including a new provision Section 148A prescribing the procedure for reopening and reassessment proceedings. In pursuance to the Judgment of the Hon'ble Supreme Court the CBDT vide it's instruction No.1/2022 dated 11.05.2022, directed the Assessing Officers to pass on the benefit of new law shall be made available even in respect of proceedings relating to past assessment years. Therefore, by following the due procedure, the Assessing Officer issued notice u/sec.148 of the Act dated 30.07.2022. 3.2. In response to the said notice, the assessee filed return of income on 03.09.2022 declaring income at Rs. 225/- for the impugned assessment year 2017-18. Thereafter, the Assessing Officer issued statutory notices u/sec.142(1) and 143(2) of the Act asking the assessee to furnish his reply with respect to purchase of the property and his residential status. In response to the said notices, the assessee had submitted copy of sale deed dated 15.06.2019 for a consideration of Rs. 70 lakhs duly mentioning his Axis Bank A/c.xxxxx3124, but, not filed the bank statement. And to prove his Non-Resident status, the assessee has furnished his passport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of search and in that an amount of Rs. 70 lakhs was paid in cheque and Rs. 55,75,000/- was paid in cash. In absence of proofs/evidences such as withdrawals from the bank towards the aforesaid sum of Rs. 55,75,000/- paid to the Vendor viz., M/s. Skill Promoters Pvt. Ltd., the Assessing Officer treated the same as unexplained investment u/sec.69A of the Act and added back the same to the returned income of the assessee. The Assessing Officer also added a sum of Rs. 53,200/- towards long term capital gains on sale of shares. Accordingly, the Assessing Officer determined the total income of the assessee at Rs. 79,37,887/- as against the returned income at Rs. 225/- vide draft assessment order dated 19.05.2023 passed u/sec.147 r.w.s.144C(13) of the Income Tax Act, 1961. 3.4. On being aggrieved by the draft assessment order dated 19.05.2023, the assessee filed his objections before the DRP. 3.5. The learned DRP noted that the notice issued by the Assessing Officer under old tax regime u/sec.148A(b) dated 23.04.2021 is deemed to be the show cause notice and the subsequent sec.148 notice dated 30.07.2022 is in accordance with law and the jurisdiction of the Assessing Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval as per provisions of sec.151 of the Act was obtained from PCIT and as per the amended provisions of sec.151(ii) of the Act the Specified/Competent Authority is "Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year." However, in the instant case the Assessing Officer issued initial notice u/sec.148 on 23.04.2021 and later on again issued notice on 30.07.2022 i.e., more than 3 years from the end of the impugned assessment year involved in the present appeal i.e., 2017- 2018 with the prior approval of Pr. CIT-1, Hyderabad dated 27.07.2022. Thereby, it was the submission of the Learned Counsel for the Assessee that approval of Specified Authority u/sec.151(ii) of the Act is not obtained at the time of issue of notice u/sec.148 which is mandatory as per the law existing on that prevailing day. He accordingly submitted that since the root of initiation of proceedings u/sec.148 is invalid as there is no prior approval from the specified authority u/sec.151(ii) of the Act. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in India and the amount invested is from out of the amounts received from the assessee's own earnings outside India and not from the income accrued or arisen in India. Therefore, the Assessing Officer cannot invoke the provisions of sec.69A of the Act and make the impugned addition in the hands of the assessee. He submitted that the Assessing Officer ought to have appreciated the DTAA entered between India and Qatar as the assessee has already paid the tax on income earned in Qatar and taxing the same income again in India would lead to double taxation which is injustice to the assessee and bad in law. In support of this contention, the Learned Counsel for the Assessee relied upon the decision of ITAT, Mumbai Bench in the case of ITO, Mumbai vs. Rajeev Suresh Ghai [2021] 132 taxmann.com 234 (Mumbai-Trib.); DCIT vs. Madhusudan Rao [2015] 57 taxmann.com 262; Iqbal Ismail Virani vs. ITO [2021] 128 taxmann.com 181 and DCIT vs. Hemant Manukhal Pandya [2018] 100 taxmann.com 280. He submitted that the impugned addition of Rs. 55,75,000/- was made by the Assessing Officer on the basis of loose sheets which are un-authenticated, unsigned and unreliable material and they are 'dumb' docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low. He submitted that admittedly the assessee has not furnished bank statements or documentary evidences to substantiate his claim and in absence of such evidences, the impugned additions made by the Assessing Officer, confirmed by the DRP and the final assessment order passed by the Assessing Officer pursuant to DRP directions is in accordance with law and as per the provisions of the Income Tax Act, 1961 whether in case of issuance of notice u/sec.148 or invoking the provisions of sec.69A of the Act towards unexplained investments. He accordingly pleaded that the final assessment order passed by the Assessing Officer be confirmed in the interest of justice. 7. We have heard the rival submissions of both the parties and perused the material available on record. There is no dispute between the parties that the assessee is a Non- Resident Indian. Admittedly, in the instant case, the assessment has been reopened u/sec.147 of the Act by issuance of notice u/sec.148 of the Act dated 23.04.2021 and by virtue of the order of Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in 2022- SC-Online-SC-543, re-assessment notice issued has been treated as notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and Other Laws Amendment Act, 2021 [in short "TOLA"] and after considering relevant facts held that after 01.04.2021, the New Regime has specified different authorities for granting sanction u/sec.151(ii) of the Act and in case the assessment is reopened after three years from the end of the relevant assessment year, then the Specified Authority to grant sanction is the Principal Chief Commissioner of Income Tax or Principal Director General of Income Tax. In the present case, there is no dispute with regard to the fact that the Assessing Officer issued notice u/sec.148 of the Act dated 30.07.2022 with the prior approval of Principal Commissioner of Income Tax-1, Hyderabad accorded on 27.07.2022 vide Ref.F.No.Pr.CIT-1/Hyd/147/2022-23. Therefore, in our considered view, notice issued by the Assessing Officer u/sec.148 of the Act dated 30.07.2022 with the approval of Principal Commissioner of Income Tax- 1, Hyderabad dated 27.07.2022 is not in accordance with the provisions of sec.151(ii) of the Act and consequently, the re-assessment order passed by the Assessing Officer u/sec.147 r.w.s.144C(13) of the Act is illegal, void ab initio and liable to be quashed. 7.2. The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral. Therefore, respectfully following the aforesaid decision of the Hon'ble Jurisdictional High Court we find no merits in the reliance placed by the Revenue on the provisions of TOLA. As, in the present case, the period of three years has elapsed from the end of the relevant assessment year and the order dated 23/05/2022 was passed under section 148A(d) of the Act after obtaining the approval of the Principal CIT-1, Mumbai vide letter dated 15/07/2022, we are of the considered view that the Revenue has not followed the mandatory provisions of the Act while initiating the reassessment proceedings and sanction of the Specified Authority is not in conformity with the law prevalent at the time of grant of sanction." 7.4. In this view of the matter and by respectfully following the decision of Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra) and also the decisions of ITAT, Mumbai Benches, Mumbai in the cases of ACIT vs. Manish Financial and Manish Jagdish Joshi vs. CIT (supra), we are of the considered view that the notice issued by the Assessing Officer u/sec.148 of the Act dated 30.07.2022 by obtaining prior approval from the Principal Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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