Assessee cannot challenge section 148 notice without DIN after participating in assessment proceedings under section 292BB

ITAT Raipur rejected the assessee's challenge to a notice issued under section 148 without DIN, noting that despite Delhi HC's favorable ruling in Brandix case, SC has granted interim stay maintaining status quo. The tribunal held that since the assessee participated in assessment proceedings without objecting to notice service, section 292BB precluded raising such objections later. Regarding cash deposits claimed from agricultural land sale, ITAT upheld addition as assessee failed to substantiate source, relying on registered deed over unregistered agreement. Penalty under section 271(1)(c) was sustained as assessee couldn't prove bonafide nature of deposits.

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Issues Involved:
1. Validity of proceedings initiated under Sections 147, 148, 149, and 151 of the Income-tax Act, 1961.
2. Service of notice under Section 148 of the Income-tax Act, 1961.
3. Addition of Rs. 6,62,000/- as undisclosed income.
4. Imposition of penalty under Section 271(1)(c) of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Validity of Proceedings Initiated under Sections 147, 148, 149, and 151 of the Income-tax Act, 1961:
The assessee challenged the initiation of proceedings under Sections 147, 148, 149, and 151 on the grounds that the notice issued under Section 148 did not bear a Document Identification Number (DIN) as required by CBDT Instruction No. 19 of 2019. The Tribunal, however, did not find merit in this argument, noting that the issue concerning communication of assessment orders without mentioning DIN was sub-judice before the Hon'ble Supreme Court. Hence, the contention that the notice under Section 148 was invalid due to the absence of DIN was rejected.

2. Service of Notice under Section 148 of the Income-tax Act, 1961:
The assessee argued that the notice under Section 148 was not properly served, as it was sent to an incorrect email address and there was no evidence of physical service. The Tribunal observed that the assessee had participated in the assessment proceedings and had not raised any objection regarding the service of notice during those proceedings. Citing Section 292BB of the Act, which precludes an assessee from raising objections on the service of notice if they have participated in the proceedings, the Tribunal dismissed this ground of appeal.

3. Addition of Rs. 6,62,000/- as Undisclosed Income:
The assessee claimed that the cash deposits of Rs. 17,92,000/- in his bank account were sourced from the sale of agricultural land. The Tribunal noted that the sale consideration as per the registered sale deed was Rs. 11.30 lacs, whereas the assessee claimed the actual sale consideration was Rs. 27.90 lacs based on an unregistered "agreement to sell." The Tribunal rejected this claim, emphasizing that the sale consideration mentioned in the registered sale deed could not be dislodged by an unregistered document. Consequently, the Tribunal upheld the addition of Rs. 6,62,000/- as undisclosed income.

4. Imposition of Penalty under Section 271(1)(c) of the Income-tax Act, 1961:
The CIT(Appeals) had sustained a penalty of Rs. 75,000/- under Section 271(1)(c) for concealment of income. The Tribunal concurred with the CIT(Appeals), noting that the assessee failed to substantiate the source of the cash deposits and did not disclose all material facts. The Tribunal referenced Explanation 1 to Section 271(1)(c), which creates a presumption of concealment if the assessee fails to offer a bona fide explanation. The Tribunal upheld the penalty, finding no infirmity in the CIT(Appeals)' decision.

Conclusion:
Both appeals filed by the assessee were dismissed. The Tribunal upheld the validity of the proceedings initiated under Sections 147 and 148, confirmed the addition of Rs. 6,62,000/- as undisclosed income, and sustained the penalty of Rs. 75,000/- under Section 271(1)(c). The order was pronounced in open court on 25th July 2024.

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