TaxTMI 
TaxTMI 
2024 (6) TMI 269
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....the Act and the sanction accorded u/s 151 of the Act, which, thus the notice issued is itself invalid and is without jurisdiction. 4. The Ld. A.O. ought to have obtained the prior approval of the competent authority before issuing notice u/s 148 as laid down under the provisions of section 151 of the IT Act, 1961. 5. The Ld. A.O. erred in reopening the assessment under section 147 of the Act and issuing notice under section 148 of the Act, without having reasonable satisfaction or bonafide belief on his part to show that the assessee's actual income has escaped assessment. 6. The Ld. A.O erred in reopening the assessment u/s 147 of the Act and issuing notice u/s 148 of the Act on the basis of a borrowed satisfaction which is incorrect and unjustified. 7. The Ld. A.O erred in not applying his independent mind and has not made any proper inquiry and reopened the assessment u/s 147 of the Act which is incorrect and against the principles of natural justice. 8. The Ld. A.O made an addition of Rs. 22,00,000/- as unexplained Investment u/s 69 without appreciating the facts of the case which is incorrect and bad in law. 9. The Ld. A.O erred in making a huge addition of Rs.....
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....2. The Assessing officer erred in initiating penalty proceedings u/s 274 rws 271AAC(1) of the Income Tax Act. 23. The assessee may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the Grounds of objections at any time before or at the time of hearing of the objection." 3. Facts of the case, in brief, are that the assessee Shri Syed Gulam Mohiuddeein is a non-resident, did not file his return of income for the A.Y 2017-18. The assessee is residing in Saudi Arabia for the financial year 2016-17 relevant to A.Y 2017-18 under reference and earned income from outside India. The assessment has been reopened u/s 147 of the Income Tax Act, 1961 for the reasons stated as per which, the income chargeable to tax had been escaped assessment on account of non-disclosure of consideration paid for purchase of property. As per the reasons recorded by the Assessing Officer, a search and seizure operation u/s 132 of the I.T. Act was conducted in the case of M/s. Skill Promoters (P) Ltd on 22.10.2019. During the course of search, certain data in the form of excel sheet with respect of sale of commercial space in the venture "Sarath City Capital Mall" Kondapur w....
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....nvoked the decision of the Hon'ble Supreme Court in the case of NTPC Ltd vs. CIT (1998) 229 ITR 383, and submitted that the additional ground of the appeal filed by the assessee may be admitted. 6. The learned Counsel for the assessee referring to the additional ground of appeal filed by the assessee submitted that in the present case, notice u/s 148 of the Act was issued on 30.03.2021. As per the provisions of section 153(2) of the Act, the assessment order should be passed on or before one year from the end of the relevant A.Y i.e. on or before 31.3.2022. However, the Assessing Officer has passed the final assessment order u/s 144 r.w.s. 144C(13) on 12.02.2023 which is beyond the time limit prescribed under the Act and thus, 555 barred by limitation. In this regard, he relied upon the decision of the ITAT in the case of Shri Farooq Ali vs. Income Tax Officer in ITA No.104/Hyd/2023. 7. The learned DR, on the other hand, supporting the order of the DRP submitted that the assessee being a non-resident is subject to proceedings u/s 144C of the Income Tax Act, 1961. As per section 144C of the Act, the time limit for completion of the assessment in a case of non-resident shall ex....
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....ll 5 pm tomorrow i.e. 17thMay, 2024, to file written submissions and it was informed that the case is heard without even going on merit. The written submissions of CIT (DR) are as under: ON TIME LIMITS OF PASSING DRAFT AND FINAL ASSESSMENT ORDERS: i. The department submits that provisions of Sec. 153 determine the time limit of the draft order. ii The department submits that in the below mentioned cases, it has been held that draft order must be passed within the time limit of Section 153. Tally India Pvt. Ltd. 435 ITR 137 (Kar.) Lionbridge Technologies 260 Taxman 273 (Bom.) iii) The department respectfully submits that, it is fact that, the assessee preferred an appeal before the Hon'ble DRP against the additions made by the AO. iv. The department prays to draw attention of the Hon'ble Bench to the provisions contained in Section 144C(13) of the I.T.Act .The usage of the phrase "notwithstanding anything contrary contained in Section 153 or Section 153B" conveys that the general time limits provided u/s. 153 are not applicable for those assesses who have opted to proceed with the DRP route. v. The department submits that the entire Section 144C is a self-con....
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....on against the assessment order before the AO. After, receipt of acceptance or objections against, the Assessing Officer has one month time from the end of the receipt of the communication from the assessee to pass final order. It is emphasized that this time limit has overriding effect over the time limits mentioned in the section 153 and 153B as is clear from the plain reading of the provisions mentioned above. vii) However, as the Assessee did not accept the draft Assessment and chose to raise objection before the Ld DRP Bengaluru, the time limit for passing final order by the Assessing Officer was to be governed by the provisions u/s 144C(12) &% 144C(13): Sec. 144C(12) "No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. Sec. 144C(13) "Upon receipt of the directions issued under subsection (5), the Assessing officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 (or section 153B), the assessment without providing any further opportunity of being heard to the assessee, within one month from the....
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....ed that before the Hon'ble Tribunal, not to entertain this issue. In view of the above submissions, the Hon'ble Bench is requested to provide opportunity to the Department to argue the case on merit." 8. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. The assessee is a non-resident individual for the A.Y 2017- 18 and is an eligible assessee as per section 144C(15) of the I.T. Act, 1961. As per section 144C of the Act, the assessment of an eligible assessee shall be dealt with in accordance with the said provision. As per the provision of section 144C, in case of an eligible assessee, the Assessing Officer shall pass a draft assessment order and served on the assessee, if he propose to make any variation in his total income. The assessee, after receipt of draft assessment order shall have two options. As per sub section (2) of section 144C, on receipt of draft assessment order, the eligible assessee shall within 30 days file its acceptance of the variations to the Assessing Officer or file his objection, if any, to such variation with the DRP. If the eligible assessee file his acceptance to the....
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.... we go by date of notice issued u/s 148 of the Act i.e. 30.03.2021, the time limit for completing the assessment u/s 147 was available up to 31/03/2022 and thus, the final assessment order passed by the Assessing Officer u/s 144 r.w.s. 144C dated 12.01.2023 is clearly barred by limitation. 10. This proposition is covered by the decision of the Hyderabad Bench of the Tribunal in the case of Shri Farooq Ali vs. Income Tax Officer in ITA No.104/Hyd/2023 order dated 10/04/2024. The relevant findings of the Tribunal are as under: "23. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned DRP and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs. 2,55,75,000/- u/s 69 of the I.T. Act on the ground that as per the sale deed, the assessee had paid total sale consideration of Rs. 2,55,75,000/-on 5.10.2016 to the vendors by way of cash, that the vendors have admitted and acknowledged the same and the assessee could not explain the source of such payment made for purchase of the immovable property. While doing so, ....