TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1540
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..... National Faceless Appeal Centre (NFAC) has erred in reopening the assessment by issuing the reopening notice u/s 148 of the act on 11.03.2023 is invalid since issued after 3 years from the end of AY 2016-17 and where the income escaping assessment is less than Rs. 50 lakhs. Therefore, the reassessment initiated in the present case deserves to be quashed. 3) On facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre (NFAC) has erred in reopening the assessment u/s.147 of the Act vide notice u/s 148 dt 11/03/2023 which is issued by the Jurisdictional A.O instead of the National Faceless Assessment Centre. Therefore, reopening Notice u/s 148 of the act issued is bad in law. 4) On facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre (NFAC) has erred in reopening the assessment without taking the approval u/s 151 of the act of higher authority. Therefore, the reopening is bad in law. 5) On facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre (NFAC) has erred in reopening the assessment merely on the basis of information received without considering the fact that there was no tan....
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....here the Jurisdictional Assessing Officer (JAO) was brought to the knowledge, the financial transactions of the assessee, where she had purchased an immovable property for a consideration of Rs. 57,69,950/- falling under the category of Non-Filing of the Returns (NMS). The ld. AO issued show cause notice u/s. 148A(b) of the Act, dated 06.02.2023, seeking explanation as to why notice u/s. 148 should not be issued. As the assessee failed to respond to the same, the ld. AO after prior approval of the specified authority and order u/s. 148A(d) of the Act, dated 11.03.2023 which was duly issued and served upon the assessee, reopened the assessee's case vide notice u/s. 148, dated 11.03.2023, for the reason that the assessee has failed to explain the source of the investment by not filing the return of income, resulting in income chargeable to tax escaped assessment. The assessee filed her return of income dated 11.04.2023, declaring total income at Rs. 2,55,000/- in response to the said notice. The assessee was asked to furnish various details pertaining to her source of income and the purchase transactions entered into by the assessee and the assessee did not comply with the notice u/s....
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....ry evidences to show that the said loan was utilized for payment for the purchase of the property and the assessee has also failed to give evidence pertaining to the sale of immovable property during F.Y. 2013-14 in support of her contention and on perusal of the bank account statement of the assessee, there was only a meager opening balance in both the bank of India account as well as in the Mumbai District Central Co-Operative Bank account. The ld. AO also observed that out of the total investment of Rs. 26,61,403/-, the assessee's husband has paid Rs. 16,66,177/- out of his housing loan and the balance of Rs. 9,95,226/- was held to be an unexplained investment. Though, the assessee's contention that she was engaged in the business of the selling readymade garments and on perusal of her cash flow statement, the assessee has failed to explain by cogent evidence, the cash deposits aggregating to Rs. 12,37,153/- was also treated as unexplained money in the absence of the supporting documentary evidence. The ld. AO made an addition on both as unexplained investment u/s. 69 and 69A of the Act amounting to Rs. 9,95,226/- and Rs. 12,37,153/- aggregating to Rs. 22,32,379/-. The ld. AO de....
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....ence, the ld. AO has rightly reopened the assessee's case vide notice u/s. 148 of the Act. The ld. DR relied on the order of the lower authorities. 11. In the above facts of the case, the moot issue that ought to be decided is whether the reopening of the assessment is valid in terms of Section 149(1)(b) of the Act. It is observed that though the assessee has raised the grounds challenging the reopening before the first appellate authority, the same has not been adjudicated by the ld. CIT(A) who had merely remanded the issue to ld. AO for de novo assessment as the assessment order was on best judgment assessment were the assessee has failed to comply with the assessment proceeding. As it may be so, we deem it fit to decide the legal ground raised by the assessee though not decided by ld. CIT(A). For this, it is relevant to extract the provisions of Section 149(1)(b) of the Act for ease of reference: 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) .................................... (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his poss....
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....9;...... income chargeable to tax. which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more'. It cannot be stated that since the stage at which the notice is issued is at a premature stage, the entirety of consideration of Rs. 55,77,700/-ought to be taken note of. A plain reading of section 48 would provide that the entirety of sale consideration does not constitute 'income'. The memorandum explaining the provisions of Finance Act, 2021 does not in any way lead to giving a different interpretation to the words, 'income chargeable to tax'. The words used under section 149 for the purpose of extended time limit is to be interpreted in terms of the plain wordings of section 149 and cannot be construed differently while relying on any executive instruction. 13. From the above legal dictum, it is evident that only the income chargeable to tax which has escaped assessment has to be Rs. 50,00,000/- or more for the purpose of reopening which has to be qua the impend year and not the entire sale consideration. Even otherwise, the ld. AO has made an addition only to the extent of the part payment made towards the purchase of the propert....