TaxTMI 
TaxTMI 
2026 (6) TMI 479
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....e information available with the Department, the assessee had entered into a substantial financial transaction during the financial year 2015-16 relevant to the assessment year 2016-17, being purchase of an immovable property for a consideration of Rs. 2,00,00,000/-. 3. On the basis of the said information, proceedings under section 148A were initiated and an order under section 148A(d) was passed on 26.03.2023. Thereafter, notice under section 148 was issued after obtaining approval under section 151 of the Act. The assessee did not respond to the said notice. Subsequently, notice under section 142(1) dated 10.10.2023 along with questionnaire was issued, followed by a reminder dated 09.11.2023. Since there was no compliance, show cause notices dated 13.12.2023 and 20.12.2023 were issued proposing to complete the assessment under section 144 and to make addition of Rs. 2,00,00,000/-. 4. In response to the show cause notice dated 20.12.2023, the assessee submitted reply on 24.01.2024 stating that it is engaged in the business of development of land and plots and that the land in question was purchased during financial year 2014-15. It was stated that the source of funds for pu....
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....order was passed under section 144 due to non-compliance by the assessee and that several factual contentions were raised for the first time before the appellate authority. It was further observed that the Assessing Officer did not have the opportunity to examine such contentions and that the issues involved required factual verification. Accordingly, the CIT(A) held that it would be just and proper to restore the matter to the file of the Assessing Officer with a direction to frame the assessment afresh after giving due opportunity to the assessee and after carrying out necessary verification and enquiry on all factual and legal contentions. The assessment was thus set aside and the appeal was allowed for statistical purposes. 8. Aggrieved by the order of the CIT(A), the assessee is in appeal before us raising following grounds of appeal: 1. The reassessment is invalid and without jurisdiction as the appellant has declared returned income exceeding Rs. 20,00,000/- and therefore, jurisdiction over appellant lies with Circle not with ITO, Ward as per CBDT Instruction No.1/2011 F.No.187/12/2010-IT(A-I) dt: 03.01.2011 and hence, the reassessment initiated vide notices u/s ....
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....o. 41. 10. The AR emphasised that the said reply, though partly reproduced in the assessment order, has not been properly appreciated by the Assessing Officer. It was specifically submitted that in the reply, the assessee had categorically clarified that no purchase of land was made during the financial year 2015-16 relevant to assessment year 2016-17, and that the transaction referred to by the Department pertained to financial year 2014-15 relevant to assessment year 2015-16. The AR drew attention to the relevant extract of the reply wherein it was stated that the assessee had not purchased any land in the assessment year under consideration and that no return of income was filed for the year due to absence of taxable income. The AR further submitted that the Assessing Officer, in para 3.4 of the assessment order, has acknowledged the explanation of the assessee that the transaction pertained to financial year 2014-15 and was based on a registered purchase agreement dated 29.04.2014. However, the said explanation was rejected merely on the ground that a sale agreement cannot be taken as evidence of a property transaction and that agreement alone cannot legally effect transfer ....
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....ice under section 148A(b) of the Act, passing an order under section 148A(d), and thereafter issuing notice under section 148 of the Act. 14. In rebuttal, the learned AR submitted that in the present case, all notices under section 148A(b), the order under section 148A(d), and the notice under section 148 were issued on incorrect and obsolete email IDs which were not in use by the assessee during the relevant period. It was thus contended that there was no effective service of notice upon the assessee and consequently the assessee was deprived of a meaningful opportunity to respond at the stage of section 148A proceedings. 15. We have heard the rival submissions and perused the material available on record. The grievance of the assessee, inter alia, is that the learned CIT(A) has set aside the assessment without adjudicating the grounds raised before him, including the legal grounds, and the addition made by the Assessing Officer is otherwise unsustainable on merits. 16. At the outset, we find merit in the contention of the assessee that the learned CIT(A) has not discharged the appellate functions vested in him under section 250 of the Act. From the perusal of the impugne....
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....s not brought any material on record to controvert the claim of the assessee that the transaction was executed in the earlier year. The evidences placed on record, including registered document and bank statements, demonstrate that the consideration of Rs. 2,00,00,000/- was paid during financial year 2014-15. 21. Once the assessee has discharged its primary onus by producing documentary evidence demonstrating that the transaction pertains to an earlier year, the burden shifts upon the Revenue to establish that the investment was made during the year under consideration. In the present case, the Assessing Officer has failed to discharge this burden and has proceeded merely on the basis of information without any independent verification. 22. It is a settled position of law that an addition under section 69 of the Act cannot be sustained merely on the basis of suspicion, conjectures or unverified third-party information, without the Assessing Officer discharging the primary burden cast upon him to establish that the assessee has in fact made an investment during the year under consideration which remains unexplained. In this regard, we find support from the judgment of the Hon'....