Aziz Fida Ali Rahemani, Ahmedabad V. The ITO, Ward- 3(3)(1), Ahmedabad

ITA 562/AHD/2023

AI Insights

This case involves an appeal by Aziz Fida Ali Rahemani against the order of the National Faceless Appeal Centre (NFAC), which confirmed the reopening of his assessment for the year 2011-12 under section 147 of the Income Tax Act and the subsequent addition of Rs. 33,76,651 under section 69. The assessee, a non-resident Indian (NRI), argued that the reopening was without jurisdiction as his case should have been handled by the International Taxation department. The Tribunal dismissed the jurisdictional challenge but accepted the assessee's explanation regarding the source of his investments, leading to a partial allowance of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131568 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 05-09-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 13-07-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Tax effect; Condonation of delay
• Section: 147; 69; 148; 139

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Ms. Suchitra Kamble, Judicial Member Aziz Fida Ali Rahemani, 304/5, Akira Heights, Nr. Ashiyana Green s, Sarkhej Road, Ahmedabad PAN: AKXPR199 6H (Appellant) Vs The Income Tax Officer, Ward-3(3)(1), Ah med abad, (Resp ondent) Asses see b y : Shri Tej Sha h, Advo cate Revenue by : M s. S aumy a Pa ndey Ja in, Sr. D. R. Date of hearing : 06-09 -2 023 Date of pronouncement : 13-09 -2 023 आदेश/ORDER This is an appeal filed against the order dated 04-05-2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2011- 12. 2. The grounds of appeal are as under:- ITA No. 562/Ahd/2023 Assessment Year 2011-12 I.T.A No. 562/Ahd/2023 A.Y. 2011-12 Page No. Aziz Fida Ali Rahemani. vs. ITO 2 Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) 1. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening the case of the appellant u/s 147 of the act without jurisdiction. 2 That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making an addition of Rs. 33,76,651/- u/s 69 of the act. Total tax effect (see note below) Rs. 25,51,310,/- 3. The assessee is an individual and in response to notice u/s. 148 filed the return of income for the assessment year 2011-12 on 05-12-2018 and admitted the total income of Rs. 1,06,660/-. The assessment order passed the order u/s. 147 r.w.s. 144 and disallowed an amount of Rs. 33,76,551/- u/s. 69 of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before ld. CIT(A). The ld. CIT(A) dismissed the appeal of the assessee. 5. There is a delay of 11 days in filing appeal for which the assessee filed condonation of delay application. It appears that the delay is genuine, hence condoned. I.T.A No. 562/Ahd/2023 A.Y. 2011-12 Page No. Aziz Fida Ali Rahemani. vs. ITO 3 6. The ld. Authorized Representative submitted that the assessee is a non-resident Indian (NRI) having business since 1996. The assessee’s case was re-opened and in response to notice u/s. 148, the assessee filed return on 05-12-2018 declaring total income at Rs. 1,06,660/-. The Assessing Officer passed assessment order u/s. 144 of the Act by treating investment in Mutual Fund, its interest as unexplained u/s. 69 of the Act. The ld. Authorized Representative submitted that during the year under consideration, the assessee, he has an individual investment in mutual fund to Rs. 32,70,000/- and the said investment was made out of LIC maturity amount of Rs. 16,22,536/- which was received in HDFC Bank Account. Further, an amount of Rs. 16,50,000/- was received by the assessee from his wife who has also a LIC maturity amount of Rs. 16,48,520/- during the year under consideration. He has given an amount of Rs. 16,50,000/- to the assessee out of above mentioned amount of LIC and also ld. Authorized Representative submitted that Assessing Officer was not justified in passing the order thereby reopening case of the assessee u/s. 147 of the Act without jurisdiction as the assessee is an NRI and the Assessing Officer relating to International Taxation for the past three years. The ld. Authorized Representative further submitted that the case of the assessee was selected for scrutiny and thereafter an application was made to the Assessing Officer on online portal to transfer the case to international taxation as the assessee is an NRI and his jurisdictional Assessing Officer lies with international taxation. Without taking cognizance of the said application, the Assessing Officer finalized the assessment order u/s. 144 of the Act which is bad in law and without any jurisdictional as well void ab-initio and therefore requires to be deleted. The ld. Authorized Representative further submitted before the I.T.A No. 562/Ahd/2023 A.Y. 2011-12 Page No. Aziz Fida Ali Rahemani. vs. ITO 4 Assessing Officer that the assessee has explained source of the investment, mutual fund and in fact the assessee before the ld. CIT(A) also has taken cognizance of the additional evidences but has not commented on the same. Thus, the ld. Authorized Representative submitted that the addition made in assessee’s case be deleted. 7. The ld. Departmental Representative submitted that the assessee has not filed return u/s. 139 and in fact the return was filed after the issuance of notice u/s. 148 and therefore the validity of the assessment does not come in picture. As relates to merits of the case, the ld. Departmental Representative relied upon the order of the ld. CIT(A) as well as assessment order. 8. Heard both the parties and perused the materials available on record. It is pertinent to note that the assessment was duly passed and the assessee after reopening has filed return of income. The assessee though brought on record the Income Tax Return for claiming that the assessee is a non- resident Indian and the present Assessing Officer has to be International Taxation’s Assessing Officer, it cannot raise jurisdictional issue as income derived is from India. Thus, ground no. 1 is dismissed as relates to merits of the case. It is pertinent to note that the assessee through evidences before the ld. CIT(A) has explained how the investment made out of LIC maturity amount of the assessee as well as assessee’s wife for which the assessee has filed the confirmation of surrender from the HDFC Life and also filed bank statement in consonance with the said confirmation issued by the HDFC Life. Thus, the addition does not sustain as the assessee has explained the investment. Thus, the appeal of the assessee is partly allowed. I.T.A No. 562/Ahd/2023 A.Y. 2011-12 Page No. Aziz Fida Ali Rahemani. vs. ITO 5 9. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 13-09-2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad : Dated 13/09/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद