SRI. ARAVIND KUMAR BOINPALLY,TELANGANA V. ITO, WARD, INTL. TAXATION-1(1), BENGALURU

ITITA 2338/BANG/2024

AI Insights

The case involves Shri Aravind Kumar Boinpally, a non-resident Indian, who appealed against the order of the Income Tax Officer, Ward - International Taxation 1(1), Bangalore, concerning the assessment year 2016-17. The AO had made a draft assessment order based on transactions related to immovable property and income from other sources, which the assessee contested. The Dispute Resolution Panel (DRP) rejected additional documents submitted by the assessee on technical grounds, leading to the appeal. The Tribunal found that the assessee was not granted an effective opportunity to substantiate his claims and thus set aside the AO's order, directing a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312838 (ITAT-BANGALORE)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Other Referred Cases: IT(IT)A No. 2126/Bang/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEERA MALHOTRA
• Assessee Lawyers: T. SRINIVASA; CITING
• Keywords: Set aside; Additional evidence; Unexplained investment; Salary income; Period of limitation; Principle of natural justice; Time period of passing order
• Section: 147; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER IT(IT)A No. 2338/Bang/2024 Assessment Year : 2016-17 Shri Aravind Kumar Boinpally, H.No-8-5-283/Plot No- 162, Madhava Nagar Colony, Karmanghat, RangaReddy, Telangana – 500 079. PAN: AKLPB0269R Vs. The Income Tax Officer, Ward – Intl Taxation 1 (1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri T. Srinivasa, CA Revenue by : Ms. Neera Malhotra, CIT-DR Date of Hearing : 16-04-2025 Date of Pronouncement : 30-04-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the ITO, Ward – International Taxation 1(1), Bangalore dated 25/10/2024 in respect of the A.Y. 2016-17 and raised the following grounds: “1. The impugned order passed by the Income Tax Officer Ward INTL. Taxation 1(1) is highly unjust, arbitrary and contrary to law and the principles of natural justice. 2. That, in the facts and circumstances of the case, the Learned Assessing Officer was not justified to have Page 2 of 5 IT(IT)A No. 2338/Bang/2024 concluded the proceedings without providing adequate / sufficient opportunity to the appellant to submit his responses, since he was an NRI and has to approach a local professional to provide the required professional assistance to him. 3. That, in the facts and circumstances of the case, the Learned Dispute Resolution Panel (Hereinafter referred to as DRP) was not justified to have declined to admit the documents/ evidences filed by the appellant purely on a technical ground of not filing a separate application under Rule 9 of the DRP Rules and thus acting contrary to the principles of natural of justice. 4. That, in the facts and circumstances of the case, the Learned DRP, ought to have afforded in opportunity to the appellant to file the additional evidences by curing the defect and thus comply with Rule 9 of the DRP Rules, in the interest of justice. 5. That, in the facts and circumstances of the case, the learned DRP ought to have taken into consideration the documents submitted by the Appellant and passed appropriate directions to the AO in accordance with law For the above grounds and such other grounds that may be urged at the time of hearing with kind permission, the Appellant most humbly pray and submit that the Hon'ble Tribunal may kindly be pleased to allow the Appeal in the interest of justice.” 2. The brief facts of the case are that the assessee is a non-resident Indian and during the period from 19/11/2022, he was residing at USA. The AO based on the information obtained through the insight portal in accordance with the Risk management strategy formulated by the CBDT, had come to the conclusion that the assessee had undertaken some transactions of purchasing an immovable property but no return of income was filed by him. Therefore the AO made draft assessment order and communicated the same to the assessee for which the assessee filed his objections before the Ld.DRP and also enclosed various documents in support of its case, but unfortunately the Ld.DRP had refused to look into the additional documents filed before it for the reason that the same was not Page 3 of 5 IT(IT)A No. 2338/Bang/2024 filed along with a petition to admit the additional evidences and further the assessee filed the said documents at the fag end of the limitation period and therefore refused to consider the said documents and confirmed the draft assessment order passed by the AO. Based on the directions of the Ld.DRP, the AO made the assessment u/s. 147 of the Act. The AO had treated the investments as an unexplained investment u/s. 69 of the Act. Similarly, the AO also treated the interest income as income from other sources. 3. As against the said order, the assessee is in appeal before this Tribunal. At the time of hearing, the Ld.AR submitted that the assessee is an NRI and during the notice period, he was residing in USA and he has no e-filing account in the income tax portal. The Ld.AR further submitted that all the notices were not received by the assessee except the notice dated 07/12/2023 and thereafter the assessee created his profile on 11/12/2023. Thereafter the assessee came to know about the various notices issued but by that time, the AO had passed the draft assessment order and therefore the assessee filed all the details before the Ld.DRP but unfortunately the Ld.DRP had refused to look into the documents submitted by the assessee by way of additional evidence and therefore the Ld.AR submitted that the assessee was not granted any effective opportunity to substantiate his claim and prayed for another opportunity to appear before the AO. The Ld.AR also relied on the order of this Tribunal in IT(IT)A No. 2126/Bang/2024 dated 27/12/2024 in support of his contention in which similar dispute was decided by this Tribunal. 4. The Ld.DR relied on the order of the lower authorities and prayed to dismiss the appeal filed by the assessee. 5. We have heard the arguments of both sides and perused the materials available on record. Page 4 of 5 IT(IT)A No. 2338/Bang/2024 6. We have perused the documents filed by the assessee before the Ld.DRP and found the assessee was a non-resident Indian and he has no e- account in the income tax portal and therefore his contention that notices were not received by him seems to be a genuine one. Even though the assessee had not responded to the various notices issued by the AO, pursuant to the draft assessment order issued u/s. 144C of the Act, the assessee tried to explain the facts before the Ld.DRP and also furnished the documents to substantiate his claim. But unfortunately, the Ld.DRP in para nos. 4.1.11 and 4.1.12 had rejected the additional evidence filed by the assessee since the same are not in accordance with the DRP rules and also the additional evidence were filed at the fag end of the limitation period. From the said finding, we understand that the assessee is having the documents but the DRP on technical grounds had rejected the said documents and passed the directions. We are of the view that the said finding of the Ld.DRP is against the principles of natural justice. Further, in the appeal order cited by the Ld.AR in para no. 15, the Tribunal in IT(IT)A No. 2126/Bang/2024 had given the following finding: “15. In view of the above facts, we restore the whole appeal back to the file of the learned assessing officer with a direction to the assessee to substantiate before learned assessing officer that there is no income chargeable to tax in the hands of the assessee in India except, the salary income and income from other sources which is stated to be in the computation of total income filed before the learned dispute resolution panel and further there is no income assessable u/s. 69 of the Act in case of the assessee. The ld. assessing officer may verify the same and decide the issue in accordance with the law, first passing the draft assessment order. The assessee may thereafter file an objection before the learned dispute resolution panel, if he wishes to object to the draft assessment order.” 7. The facts involved in the present appeal are similar to the facts involved in the decision relied on by the Ld.AR. In the said case also, the Ld.DRP had not considered the documents filed by the assessee by citing the technical grounds as well as the limitation grounds and in the present case also similar finding was given by the Ld.DRP. In such circumstances, the Tribunal had held that the assessee was not heard properly and Page 5 of 5 IT(IT)A No. 2338/Bang/2024 therefore set aside the issue to the file of the AO with a direction to consider the relevant documents filed by the assessee. 8. We are also in agreement with the view expressed by the Tribunal in the earlier order dated 27/12/2024 and by following the said order, we are also setting aside the order of the AO and restore the matter to his file with the direction to consider the issue afresh after receiving the documents filed by the assessee and pass a fresh draft assessment order and thereafter pass a final order. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 30th April, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 30th April, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore "