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Judgment
PER ANUBHAV SHARMA, JM:
These appeals preferred by the Assessee against the common order of the Ld. National Faceless Appeal Centre (NFAC) (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 144/147/148 of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under: -
| ITA No. & AY | Ld. FAA who passed the appellate order | Appeal No. & Date of order of the Ld. FAA | AO who passed the assessment order & Date of order |
| 6449/D/25 2015-16 | NFAC, Delhi | DIN & Order No : ITBA/NFAC/S/250/2025-26/1079581043(1) Dated 13.08.2025 | NFAC, Delhi Dated 29.03.2022 |
| 6450/D/25 2016-17 | NFAC, Delhi | DIN & Order No : ITBA/NFAC/S/250/2025-26/1079582019(1) Dated 13.08.2025 | Assessment Unit, Income Tax Department Dated 19.05.2023 |
The assessee is a resident of Delhi and claims to be in business of manufacturing and trading of sweet and snacks in the name and style of Gupta Sweets. The case of assessee was reopened by notice u/s 148 dated 21.07.2022 for AY; 2016-17 and this reopening itself has been challenged by way of ground No. 7 on the basis that the reopening notice is hit by the decision of Hon’ble Supreme of India in Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC). In this context, we find that as notice u/s 148 was issued on 22.06.2021 and TOLA had extended the period of issuance of notice u/s 148 up to 30.06.2021. Thus, there was surviving period of 8 days for issuance of notice which was treated as a notice u/s 148A(a) under the new regime. The assessee had responded u/s 148A(b) on 01.07.2022 consider surviving period of 8 days the order u/s 148A(d) could have been passed up to 09.07.2022 only while the same has been passed on 21.07.2022. Thus, assumption of jurisdiction u/s 148 notice vitiated and these facts and settled position of law could not have been disputed by the ld. DR. Accordingly, corresponding ground deserves to be sustained and the appeal of the assessee for AY: 2016-17 deserves to be allowed. Accordingly, ordered.
It is also pointed out that when the notice u/s 148 was issued on 13.07.2022 which was issued with a prior approval of PCIT-12, Delhi and not PCCIT. This issue is also covered against the department on the basis of decision of Hon’ble Supreme Court in Rajeev Bansal (supra).
Coming to the facts of the case for AY: 2015-16 we find that reasons for issue notice u/s 148 for AY: 2015-16 were issued in the case of assessee on the basis of information shared by the ITO, TDS, Ward-1(1)(2) International Taxation, New Delhi, upon us on the basis of survey action conducted at premises of Arun Suri resident of 255 Sainik Vihar, Preetampura on 06.02.2018. During survey action it was found that in Financial Year 2014-15 assessee had made foreign remittances worth Rs.10,18,00,000/- to Hong Kong & Sanghai banking corporation limited. The assessee had filed return of income showing gross turnover/receipts of Rs.11,45,230/- and total taxable income of Rs.2,79,710/-. Thus, on this basis income chargeable to tax escaping the assessment the case of assessee was reopened. The assessee had claimed that the assessee is engaged in the business of manufacturing and trading of sweets and snacks under the name of M/s. Gupta Sweets. The assessee has stated that in connection with M/s. Bhuvi Enterprises, the assessee has been a victim of fraud and since he was totally ignorant of the said business and has no relation with the same. Further the assessee also stated that there is also as enquiry going on with the Enforcement Directorate and CBI for the same where his statement has been recorded. The assessee also states that as per his point of view after all such investigations by the said department he has not been found guilty.
However, ld. Assessing Officer was not satisfied and concluded that the above reply of the assessee has been carefully gone through and mere statement of facts without any supporting evidences regarding the financial events involved with the assessee cannot be accepted. Any prudent individual, if involved in a fraud will produce various papers put up in from of various law enforcement authorities to prove his situation. However, the assessee has just written the same in a paper and submitted it. The same cannot be accepted and in view of the largeness of the issues involved in the case. Since the assessee has not provided with any further information regarding the same, the undersigned has no option but to accept the information available as per the recordings made during the proceedings of section 147 of the Income-tax Act, 1961. Hence an amount of Rs.10,18,00,000/- is added to the total income of the assessee under the provisions of section 69A of the Income-tax Act, 1961. Further Penalty u/s. 271(1)(c) is initiated separately for concealment of particulars of income of Rs.10,18,00,000/-.
We find that in the reason itself assessing officer has observed as follows:
“3.I have examined the material available on hand and information available on system. It is clear that during the financial year the assessee had remitted Rs. 10,18,00,000/- to Hongkong and Sanghai Banking Corporation Ltd. under the name of his fictitious firm M/s Bhuvi Enterprises which was created for money laundering. During interrogation the assessee has accepted that vide para 5.3 of the statement recorded on oath as under:
"Statement of Shri Ajay Kumar, prop. M/s Bhuvi Enterprises, a front firm opened by Arun Suri was recorded u/s 50 of PMLA, 2002 on 21.06.2017 wherein he interalia stated that Ram Pratap Singh had informed him that one Ashwani Bhardwaj, who used to come to his shop for repairing his motorcycle, was employed with Arun Suri on a salary of Rs. 15000/- per month that Ram Pratap Singh had also told him about the mobile import business of Arun Suri for which he needed to open firms in the names of others that since he was in need of money he agreed to the offer and gave a copy of his PAN card to Ram Pratap Singh, that on the instructions of Arun Suri/Ashwani Bhardwaj he went to the office of Arun Suri situated at Moti Nagar, Delhi where he took his signatures on various documents, that on the instructions of Arun Suri he had gone to submit these documents to Bank of Baroda, Ashok Vihar and as per my knowledge these documents were related to the opening of accounts of the firm (M/s Bhuvi Enterprises) opened by Arun Suri in his name that he was paid a salary of Rs. 15000/- per month in cash by Arun Suri that after opening the bank accounts they were called by Arun Suri on various occasions for signing various documents that he had no knowledge about the work done in the firm opened in his name by Arun Suri and when asked about the same he always said that the turnover of the firms of Arun Suri was quite large and these firms where opened for tax saving purposes, that today he was shown the account opening form with Bank of Baroda, Ashok Vihar, that to open this Bank account the doments like Adhar card and PAN card used by Sh. Arun Suri are my own but he have no knowledge of the other documents submitted at the time of account opening."
Therefore, it is evident that the assessee has intentionally created a fake firm under the name of M/s Bhuvi Enterprises with Sh.Arun Suri. The modus operandi of these entities are that they made facilitators in active connivance with importers and exporters created front companies in the name of persons with no financial worth to undertake import export business and took IEC Number from DGFT on the basis of the documents like PAN cards and driving licences. Bank accounts of these front companies were operated in Bank of Baroda. These facilitators simultaneously created/purchased companies in Dubai and Hong Kong in which they appointed their own persons to operate and also opened the bank accounts of these companies abroad, the exporters also opened companies in Hong Kong and Dubai to receive the remittances from the fictitious companies created/purchased in Hong Kong and Dubai. The said alleged fake importers through the facilitators submitted fake proforma invoice created by them and other mandatory forms/declarations for the purported future imports like form A-1 (in case of purported import of goods) and declaration to the effect that goods would be imported within stipulated period and that in the event of non import of goods, the fund remitted outside would be repatriated back to India.
In this case the assessee had remitted a total amount of Rs. 10,18,00,000/- to Hong Kong and Sanghai Banking Corporation Ltd during the FY 2014-15 relevant to AY 2015-16. Since, the income declared by the assessee in his ITR does not reflect the actual position of total amount remitted by the assessee to Hong Kong and Sanghai during the financial year, hence the whole total amount of Rs.10,18,00,000/- is remained unexplained. The whole amount involved is unexplained income of the assessee for the period under consideration. Considering the unexplained nature of amount involved, it is clear that the assessee had income chargeable to tax during the A.Y 2015-16. Despite having income chargeable to tax, the assessee has not furnish any return of Income. The case of assessee accordingly come under explanation 2(b) of section 147 of Income Tax, 1961 which lay down that the following shall also be deemed to be case where income chargeable to tax has escaped assessment " where a return of income has been furnishes by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income of has claimed excessive loss, deduction, allowance or relief in the return.”
At the time of hearing we found that on behalf of assessee for AY: 2015-16 it has been contended that assessee was not properly represented before ld. First Appellate Authority and in fact no notice were issued thus, received by the assessee. Then ld. DR defended this assertion however, we find that in the impugned order NFAC has not mention as to when and by what mode notices were issued and what was the response of the assessee. Ld. Counsel has submitted that ld. CIT(A) has invoke provision of Section 69A and assessee was not found to be owner of any money, bullion, jewellery or other valuable articles and he was charged of making remittances from the bank account which was non refundable in nature. Therefore, assessee cannot be considered to be.
In the light of aforesaid we consider it appropriate case where this legal issue should be covered by the ld. CIT(A) and accordingly we restore the issue on merits as well as law in fresh adjudication of ld. CIT(A). The appeal for AY: 2015-16 is allowed for statistical purposes.