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Judgment
PER M. BALAGANESH, A. M.:
The appeal in ITA No.6569/Del/2025 for AY 2018-19, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 22.08.2025 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.03.2023 by the Assessing Officer, NFAC. Delhi (hereinafter referred to as ‘ld. AO’).
The Ground Nos.1 & 2 raised by the assessee were with regard to the challenge of validity of assumption of jurisdiction under section 147 of the Act and consequential framing of reassessment order by the Learned AO. No arguments were advanced by the Learned AR before us in this regard. Accordingly, the Ground Nos. 1 & 2 raised by the assessee are hereby dismissed as not pressed.
The Ground Nos. 3 to 8 raised by the assessee are challenging the additions made on account of unexplained investment under setion 69A of the Act and consequential alleged commission income thereon.
We have heard the rival submissions and perused the materials available on record. The Assessee had not filed its return of income for the assessment year 2018-19. The information was received by the Income Tax Department that Assessee had purchased foreign currency of Rs. 1,04,42,410 during the year and received commission or brokerage under Section 194H of the Act of Rs. 3,205. Accordingly, the case of the Assessee was sought to be reopened under Section 147 of the Act. Notice under Section 148 of the Act stood issued to the Assessee on 26-03-2022. No return was filed by the Assessee in response to the said notice. The Learned AO proceeded to complete the re-assessment by making an addition of Rs. 1,04,42,410 as unexplained money under Section 69A read with Section 115BBE of the Act and commission income of Rs. 3,205, due to non-cooperation from the side of the Assessee by furnishing the requisite details. Aggrieved, the Assessee preferred an appeal before the Learned CIT(A). Before the Learned CIT(A), it was submitted that -
a. The assessee Rely Travel Company came into existence as a partnership firm vide Partnership Deed dated 9-5-2014, conducting the business of travel facilitation.
b. The firm filed its return of income up to assessment year 2017-18 only, as it was the last year of its operations.
c. The partners failed to close / dissolve the firm and surrender its PAN.
d. During the course of business, the firm transacted for forex purchase with one Pound Wise Forex Private Limited having its office at 212, Arunachal Building, Barakamba Road, New Delhi -110001. The firm did not have any financial dealings during the assessment year under consideration and its bank account was also inoperative with no transactions.
e. The promoters and directors of M/s Pound Wise Forex Private Limited and an employee one Mr. Dinesh Kumar knowing fully well that Rely Travel Company was inoperative, with fraudulent intent, misused their PAN for issuing forex to certain people against cash receipts to avoid detection by income tax authorities and making the transactions appear in the name of Rely Travel Company.
f. Since the firm was inoperative, the partners had no knowledge of any income tax proceedings and came to know of the same after they were served with the demand notices.
g. After enquiring about the transactions from Mr. Dinesh Kumar, who admitted to the fraud committed by him and his company, the partner approached and filed complaints with the Economic Offences Wing by registering an First Information Report (FIR).
h. The Economic Offences Wing informed the partners of Rely Travel Company that there were similar complaints against Pound Wise Forex Private Limited from other travel companies as well which had closed down their operations and their PAN being misused.
The Learned CIT(A) however did not heed to the aforesaid contentions of the Assessee and proceeded to dismiss the appeal of the Assessee.
Before us, the Learned AR submitted that the FIR was registered with Economic Offences Wing on 30-6-2023 (evidence enclosed in Page 103 of the Paper Book) after the completion of re-assessment proceedings for the Assessment Year 2018-19 on 27-3-2023. It was submitted that the same compliant had been taken due cognizance by the Learned AO in the immediately succeeding year i.e. Assessment Year 2019-20 wherein only 1% of transactions was added as commission income in the hands of the Assessee and reassessment completed on 4-3-2024 and referred to the said reassessment order in Pages 140 to 141 of the Paper Book. The Learned DR placed on record the para wise comments of the Learned AO.
Considering the aforesaid facts, we are inclined to restore this appeal to the file of the Learned AO for denovo adjudication in accordance with law in the interest of justice and fairplay, to decide based on the final outcome of the FIR lodged with Economic Offences Wing or in the alternative assess only the commission income @ 1% as was done in the case of the Assessee for Assessment Year 2019-20. With these directions, the ground numbers 3 to 8 raised by the Assessee are allowed for statistical purposes.
The Ground No. 9 is challenging the levy of interest under sections 234B, 234C and 234D of the Act. The same is consequential in nature.
The Ground No. 10 raised by the Assessee is general in nature and does not require any specific adjudication.
In the result, the appeal of the Assessee is partly allowed for statistical purposes.