S. 148 : Reassessment-Unexplained money-Undisclosed foreign bank account-Notice u/s 143(2) was not issued within specified time limit-Reassessment was completed beyond period of limitation, exchange of information came into operation from the first day of April, 2011 whereas the relevant financial year corresponding to the assessment year 2007-08 is from 01.04.2006 to 31.03.2007-Reassessment order is quashed as time barred. [S. 69A 133A, 143(2), 147]
On the basis of information received from the ‘French’ Government indicating that the assessee was maintaining a foreign bank account in HSBC Geneva, Switzerland. The said information is commonly known as the base note in relation to bank account. The said base note containing personal details of the assessee including his name, date of birth, place of birth, sex, nationality along with date of opening bank account and amount of the balance in particular year. Subsequently, a survey u/s 133A of the Act was carried out on 30.09.2011 by the Investigation Wing of the Income-tax Department, Mumbai. During the survey proceedings, the assessee was confronted with the information related to the foreign bank account, then, he accepted the amount lying in the foreign bank account as undisclosed income in his hands. In view of the information received coupled with the finding during the course of the survey proceedings, the Assessing Officer recorded reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 30.03.2012. During the course of the reassessment proceedings, a summon u/s 131 of the Act was also issued to the assessee. Further a show cause notice was also issued on 23.10.2013 calling upon as why the balance amount of Rs.19,48,46,625/- equivalent to USD 43,29,943 (@ 45 INR per USD) should not be added to the total income of the assessee . The assessee contended that the said account was neither opened nor operated or controlled by him. The Ld. Assessing Officer related the balance lying in foreign bank account of Rs.19,48,46,625/- as unexplained income as part of total income of the assessee u/s 69A of the Act. . CIT (A) affirmed the order of the AO . On appeal allowing the appeal the Tribunal quashed the reassessment on the ground that no notice u/s 143(2) was issued within specified time , reassessment was completed beyond period of limitation, exchange of information came into operation from the first day of April, 2011 whereas the relevant financial year corresponding to the assessment year 2007-08 is from 01.04.2006 to 31.03.2007 and therefore, said protocol was not in operation during the period relevant to the assessment year therefore, this reference which was sent by the AO in the year under consideration was invalid . The Tribunal also observed that addition has been made on the basis of photocopy of a document commonly known as a base note of bank account with HSBC Geneva. The said base note was obtained by a nonofficial route by the French government and then same has been forwarded to the Indian government. But the existence of said bank account has not been confirmed by the HSBC, Geneva. therefore no addition can be sustained on merit also. As the reassessment is quashed the Tribunal has not decided the issue on merits. Followed . Shri Pravin Sawhney v. ACIT in ITA No. 1539-1544/Mum/2017 dt. 08/09/2017 ACIT v. Sh. Parminder Singh Kalra in ITA No. 5330/Del/2016, dt. 15/06/2021 (ITA No. 679/Mum/2025 dt. 15-4-2025)(AY. 2007 -08 )
Kalpana Dilip Mehta as Legal Heir of Dilip Dalpatlal Mehta v. ACIT (Mum.)(Trib.); www.itatonline.org
[Coram : Hon’ble Shri Om Prakash Kant (AM) and Hon’ble Shri Raj Kumar Chauhan (JM)]