Sonepal Singh Kohli Vs ITO (ITAT Mumbai)
The appeal before the ITAT Mumbai challenged the final assessment order passed under Section 144 read with Section 144C(13) of the Income Tax Act, 1961 for Assessment Year 2017-18 pursuant to the directions of the Dispute Resolution Panel (DRP).
The assessee, a Non-Resident Indian (NRI) residing in the USA since 2012, had not filed a return of income under Section 139(1) for the relevant assessment year. Based on information available in the ITBA/Insight Portal, the Assessing Officer noticed certain transactions during the year, including payments made to non-residents amounting to ₹2,86,782, deposits of ₹30,00,000, and purchase of foreign currency amounting to ₹38,33,956.
Since no return had been filed, the Assessing Officer reopened the assessment under Section 147 on the belief that income chargeable to tax had escaped assessment. Although a show cause notice under Section 148A(b) was issued, the assessee did not file any objections. Consequently, an order under Section 148A(d) was passed and notice under Section 148 was issued. The assessee also did not file a return in response to the notice under Section 148 and failed to respond to subsequent notices issued during the assessment proceedings.
As a result, the Assessing Officer completed the assessment ex parte under Section 144 on a best judgment basis. In the absence of any explanation regarding the source of investments in time deposits and purchase of foreign currency, an amount of ₹38,33,956 was treated as unexplained investment under Section 69. Further, interest credited to the bank account was treated as unexplained cash credit. Total additions of ₹71,20,738 were made in the draft assessment order.
