P P Industries Vs ITO (ITAT Guwahati)
Foreign Remittance Addition Deleted Because Revenue Failed to Prove Unexplained Expenditure; ITAT Upholds Reassessment Notice Because Retrospective Section 147A Validates Jurisdiction; Addition Under Section 69C Quashed Because Foreign Remittances Were Recorded in Books; ITAT Deletes Income Addition Because Revenue Mixed Up Financial Records of Different PAN Holders.
The Income Tax Appellate Tribunal (ITAT), Guwahati partly allowed the appeal for Assessment Year (AY) 2019-20, arising from the order of the Commissioner of Income Tax (Appeals)-NFAC dated 20.11.2025.
The assessee, a partnership firm, challenged the validity of the reassessment proceedings as well as additions made by the Assessing Officer (AO). The assessee contended that the notice issued under Sections 148A(b), 148A(d), and 148 was invalid because it had been issued by the Jurisdictional Assessing Officer instead of through a faceless mechanism as required under Section 151A and the e-Assessment of Income Escaping Assessment Scheme, 2022. The assessee also disputed additions relating to foreign remittances to China, alleged suppressed business income, and transactions attributed to another partnership firm having a different Permanent Account Number (PAN).
The AO had initiated reassessment proceedings after detecting foreign remittances amounting to ₹2,37,35,765 made through Union Bank of India. During the reassessment, the AO observed that the assessee was operating with three different PANs and consequently made an addition of ₹23,29,706 under Section 28 as suppressed business income and ₹2,37,35,765 under Section 69C read with Section 115BBE as unexplained foreign remittance expenditure. The total income was determined at ₹2,40,65,470.
