Dhanji Murji Hirani Vs ITO (ITAT Rajkot)
Summary: The ITAT Rajkot Bench allowed the assessee’s appeal for AY 2019-20 and quashed the reassessment order on the ground that the approval under Section 151 of the Income-tax Act, 1961 was invalid. The Tribunal found that the approval document contained neither a physical nor a digital signature of the concerned authority and that the approval was granted mechanically without independent application of mind.
The reassessment arose after the assessee had not filed a return of income for the relevant assessment year. The Assessing Officer, relying upon information regarding financial transactions, initiated proceedings after following the procedure under Section 148A and issued notice under Section 148. During reassessment, the assessee was asked to establish the legitimate source of income used for remittances to the NRE account in India.
The Assessing Officer noticed an investment of Rs.1,00,60,306/- in a time deposit with Corporation Bank and, as the assessee did not initially furnish documentary evidence explaining its source, treated the investment as unexplained under Section 69 read with Section 115BBE. The DRP confirmed the addition after considering additional evidence, including salary and tax-paid income documents, passport, source statements, permanent-residence documents, and evidence concerning earlier FDRs and their maturity proceeds.
