Manoj Arjun Nasta Vs ACIT (ITAT Mumbai)
NRI Not Aware of Notices: Mumbai ITAT Restores Reassessment & Deletes Penalties u/s 271(1)(b) & 271(1)(c)
Tribunal heard three connected appeals, one relating to the quantum reassessment u/s 147 r.w.s. 144 & two arising from penalties u/s 271(1)(b) & 271(1)(c). AO had made an addition of ₹62,00,000/- treating investment in an immovable property as unexplained. Assessee submitted that he had been an NRI for several decades, permanently employed abroad, earning only foreign income, & therefore was not filing returns in India. Consequently, he was unaware that notices were being issued in India. Being continuously outside India, he did not receive any notices either from AO or from learned CIT(A). Two penalties were also levied solely due to such non-appearance. Assessee emphasised that the investment was made through proper banking channels from foreign earnings.
Tribunal noted that record supported Assessee’s consistent non-residential status & that he discovered the entire assessment only when he visited India after the demise of his father. Tribunal held that this constituted reasonable cause for non-compliance & that Assessee had no reason to expect notices in India when he had not been filing returns for decades. To ensure fairness, Tribunal restored the entire quantum assessment to AO for a de novo adjudication, directing AO to grant due & effective opportunity. Assessee was directed to cooperate fully & respond to all notices.
