TMI Blog2017 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... ition in the hands of both the agents namely Shri Muzarraf Shah and Shri Akram Shah at ₹ 16,63,000 and no substantive addition has been made. For a protective addition to stand for, there has to be a substantive addition. Assessing Officer has proceeded in this matter in a haste and without complying with the necessary provisions of law and not providing any opportunity of being heard by merely observing that he had no other option except to pass the order u/s 144 as the matter was getting time barred. We are of the considered opinion that limitation of time in the hands of the Assessing Officer to frame the assessment cannot give him the power to make high pitched assessment without providing proper opportunity of being heard and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quashed. 3. Because no notice under section 143(2) having been issued and served on the assessee, the Commissioner of Income-tax (Appeals) has failed to appreciate that no variation can be made to the income returned and as such the assessment framed determining the income at ₹ 16,32,000 be modified/deleted. 4. Because the Commissioner of Income-tax (Appeals) as well as the Assessing Officer has erred in treating the assessee an 'agent' of the non-resident Indian Rajeev Hakeem, which treatment is contrary to the provisions of the section and bad in law, as no order under section 163(1)(d) has been passed treating the assessee as an 'agent', only show-cause notice has been given, whereas a separate order tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sold on July 3, 2006 effected by two persons namely Shri Akram Shah and Shri Muzarraf Shah holding power of attorney (POA) on behalf of the assessee. Subsequently, notice under section 142(1) of the Act dated January 28, 2015 was issued fixing the date of hearing on February 6, 2015. This notice was served on January 31, 2016 however, none attended on behalf of the assessee as well as the agent. As the matter was getting time barred, the Assessing Officer passed an order under section 144 making a protective addition of ₹ 16,63,000 in the hands of the agent Shri Muzarraf Shah. 5. Aggrieved, the assessee went in appeal before the Commissioner of Income-tax (Appeals) but could not succeed. Now the matter has travelled before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer can proceed for framing the assessment by issuing notice under section 142 of the Act. The learned Departmental representative further requested that the issue may be set aside to the file of the Assessing Officer for fresh adjudication. The assessee has raised two fold contention; firstly, raising a legal ground about the validity of the assessment order passed under section 144/147 and secondly, on the merits of the case for alleged protective addition for sale consideration from sale of property. 7. We have heard rival contentions and perused the records placed before us. First we will take up the legal ground challenging the validity of the Assessing Officer. We observe that the assessee Mohammad Rajiv Hakeem is a non-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such . It contemplates that in the case of a non-resident, if a person is having an authority to receive any income directly or indirectly, which in this case is sale consideration, then the Assessing Officer before proceeding ahead to make any assessment has to first give an opportunity to that person before treating him as an agent of non-resident and to examine as to whether this person can uphold liability to pay tax on behalf of the non-resident. From a perusal of the record we observe that since the beginning of the proceeding on January 28, 2015 nothing has been brought on record to prove that any such opportunity of being heard was provided to Shri Muzarraf Shah and Shri Akram Shah who were holding power of attorney on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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