The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no assessment should be framed on the basis of Base Note if assessee signed Consent Waiver Form. Therefore, the bench set aside the order of lower authority.
Assessse Pratap Joisher,filed his original return of income declaring total income of Rs.3,72,872/- and Rs.6,74,637/- for Assessment Year 2006-07 and 2007-08.
Subsequently on receiving information by the Central Board of Direct Taxes (CBDT) from French Authority under Article 28 of the Indo France Fiscal Convention (Treaty) qua banking relationship maintained by the assessee at HSBC Bank, Geneva, Switzerland which he has not disclosed in his return of income.
Assessing officer collected all information on behalf of the assessee from his son and he responded that neither he nor his father nor any of his family members are having any bank account in HSBC Bank, Geneva or any bank abroad.
On the basis of information assessing officers reopen the assessment as per section under Section 147 of the Income Tax Act by issuance of notice under Section 148 of the Income Tax Act. Thereafter verifying assessing officer found that assessee has bank account with HSBC Bank, Geneva, Switzerland referred to the base note.
Declining the contentions raised by the assessee that the assessee is
not having any bank account as alleged and the information
referred to as “base note” has nothing to do with the assessee the
AO reached the conclusion that the assessee has bank account with
HSBC Bank, Geneva, Switzerland.
AO considered the value of these investments as income of the assessee for the financial years under consideration and added to his income under Section 69 of theIncome Tax Act, 1961. After making the addition, AO framed assessment order. Against the order aggrieved assessee filed appeal before the CIT(A).Who confirmed the addition. Then, the assessee filed second appeal before the tribunal.
Rajesh P. Shah, counsel for the assessee submitted that AO has not preferred to collect the evidence on the basis of consent waiver form” signed by the assessee but proceeded to frame the assessment on the basis of “base note” which is not sustainable in the eyes of law.
Moreover it was observed that consent waiver forms give unconditional consent for providing documents pertaining to the bank accounts in question to the Income Tax Department, Government of India.
Ketaki Desai counsel for the revenue supported the decision of the lower authorities.
The tribunal of Prashant Maharishi (Accountant Member) and Kuldip Singh (Judicial Member) allowed the appeal by considering the following observations;
“when “consent waiver form” has already been signed by the assessee way back on 30.07.2013 the AO is required to get all the original documents pertaining to the bank account in question maintained by the assessee with HSBC Bank, Geneva and then framed the assessment afresh.”
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