PRAJAKTA PRAKASH MESTRY,MUMBAI vs. INCOME TAX OFFICER, 41(1)(3), MUMBAI, MUMBAI

The dispute in the present appeal is confined to addition of an amount of Rs.82,95,000/- under Section (u/s.) 69 read with section 115BBE of the Income Tax Act, 1961 (in short ‘the Act’).

Briefly stated, the assessee is a resident individual. The assessee is stated to be a housewife having no source of income, hence did not file any return of income for the assessment year under dispute. However, based on information available as per Risk Management Strategy (RSM) of the Central Board of Direct Taxes (CBDT), the Assessing Officer found that in the previous year relevant to the assessment year under dispute, the assessee had purchased immovable property for a consideration of Rs.82,95,000/-. Based on such information, the Assessing Officer formed belief that income assessable to tax has escaped income. Accordingly, he reopened the assessment under section 147 of the Act by issuing notice under Section 148 of the Act on 28.3.2023.

Alleging that the assessee did not comply with various notices issued, the Assessing Officer proceeded to complete the assessment to the best of his judgment under Section 144 read with section 147 of the Act. While doing so, he added back an amount of Rs.82,95,000/- as unexplained investment under Section 69 of the Act.

Assessee contested the addition by filing an appeal before learned First Appellate Authority. Even, the First Appellate Authority, alleging that the assessee did not comply with notice of hearing, ultimately dismissed the appeal.

We have heard the parties and perused the materials on record. It is the say of the assessee before us that the property in question, being an under construction flat, was jointly purchased by assessee alongwith her husband. It is further submitted that the assessee being a housewife has not invested any amount. According to the assessee, entire investment was by her husband, that too by availing loan from bank/financial institution.

As could be seen from the orders of the Departmental Authorities, the entire investment in the house property has been added back at the hands of the assessee, though the property stands in joint names. In course of hearing, learned counsel for the assessee has submitted that the investment has been disclosed by the assessee's husband in the return of income filed by him. It is a fact that assessee remained unrepresented before Assessing Officer as also learned First Appellate Authority. Therefore, the factual aspects relating to the issue, such as, property being held as joint property and investment made is out of loan, could not be examined due to non-representation of the assessee. Thus, in the interest of justice, we are inclined to set aside the impugned order of learned First Appellate Authority and restore the issue relating to addition made to the Assessing Officer for de novo adjudication after providing due and reasonable opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.