GAUTAM SINHA,KHARGHAR vs. CIRCLE, PANVEL, PANVEL

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.40,76,300/- made by the Assessing Officer as unexplained investment u/s 69B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

Facts of the case, in brief, are that the assessee is an individual and filed his return of income for the impugned assessment year on 23.02.2017 declaring total income of Rs.31,12,220/- after claiming deduction of Rs.1,85,243/- under Chapter VI-A. Income of the assessee during the year comprised of salary income and income from other sources. Information was available with the department that the assessee during the financial year 2015-16 has purchased an immovable property from Supertech Builder for a consideration of Rs.40,76,300/-. Since the above investment in immovable property is not commensurate with the income declared by the assessee, the Assessing Officer, after recording reasons, reopened the assessment as per the provisions of section 147 of the Act. Accordingly, notice u/s 148 of the Act dated 29.03.2021 was issued and served on the assessee. However, the assessee did not file any return of income. Subsequently, the Assessing Officer issued notice u/s 142(1) of the Act asking the assessee to file certain details / information regarding the above immovable property during the financial year 2015-16. Despite number of opportunities granted by the Assessing Officer, the assessee neither filed any return of income in response to the notice issued u/s 148 nor filed any details to substantiate the source of investment in the said property. The Assessing Officer, therefore, invoking the provisions of section 144 of the Act completed the assessment and made addition of Rs.40,76,300/- as unexplained investment u/s 69B of the Act.

In appeal the Ld. CIT(A) / NFAC upheld the addition made by the Assessing Officer by observing as under:

Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee referring to the paper book containing 283 pages drew the attention of the Bench to the purchase agreement dated 14.09.2015 for Flat No.904, Tower – I, Supertech EcoCiti, Sector 137, Noida, copy of the allotment letter dated 14.11.2015 issued by Supertech Ltd. towards purchase of Flat No.904, Tower – I, Supertech EcoCiti, Sector 137, Noida, copies of HDFC bank statements of self and the wife for the period 01.04.2015 to 31.03.2016, ITR acknowledgements of self and his wife for assessment year 2016-17, payment details for purchase of the property, housing loan approval letter dated 18.08.2015 from HDFC bank and copy of the loan document obtained from HDFC bank towards purchase of flat. He submitted that non-appearance before the Assessing Officer was due to ill-health of the wife of the assessee Mrs. Deepa Sinha who subsequently expired. He submitted that although the Ld. CIT(A) / NFAC has condoned the delay in filing of the appeal, however, he has not gone through the details properly and sustained the addition made by the Assessing Officer which is not justified. He submitted that the source of the assessee is more than sufficient to invest in the property and therefore, he has no objection if the issue is restored to the file of the Assessing Officer with a direction to verify these details and decide the issue as per fact and law.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that the assessee did not make any submission before the Assessing Officer for which he was constrained to pass the ex-parte order making addition of Rs.40,76,300/- u/s 69B of the Act. He submitted that the Ld. CIT(A) / NFAC has passed the detailed order which should be upheld and the grounds raised by the assessee be dismissed.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-response to the notice issued u/s 148 and the subsequent notice issued u/s 142(1), the Assessing Officer made addition of Rs.40,76,300/- u/s 69B on the ground that the assessee has made investment towards purchase of property from Supertech Builder and the source of the investment of the same remained unexplained. We find the Ld. CIT(A) / NFAC upheld the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the assessee has purchased the property out of loan obtained from HDFC bank as well as savings of self and his wife. He submitted that although the assessee has filed various details before the Ld. CIT(A) / NFAC to substantiate the source of investment, however, he has not appreciated the evidences properly and sustained the addition made by the Assessing Officer. It is also his submission that in the interest of justice the assessee should be given an opportunity to substantiate his case by filing the requisite details to the satisfaction of the Assessing Officer regarding the source of Rs.40,76,300/- towards investment in purchase of the immovable property. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to give one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to make his submissions, if any, on the appointed date without seeking any adjournment under any pretext failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

After hearing both sides, we find the Assessing Officer, in the instant case, levied penalty of Rs.12,59,577/- u/s 271(1)(c) of the Act being 100% of the tax sought to be evaded on the basis of addition made by him u/s 69B towards purchase of immovable property from Supertech Builder. In the preceding paragraphs, while deciding the quantum appeal, we have restored the issue to the file of the Assessing Officer with certain directions. Since the quantum addition, which is the basis for levy of penalty, has been set aside, therefore, the penalty does not survive. Accordingly, the same is deleted. The Assessing Officer is at liberty to initiate fresh penalty proceedings and pass appropriate order after deciding the quantum issue. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.

The concerned Pr.CIT, Pune

DR, ITAT, ‘A’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, ////