DEEPA VITHOB DESAI,BANGALORE vs. ITO, INTL. TAXATION, WARD-1(1), BENGALURU

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ITITA 32/BANG/2025Status: DisposedITAT Bangalore22 May 2025AY 2016-1711 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal admitted the additional evidence filed by the assessee. It reasoned that Rule 29 of the IT Rules, 1963, allows for the admission of additional evidence if the Tribunal requires it for passing orders, for substantial cause, or if the lower authorities failed to provide sufficient opportunity. The Tribunal found that the assessee could not represent her case or produce documents before the AO, and the DRP refused to consider additional evidence submitted late. Therefore, there were good and sufficient reasons to admit the evidence. However, since the AO and DRP had not examined these additional documents, the Tribunal, in the interest of justice and fair play, remitted the entire issue in dispute back to the file of the AO for de-novo consideration. The AO was directed to consider all additional evidence and decide the matter in accordance with the law, granting the assessee a reasonable opportunity of being heard. The assessee was also directed to produce further documents as required by the AO. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Deepa Vithob Desai, an Australian citizen and non-resident of India, is in appeal against an order passed by the Income Tax Officer (ITO), Ward-1(1), Bangalore, under section 144 read with section 144C(13) of the Income Tax Act, 1961, for Assessment Year 2016-17. The assessment was completed ex-parte as the assessee remained non-responsive to notices. The ITO noted that the assessee had paid Rs. 55,29,100/- for an immovable property and had not filed a return of income. Consequently, the investment was treated as income under section 69 and taxed under section 115BBE. The Dispute Resolution Panel (DRP) had dismissed the assessee's objections for not producing evidence and refused to consider additional evidence submitted late. The assessee sought to produce additional documents before the Tribunal.

What were the issues?

1. Whether the Tribunal should admit additional evidence (documentary) submitted by the assessee, considering the assessee's inability to present evidence before the lower authorities and the DRP's refusal to consider it? Assessee's Contention: The assessee argued that she is a non-resident, working as a doctor in Sydney, with no Indian income sources. She claimed the property purchase was funded by her bank account and contributions from her father, mother, brother, and Mr. Shanta Babu (in lieu of a loan repayment). The DRP dismissed objections due to lack of evidence and refused additional evidence submitted close to the disposal deadline. The assessee contended that the additional documents are essential for adjudication and their exclusion would cause irreparable loss. Reliance was placed on Rule 29 of the IT Rules, 1963, and the Tribunal's role as a fact-finding authority. Revenue's Contention: The Revenue's representative supported the order of the ITO/DRP.

Which sections of the Income-tax Act were involved?

Section 144,Section 144C(13),Section 147,Section 148,Section 69,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE

Before: SHRI LAXMI PRASAD SAHU & SHRI KESHAV DUBEY

For Respondent: Ms. Neera Malhotra, D.R
Hearing: 25.02.2025Pronounced: 22.05.2025

Heard together (2 matters)

ITA No.32/Bang/2025
SP No.9/Bang/2025

Read from the judgment's own cause title. This page is filed under one of them.

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. Income Tax Officer, Ward-Intl.Taxation1(1), BLR dated 14.11.2024 vide DIN & Order No. ITBA/AST/S/144/2024-

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 2 of 11 25/1070353389(1) passed u/s 144 r.w.s. 144C(13) of the Income Tax Act, 1961 (in short “The Act”) for the AY 2016-17.

2.

The assessee has raised the following grounds of appeal: I. Non - Filing of Returns for the AY 2016 - 2017. 1. The Assessee is a citizen of Australia and a non-resident of India and she has been working as a medical doctor in Sydney and she did not have any income sources in India during that relevant period of time. Il. Dismissal Of Proceedings Before the Dispute Resolution Panel 2. The DRP — 2 has dismissed the grounds of objections only on the basis that the Assessee has not produced any evidence in support of her contention.

3.

The DRP — 2 has further refused to consider additional evidence on the grounds that the Assessee sought permission to produce the additional evidence only on 18.10.2024 with 2 weeks left to dispose the case.

III. Source of income for the purchase of the Immovable Property 4. The sale deed dated 05.11.2015 bearing registration No. GNR1-03133- 2015-16 in CD No. GNRDI 12 mentions the consideration paid by the respective cheques along with the respective dates and Bank. 5. The Assessee has paid certain sums of money through her own bank account, the remaining with the help of her father Mr. Desai Vithoba Bomma, mother Ms Heera Vithoba Desai, brother Mr. Pradeep Vithoba Desai and one Mr. Shanta Babu who paid a sum of Rs 10,00,000/- through the Union Bank of India in lieu of repayment of loan owed to the Assessee's father. 6. The Assessee is seeking to produce additional documents in support of her claim in the preceding paragraphs by way of a separate application.

3.

Brief facts are that the case of the assessee was reopened u/s 147 of the Act and accordingly a notice u/s 148 of the Act was issued on 30.3.2023. The assessee during the entire assessment proceedings remained non-responsive and had not submitted any reply to the notices issued. The AO observed that in the instant

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 3 of 11 case a specific information was disseminated through the insight portal in accordance with the risk management strategy (RMS) formulated by the CBDT and as per the information available, the assessee had paid Rs.55,29,100/- towards consideration for purchase of immovable property. Since there has been no response to the notices issued, the AO concluded the assessment u/s 144 of the Act based on the material available on record. As the assessee had made investment towards the purchase of immovable property amounting to Rs.55,29,100/- and the assessee had also not filed the return of income for the period under consideration, and hence the AO was of the view that the investment made cannot be telescoped or considered to be out of any income so declared. Further, the AO held that as the assessee offered no explanation regarding the source of investment made amounting to Rs.55,29,100/-, the entire value of investments made in purchase of immovable property had been treated as income under the ambit of provisions of section 69 of the Act & brought to tax u/s 115BBE of the Act.

4.

Aggrieved by the assessment completed u/s 144 r.w.s. 144C(13) of the Act dated 14.11.2024, the assessee has filed the present appeal before this Tribunal. The assessee has also filed the paper book containing therein the various letters, notices, show cause notices as well as e-mails issued by the GPA holder of the assessee along with the application under Rule 29 of the I.T. Rules, 1963 for allowing the additional evidence produced before us.

5.

Before us, ld. A.R. of the assessee on merits, vehemently submitted that the assessee is a citizen of Australia and a non- resident of India. Further she has been working as a medical doctor in Sydney. The assessee did not have any sources of income in India during the relevant assessment year. The assessee had paid

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 4 of 11 certain sum of money through her bank account and remaining with the help of her father, mother as well as brother and one Mr. Shanta Babu for the purchase of immovable property as per the sale deed dated 5.11.2015. Further, ld. A.R. of the assessee vehemently submitted that the DRP-2 has dismissed the grounds of objection only on the basis that assessee has not produced any evidence in support of her contention. In fact, the DRP-2 has refused to consider the additional evidence on the grounds that the assessee sought permission to produce the additional evidence on 18.10.2024 with two weeks left to dispose the case.

6.

The ld. DR on the other hand supported the order of the ld. ITO (Intl. Taxation)/DRP.

7.

Before proceeding further on the merits of the case, we deem it fit to first consider the issue of additional evidences filed before us. The assessee has filed an application praying to allow the additional evidences along with an affidavit as follows under Rule 29 of the I.T. Rules-

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 5 of 11

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 6 of 11

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 7 of 11

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 8 of 11

8.

The ld. A.R. submitted that during the assessment proceedings, the assessee could not represent her case. The assessee also could not produce the documents before the AO during the assessment proceedings since they were old & required time to collate. Further, ld. DRP-2 refused to consider the additional evidence on the grounds that the assessee sought permission to produce the additional evidence only on 18.10.2024 with 2 weeks left to dispose the case. In view of this, the AR submitted that the Tribunal being the ultimate fact finding authority, it is a fit case to allow the application of the assessee and the additional evidences may be admitted for adjudication. Further, ld. A.R. submitted that the documents filed along with the accompanying application are essential for adjudication of the issues in the present appeal. He

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 9 of 11 submitted that if the assessee is not allowed to produce the documents specified in the accompanying application as additional evidence, it will put to irreparable loss and injury. On the other hand, no loss or hardship will be caused to the respondent if this application is allowed. The ld. A.R. of the assessee therefore, most respectfully prayed that this Tribunal may be pleased to allow the accompanying application and allow the assessee to produce the document specified in the accompanying application as additional evidence on her behalf in the interest of justice and equity.

9.

The ld. D.R. on the other hand strongly opposed the admission of additional evidence at this stage.

10.

We have heard the rival submissions and perused the materials available on record. Accordingly to the Rule 29 of the I.T. Rules, 1963 generally the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal but if the Tribunal requires any document to be produced to enable it to pass orders or for any other substantial cause or if the income tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal for reasons to be recorded, may allow such document to be produced or may allow such evidence to be adduced. In the present case, it is undisputed fact that assessee could neither represent her case before the AO nor produced any documents/record/statement to refute the allegation. The AO has passed an ex-party order u/s 144 of the Act based on the material available on record. Further, before us the ld. A.R. of the assessee vehemently submitted that even the DRP-2 has refused to consider the additional evidence on the ground that assessee sought permission to produce the additional evidence only on 18.10.2024 with two weeks left to

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 10 of 11 dispose the case. This being so, we find good and sufficient reason in not submitting this additional evidence before the lower authorities. Accordingly, we admit these additional evidences as these are essential for adjudication of the issues in the present appeal. After admitting the same, in our opinion, these additional evidences are filed for the first time before the Tribunal and the ld. AO as well as DRP have no occasion to examine these additional evidences. Being so, in the interest of justice and fair play, we remit the entire issue in dispute to the file of the AO for de-novo consideration. The AO shall consider all these additional evidences produced before us and decide the same in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce such further documents/submission as may be required by the AO for the adjudication. It is ordered accordingly.

11.

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

SP No.9/Bang/2025:

12.

The assessee has also filed stay petition seeking direction to the AO to keep the outstanding demand of Rs.51,93,628/- raised for the Assessment year 2016-17 in abeyance till the disposal of appeal. Since we have remitted the entire issues in dispute to the file of the AO for de-novo consideration & therefore at this stage there is no need to adjudicate the stay application as it becomes infructuous.

ITA No.32/Bang/2025 & SP No.9/Bang/2025 Deepa Vithob Desai, Bangalore Page 11 of 11 13. In the result, stay petition filed by the assessee is dismissed as infructuous. Order pronounced in the open court on 22nd May, 2025

Sd/- Sd/- (Laxmi Prasad Sahu) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 22nd May, 2025. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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