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Facts
The assessee's case was reopened based on information about the purchase of an immovable property. The Assessing Officer (AO) completed the assessment ex-parte under Section 144 after the assessee failed to respond to notices. The AO treated the investment as unexplained income. The assessee's appeal before the CIT(A) was dismissed due to a delay in filing. The assessee claims that notices were not served at the correct address and that the delay was due to a misunderstanding of the order receipt date.
Held
The Tribunal held that the assessee had shown sufficient and reasonable cause for filing the appeal belatedly with the CIT(A), as the delay was within 30 days of receiving the assessment order. The delay was condoned, and the order of the CIT(A) was set aside. The Tribunal also found that the assessee had substantiated the source of investment in the property, with the majority sourced from a home loan and past savings.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to delay without considering the assessee's explanation and whether the investment source was adequately substantiated by the assessee.
Sections Cited
147, 144, 69, 234A, 234B, 234C, 148
AI-generated summary — verify with the full judgment below
Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Ld. CIT(A)) dated 24.12.2024 for A.Y. 2011-12. The assessee has raised the following grounds of appeal: “
1. The order passed u/s 147 r.w.s. 144 by the Commissioner of Income Tax Appeal, National Faceless Appeal Centre (CIT(A) NFAC) is illegal, invalid and bad in law;
2. On the facts and circumstances of the case, the Ld. CIT(A) NFAC erred in confirming the addition at Rs. 27,55,595/-is illegal, invalid and bad in law;
3. On the facts and circumstances of the case, the Ld. CIT(A) failed to consider that the Ld. Assessing officer relied on information which do not belong to assessee and without reason to belief, passed order U/s. 147 r.w.s. 144 is illegal, invalid and bad in law;
4. On the facts and circumstances of the case, the Ld. CIT(A) erred in considering date of service of order being received on 04/12/2018 instead of 23/06/2020, therefore order passed by Ld. CIT(A) NFAC is illegal, invalid and bad in law; Amita Dutta 5. On the facts and circumstances the CIT(A) NFAC ought to have accepted that notices were not served to the assessee on updated address which was shown in return of income therefore without providing proper opportunity order passed u/s 144 rws 147 of the Income Tax Act is against the principles of natural justice illegal, invalid and bad in law; 6. On the facts and circumstances of the case, the CIT(A) NFAC erred in not considering the sufficient cause for the delay in filling of appeal and without considering the same, order passed by CIT(A) NFAC is illegal, invalid and bad in law; 7. On the facts and circumstances the CIT(A) NFAC erred in not considering the case on merits and without considering the submissions that the assessec's husband has taken loan of Rs. 44,50,000/- from State Bank of India wherein the assessee being co-owner and remaining amount is invested from her own saving, therefore, order passed is unjustified. unwarranted and excessive; 8. On the facts and circumstances the CIT(A) NFAC ought to have considered the submission of assessee regarding investment in property and its source submitted during the appellate proceedings and without considering the same confirmed addition of Rs. 27,55,600/- as unexplained investment U/s. 69; therefore addition made is unjustified, unwarranted and excessive and in violation of principle of natural justice; 9. On the facts and circumstances the CIT(A) NFAC erred in not accepting documents filed alongwith application U/s. 46A and without going into merits of the case and without considering the submission of the assessee. Therefore order passed is illegal, invalid and bad in law; 10. The assessee is denied the liability of interest charge U/s. 234A, 234B and 234C of the Income Tax act, the same may kindly be deleted 11. The appellant craves leave to amend, add or take a new ground or grounds at the time of hearing;”
The brief facts of the case are that the case of the assessee was reopened on the basis of AIR information that assessee has purchased immovable property of Rs. 52,48,750/- on 14th December 2010 i.e. during F.Y. 2010-11, relevant to A.Y. 2011-12. The Assessing Officer (AO) issued notice u/s. 148 on 31.03.2018. The AO recorded that no return of income was filed in response to notice u/s.
The AO issued various notices as recorded on page 1 of Amita Dutta the assessment order and noted that assessee failed to respond such notices. Since no compliance was made, the AO completed the assessment u/s. 144 and treated the investment in the property as unexplained u/s.
The AO noted that assessee purchased along with the other co-owner, therefore, the share of assessee ½ i.e. 50%. The AO also estimated expenses of stamp duty @ 5% stamp duty, thereby made a total addition of Rs. 27,55,595/-. Aggrieved by the addition in the assessment order the assessee filed appeal before ld. CIT(A) on 21.7.2020. The assessee challenged the action of AO in reopening as well as addition on merit. The AO dismissed the appeal of the assessee as unadmitted by taking view that there was inordinate delay in filing appeal before him. The ld CIT(A) recorded that there is delay of 565 days in filing appeal, which cannot be condoned. The assessee has not shown any sufficient reason for condoning such inordinate delay. Thus, the appeal was also dismissed as unadmitted. Further, aggrieved the assessee has filed present appeal before Tribunal.
I have heard the submission of learned authorized representative (Ld. AR) of the assessee and the learned senior departmental representative (Ld. DR) of the revenue. The Ld. AR of the assessee submits that lower authorities has not given reasonable and sufficient opportunity to the assessee before passing the order. The assessment was completed u/s.
No return of income for A.Y. 2011-12 as the assessee was filed for A.Y. 2011-12 as assessee was not having any taxable income. The assessee also explained that facts notice issued by AO was not received by assessee. The AO issued notice at Noida address at A 702 Swagatam Apartment, C-58/7, Sector-62, Amita Dutta Noida and J-102, Gokul Vihar-II, Thakur Complex, Mumbai-400101. The assessee was not available on the address as the assessee has changed the address at B-104, Raviraj palm, Poonam Garden, Mira Bhayender Road, Mira Road East, Maharashtra-401107. Fresh address of assessee was also mentioned in the subsequent return of income. The AO passed ex-parte assessment order. The assessee purchased the flat from Raviraj Housing in the joint name with her husband for a consideration of Rs. 52,48,750/-. The assessee substantiated the investment in the property. Major part, out of total investment of Rs. 52,48,750/-, Rs. 44,50,000/- was out of home loan avail from State Bank of India and rest of the amount were from past saving of assessee. The assessee and his co-owner incurred Rs. 3,17,525/- on stamp duty and notary charges. The assessee in the statement of fact mentioned in Form-35, clearly stated that certified copy of assessment order was received on 22.06.2020 and appeal was filed on 21.07.2020. Thus, there was no delay, otherwise, it was reasonably explained. The assessee has also substantiated the source of investment. The ld. CIT(A) failed to appreciate of such fact which was duly narrated in Form 35 itself. The ld. AR of the assessee submits that the assessee has filed certified copy of assessment order which clearly bear the date of certified copy issued on 22.06.2020. Before ld. CIT(A) the assessee furnished complete details copy of various screenshot furnishing the complete details of source of investment, all such evidence are already place on record. The Ld. AR of the assessee submits that order of ld. CIT(A) may be set aside and the issue may be decided on the basis of material available on record.
Amita Dutta 4. On the other hand, the ld. DR for the revenue supported the order of lower authorities. The ld. DR for the revenue submits that lower authorities has been ex-parte order. The various evidences submitted by the assessee were not verified by the lower authorities. In case this bench condones the delay in filing before CIT(A), in such circumstances the matter may be restored back to the file of CIT(A) or AO for the verification of various evidence.
I have considered the rival submissions of both the parties and have gone through the lower authorities carefully. I find that assessment was completed u/s. 144 on 04.12.2018. The assessee filed appeal before CIT(A) on 21.07.2020. on perusal of Form 35, I find that assessee in column 11 of Form 35, the assessee clearly stated about the change of address of assessee and changed address was mentioned in the return of income for subsequent assessment year. It was also case of the assessee that she has not received notice u/s. 148 or any other show cause notice. The assessee also stated that appeal before CIT(A) was filed on the basis of certified copy obtained by AO on 22.06.2020. On perusal of assessment order, I find that assessment order is a copy of certified copy, attested by ITO, ward-1(1) Noida, on 22.07.2020. Thus, the assessee has shown sufficient and reasonable cause for filing appeal belatedly. I find that such fact is not considered by CIT(A) though all such facts are narrated in Form-35 in the column of statement of facts. The ld. CIT(A) conveniently ignore such fact. On independent consideration of such fact that the assessee has shown reasonable cause for not filing appeal within 30 days from passing the assessment order, rather the assessee has filed appeal within 30 days from receipt of assessment order.
Amita Dutta Thus, delay in filing appeal before CIT(A) order is condoned and the order of ld CIT(A) is set aside. Now adverting to the adjudication on merit. 6. I find that assessee has raised multiple ground of appeal
, though the ld. CIT(A) confined this submission only on substantial source of investment in flat. I find that in the case of AO is that assessee along with co-owner purchase a property of Rs. 52,48,750/- and he also presumed 5% stamp duty and other expenses there by considered total investment of Rs. 55,11,190/-. Admittedly the assessee is co-owner having 50% share. The case of assessee is that she purchased said property along with her husband. The investment were made from her past saving and majority of investment were sourced from housing loan from State Bank of India. Copy of sanction of housing loan dated 19.12.2020 is available on record. Housing loan was sanctioned in the name of “Falguni s/w/d of Sati Kinkar Dutta and Amita s/w/d of Falguni Dutta, J-102, Gokul Vihar-II, Thakur Complex, Kandivali East, Mumbai-400101, Mob No. 9920956176”. The assessee has also filed copy of bank statement showing expenses of stamp duty of Rs. 3,27,525/- paid through cheque and other payment of Rs. 3.00 lakhs to Raviraj Group and Rs. 2,10,000 and Rs. 6,98,000/- on 13.12.2010. Copy of such bank statement is available at page no.
33. Thus, the assessee has fully explained source of entire investment. I am conscious of facts that such evidence is not verified by AO, hence, the matter is restored back to the AO for limited purpose of verification of source of investment and to pass order afresh in accordance with law. In the result, substantial ground of appeal raised by the assessee is allowed for statistical purpose.