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Facts
The assessee, residing abroad, allegedly purchased an immovable property with funds from her husband. The Assessing Officer (AO) made an addition of Rs. 21,95,278 on account of unexplained investment, as the assessee failed to provide sufficient evidence. The CIT(A) confirmed the addition.
Held
The Tribunal condoned the delay in filing the appeal. It directed the AO to re-examine the documents submitted by the assessee regarding the payments and to verify the husband's bank account. The AO was instructed to decide the issue afresh after gathering necessary information.
Key Issues
Whether the addition made by the AO on account of unexplained investment in property is justified without proper verification of evidence, and whether the assessee was given adequate opportunity to present her case.
Sections Cited
147, 144, 144B, 148A, 149(1)(b), 148, 144, 69, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Ms. Rebecca Morris (the assessee/appellant) for the assessment year 2016-17 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 21.3.2025 wherein the appeal filed by the assessee against the assessment order passed u/s. 147 r.w.s. 144 r.ws. 144B of the Income- tax Act, 1961 [the Act] dated 12.2.2024 by the National Faceless
Assessment Centre was dismissed confirming the addition of Rs.21,95,278.
2. Therefore assessee is in appeal raising the following grounds:-
“1. The impugned Order passed by the learned officer is illegal, arbitrary and opposed to law and facts of the case.
On the facts and circumstances of the case the learned officer has not given a proper opportunity to the appellant to personally meet and explain the case by issuing summons and making enquiries. Notices issued by the department are not served on the assessee and even the SCN were not served on the assessee. She lives abroad and there is no body present at the registered address as it related to her in-laws and they are not staying in the address. The appellant had given her Bangalore address to correspond and the notices were not served on this address also. Even assessment order was not served on her. Appellant's mother came across the order and has informed the appellant and consequently this appeal is being filed.
The learned officer has made a huge addition of Rs. 2195278/- and raised the demand of Rs. 1424372/-. This addition is considered by the officer on the ground that there is no proper explanation, documentation and evidence to a part of the payments made towards the purchase of the property jointly with her husband.
4. The appellant has invested an amount of Rs. 9572568/- in a flat at Bangalore jointly with her husband Mr John Bosco Morris. All the amounts are invested by her husband. And out of the above investment department has accepted investment leaving Rs. 2195278/-representing the following payments Payment of Rs. 500000/- on 5-1-2016, Rs. 708955/- on 21-9-2016, Rs. 900000/- on 21-9-2016 and TDS amount of Rs. 86323/- dt 20-2-2106, totalling to Rs. 2195278/-. The documents in support of the above payments are already furnished to the department.
5. In view of the non verification of the information and explanations the department has brought to tax an amount of RS.2195278/-.
In the circumstances it is requested that the proof of payment already enclosed may please be examined, considered and the addition to the income be deleted. An opportunity may please be granted to the appellant by remanding the case back to the assessing officer for examining the proof and evidence of the payments which are brought to tax and delete the addition and reduce the demand to Nil.
7. The noncompliance of the appellant to the notices is not wilful as she is living abroad and verification of her PAN account by logging into the website of the income tax department was not required in her case as she has no taxable income in India. The appellant hereby requests that in view of the grounds hereinabove mentioned as also of those that may be urged at the time of hearing the Hon'ble ITAT may be pleased to quash and set aside the order impugned herein. The appellant craves leave to add to, delete, modify or amend any of the grounds herein mentioned at the time of hearing.” 3. The brief facts of the case are that according to the Risk Management Strategy Insight Portal show that assessee has purchased immovable property of Rs.86,33,250 and assessee has not filed return of income for the impugned assessment year. Accordingly notice u/s. 148A r.w.s. 149(1)(b) of the Act was issued and a show cause notice was also issued on 18.3.2023, however assessee did not submit any response. Therefore, the case of the assessee was reopened by issue of notice u/s. 148 of the Act on 30.3.2023. The AO also issued show cause notice for making the assessment u/s. 144 of the Act on 7.2.2024 which was also not replied.
The assessee submitted a part reply with a copy of purchase deed of the property and bank statement with SBI. The ld. AO noted the fact that assessee has purchased the immovable property at Senorita Apartment, Sarjapur for a consideration of Rs. 94,86,235. The market value of the property was Rs.86,33,250. The assessee submitted that investment was made by her husband, John Bosco Morris from his bank account with SBI, Bangalore. The details of the bank a/c was also given. It was further stated that the amounts are invested out of the proceeds from closure of fixed deposits made by him out of his salary savings.
The ld. AO noted that assessee has not submitted the proof of payment of Rs.5 lakhs on 5.1.2016, Rs.7,08,955 on 21.9.2016 and Rs.9 lakhs on 21.9.2016. Accordingly he held that assessee has furnished only part details, therefore in absence of support of evidence for payment of Rs.21,95,278, he passed assessment order making the above addition by invoking the provisions of section 69 of the Act determining total income of Rs.21,95,278.
6. The assessee challenged the same before the ld. CIT(A). In the Statement of Facts assessee submitted that she is a Science Graduate and was working in Singapore & Delta Airlines. She is married to John Bosco Morris and now settled in Singapore. It was stated that all the amounts invested in the house property belonged to her husband, John Bosco Morris. The ld. CIT(A) issued several notices but no response was received. In view of this, due to continuous non-
compliance, he disposed of the appeal ex parte on merits confirming the above addition.
The assessee is aggrieved and in appeal before us.
Even in the appeal before me, no appearance was made and therefore the appeal is disposed of on the merits of the case.
The brief facts show that assessee has invested a sum of Rs.95,72,568 in a flat at Bangalore jointly with her husband, John Bosco Morris. The full amount is stated to be invested by her husband. The ld. AO found that a sum of Rs.21,95,278 was invested comprising Rs.5 lakhs on 5.1.2016, Rs.7,08,955 on 21.9.2016 and Rs.9 lakhs on 21.9.2016. No documentary evidence are available, therefore addition was made. Before the ld. CIT(A), the assessee has stated that complete documents in support of above payments are given which may be examined, but the ld. CIT(A) confirmed the addition.
On appeal before me, there is a delay of 55 days in filing of appeal for which assessee has submitted condonation petition stating that she is residing in Singapore and the assessment order, assessment notices, the order of the ld. CIT(A) were all not received by her. She is living abroad and nobody is present at the registered address. The address also belongs to her in-laws and they are also not staying at that address. She does not have any income in India and she has also not visited India. She has given the address of her mother who fell down and had fracture during her visit to Kerala, hence there was nobody to take care of the same. This resulted into delay in filing of the appeal.
After hearing the ld. DR, I condone the delay and admit the appeal.
I find that assessee says that she has already furnished the documents which was also before the ld. CIT(A). Therefore, in view of the above facts, I direct the ld. AO to examine those documents in support of the above payments. She has also given information about the bank a/c. of her husband with SBI, Bangalore. The ld. AO may also obtain information by issuing notice u/s. 133(6) of the Act to SBI and obtain statement of the bank a/c of the husband of the assessee and verify the information along with supporting documents submitted. In case if the AO still feels about the adequacy of the information, the assessee has given her address as AVON 46123, INDIANA -USA in the application before me and email id as johnbeck71@hotmail.com . In view of the above facts, in case of doubt, the ld. AO may issue notice to the assessee and decide the issue afresh in accordance with law.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 30th day of September, 2025.