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Facts
The assessee did not file her Income Tax Return for A.Y. 2018-19. The Assessing Officer, based on information, noted she jointly purchased property with her husband for Rs. 90 lakhs. As no ownership ratio was specified and the assessee failed to provide evidence of her husband's sole contribution, despite claiming nominal co-ownership, the AO added Rs. 45 lakhs as unexplained investment under Section 69, which was confirmed by the CIT(A) ex parte due to the assessee's non-compliance.
Held
The ITAT acknowledged the assessee's argument regarding potential duplication of taxation if the investment was genuinely from her husband's disclosed sources. While noting the non-compliance before the CIT(A) was not condonable, the Tribunal granted the assessee one final opportunity to substantiate her claim. Thus, the CIT(A)'s order was set aside, and the matter was restored to the Assessing Officer for a fresh adjudication, with the assessee directed to furnish all relevant documentary evidence.
Key Issues
Whether the addition of Rs. 45,00,000/- as unexplained investment under Section 69 for a jointly purchased property, claimed to be solely funded by the husband from disclosed sources, is justified in the absence of documentary evidence, warranting a fresh adjudication.
Sections Cited
250, 69, 147, 144, 148A(b), 148A(d), 148, 142(1), 115BBE, 271AAC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: MS.SUCHITRA R. KAMBLE & SHRI MAKARAND V.MAHADEOKARShri Nitin Pathak, AR Shri Umesh Kumar Agrawal, Sr.DR
आदेश आदेश/O R D E R आदेश आदेश
PER MAKARAND V.MAHADEOKAR, AM:
This appeal filed by the assessee is directed against the order passed under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)NFAC”], dated 24.02.2025, confirming the addition of Rs. 45,00,000/- made by the Assessing Officer under section 69 of the Act in the order passed under section 147 r.w.s. 144 dated 28.03.2023.
Facts in Brief
The assessee, an individual, did not file her return of income for A.Y. 2018–19. Based on information received through the Insight Portal under the category “RMS – Non-filing of Return,” the Assessing Officer noted that the assessee had purchased an immovable property during the relevant previous year. A notice under section 148A(b) dated 20.03.2022 was issued to the assessee. However, no reply was filed. Thereafter, the AO passed a speaking order under section 148A(d) dated 31.03.2022, concluding that income had escaped assessment, and issued notice under section 148. Despite service of notice, no return of income was filed. Initially, the assessment proceedings were transferred to the National Faceless Assessment Centre (NFAC), but were subsequently returned to the Jurisdictional Assessing Officer (JAO) due to the assessee's failure to register on the e-filing portal. The JAO then issued notices under section 142(1) on 15.11.2022 and 06.12.2022, and a show cause notice dated 10.01.2023. In response, the assessee submitted that the property in question was purchased jointly with her husband, Shri Manish Kumar, and the entire investment was made by him from his income and savings. The assessee claimed she was merely a nominal co-owner. The AO, however, observed that the assessee failed to furnish documentary evidence to substantiate the above claim. In particular, the assessee did not submit a copy of the registered purchase deed, the bank account statements of the assessee and her husband, loan sanction letter or repayment schedule and proof of source of funds or stamp duty payment, etc. On verification of the sale deed (Document No. 109/2018 dated 02.01.2018), the AO found that the assessee and her husband were co-purchasers of a property valued at Rs.90,00,000/-. Since the deed did not specify the ratio of ownership, the AO presumed equal contribution and treated Rs.45,00,000/- as assessee’s share. In the absence of books of account and supporting explanation, the AO invoked section 69 of the Act, holding that the investment of Rs.45,00,000/- was unexplained, and taxed the same under section 115BBE. Penalty proceedings under section 271AAC were also initiated.
The assessee preferred an appeal before the CIT(A), NFAC, contending that the entire investment in the property was made by her husband from disclosed sources and the addition in her hands would amount to duplication. However, despite multiple notices issued by the CIT(A), NFAC on 28.01.2025, 05.02.2025, and 12.02.2025, the assessee did not file any submission or documentary evidence. The CIT(A) observed that the assessee was not interested in pursuing the appeal and relied on various judicial precedents discussing the maxim vigilantibus et non dormientibus jura subveniunt. The appeal was dismissed ex parte, and the addition of Rs.45,00,000/- was confirmed.
Aggrieved by the order of CIT(A),NFAC, the assessee filed an appeal before us raising following solitary ground –
Learned AO addition made on assumption basis that immovable property brought was in my name But actual fact of case is the said property was in joint name and my share of payment was zero and this property is out of my husband income or accumulated savings.
Learned Authorised Representative (AR) submitted that the assessee’s name was included in the property document as a matter of convenience, and she had not made any financial contribution. The entire investment had been sourced from the bank loan and savings of her husband, who had disclosed the same in his return of income. The addition made under section 69 was unjustified as there was no material to suggest that the assessee had made any unexplained investment. The AR submitted that non-compliance before the CIT(A) was unintentional and occurred due to lack of proper guidance and technical inability.
Learned Departmental Representative (DR) supported the orders of the lower authorities. He submitted that the assessee had failed to discharge the onus cast upon her under section 69. No documentary evidence had been submitted either before the AO or before the CIT(A), and hence, the addition was rightly made. However, the DR raised no objection in restoring the matter back to the file of AO for verification of documents placed on records by the assessee before us.
We have carefully considered the orders of the lower authorities and rival submissions. The limited issue for adjudication is whether the addition of Rs.45,00,000/- made under section 69 of the Act on account of alleged unexplained investment in property purchased jointly with the assessee’s husband is justified in the facts of the case.
The purchase deed dated 02.01.2018 evidences that the property was purchased jointly by the assessee and her husband. The AO presumed equal ownership in the absence of specific allocation and made addition under section 69 in the hands of the assessee. The assessee’s claim that the entire investment was from her husband’s disclosed sources is a factual plea which ought to have been substantiated through documentary evidence. We note that the assessee did respond to the AO’s show cause and claimed the investment was entirely financed by her husband. However, in the absence of bank statements, loan documents, or property deed, the explanation was not accepted. Before the CIT(A), the assessee failed to appear despite multiple notices. While such non-compliance is not condonable, it would not preclude the assessee from seeking decision on merits where prima facie duplication of addition is alleged.
In our considered view, the assessee deserves one final opportunity to substantiate her claim that the investment was made solely by her husband and duly disclosed in his return of income. The assessee has raised a serious contention that may result in duplication of taxation, and justice would be served by enabling her to produce necessary evidences to support her claim. Accordingly, in the interest of justice, we deem it fit to set aside the order of the CIT(A) and restore the matter to his file for de novo adjudication. The assessee is directed to cooperate and furnish all relevant documentary evidence in support of her claim including Copy of the sale deed, Bank statement of her husband, Housing loan documents, Proof of ownership disclosure in husband’s ITR and Any other supporting evidence.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 25th July, 2025 at Ahmedabad.