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Facts
The assessee did not file a return of income. Information was received regarding the sale of immovable property and salary income. Proceedings under section 147/148A were initiated. The AO added unexplained investment of Rs.30,85,520/-, income under section 56(2)(vii) of Rs.12,73,000/-, and salary income of Rs.2,03,801/-.
Held
The Tribunal held that the assessee deserves one more opportunity to present her case. The file was restored to the AO with directions to provide an opportunity to the assessee to present her case and necessary evidences.
Key Issues
Whether the appeal dismissed in limine by the NFAC due to delay should be restored for fresh adjudication on merits. Whether the additions made by the AO on account of unexplained investment, income from other sources, and salary income are justified.
Sections Cited
147, 148A, 148, 133(6), 2(14), 56(2)(vii), 69, 80C, 144, 271(1)(b), 271F
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Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2015-16 Shashi Kannaujiya v. Income Tax Officer 2(2) D/o Ashok Kannaujiya Bareilly Mohalla Para, Faridpur Bareilly TAN/PAN:CCOPK6865K (Appellant) (Respondent) Appellant by: Shri Samrat Chandra, C.A. Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 09 01 2025 Date of pronouncement: 23 01 2025 O R D E R This appeal has been preferred by the Assessee against the order dated 21.08.2024, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2015-16.
The brief facts of the case are that the assessee did not file the return of income for the year under consideration. The Income Tax Department received information on its Insight Portal under the head “NMS” that the assessee had sold immovable property for a consideration of Rs.93,40,000/- and earned a salary income of Rs.36,320/- from Bandobast Adhikari Chakbandi, Pilibhit in the year under consideration. Accordingly, proceedings were initiated under section 147/148A of the Income Tax Act, 1961 (hereinafter called “the Act’) and notice under section 148 of the Act was issued to the assessee, requiring the assessee to file her return of income. Although the assessee did not any return of income in compliance to notice under section 148 of the Act, the assessee stated before the Assessing Officer (AO), vide letter dated 12.01.2023 that the alleged sale of property for Rs.93,40,000/- was not made by her. However, from the perusal of the title deed, the AO noticed that the property was sold by Smt. Neeta Singh w/o Dr. Prakash Singh, Civil Lines, Bareilly for a consideration of Rs.90,00,000/- (C.V. Rs.93,40,000/-) to Smt. Ruchi Rastogi, Bareilly. In this regard, the AO issued notice under section 133(6) of the Act to the Sub-Registrar-1, Bareilly for providing the requisite title deed of the immovable property registered in the name of the assessee. In response to which, the sub-Registrar, Bareilly had provided a title deed registerd on 28.09.2014 at Bahi No.1, Jild No.6773 Page No 137 to 188 and Sl. No.12006, from which it was noticed that Smt. Shashi Kannaujia w/o Shri Anil Sagar, R/o Mohalla Para, Ward No.2, Jatwan Mandir, Tehsil Faridpur had purchased a residential house at Nawada Jogiyan, Bareilly from Shri Harish Kumar, Bareilly on 28.09.2014 for a consideration of Rs.28,00,000/- (Circle Value of Rs.40,73,000/-). The Sub- Registrar, Bareilly had also stated that no deed was found registered in his office for Rs.93,40,000/- in the name of the assessee, Smt. Shashi Kannaujia. After considering the reply of the assessee as well as the Sub-Registrar, Bareilly, the AO observed that the assessee had filed a factually incorrect reply so far as purchase of immovable property at Rs.40,73,000/- was concerned and that the assessee had infact purchased the property for a consideration of Rs.28,00,000/- and had further spent Rs.2,75,500/- as Stamp Duty and Rs.10,020/- as Registration Fee. Accordingly, he computed the total investment at Rs.30,85,520/-. According to the AO, since the assessee was not able to substantiate the source of investment in the immovable property, he treated the same as unexplained investment of the assessee and added Rs.30,85,520/- to the income of the assessee under section 69 of the Act.
2.1 The AO further noticed that the property purchased by the assessee was a Capital Asset within the meaning of section 2(14) of the Act and that the Stamp Duty Value exceeded the actual consideration by Rs.12,73,000/- (Rs.40,73,000 – Rs.28,00,000). The AO, therefore, held that as per clause (vii) of sub-section (2) of section 56 of the Act, the excess amount was chargeable to income tax under the head “Income from Other Sources”. The AO, accordingly, added Rs.12,73,000/- to the income of the assessee under section 56 of the Act.
2.2 The AO also noticed from Form 16 that the assessee had received salary to the tune of Rs.2,25,891/- from Government Officer Consolidation, Bareilly and the total income was shown at Rs.2,03,801/- after allowing deduction under section 80C of the Act. The AO also added the amount of Rs.2,03,801/- to the income of the assessee.
2.3 Accordingly, the AO completed the assessment under section 147 read with 144 of the Act, assessing the total income of the assessee at Rs.45,62,321/-.
2.4 The AO also initiated penalty proceedings under section 271(1)(b), 271(1)(b) and 271F of the Act, separately.
Aggrieved, the Assessee preferred an appeal before the NFAC, who dismissed the appeal of the assessee for the reason of delay of 133 days in filing of the appeal before the NFAC.
Now, the assessee has approached this Tribunal challenging the dismissal of her appeal by the NFAC by raising the following grounds of appeal:
1. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law and deserves to be quashed being illegal.
2. Because, on the facts and in the circumstances of the case, the order of Ld. CIT is bad in law sustaining the additions totaling to Rs.45,62,321/- even when no addition have been in respect of items of sale of immovable property on the basis of which the re-, assessment proceedings were initiated thus not following the law laid down by Bombay High Court in Commissioner of Income- Tax vs. Jet Airways (1) Ltd., (2011) 331 ITR 236.
3. Because on the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in law and in facts in confirming an adding of Rs.30,85,520/- made by AO in para 5 of Assessment Order under section 69 of the Income Tax Act, 1961 being unexplained investments income from other sources,
4. Because on the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in law and in facts in confirming an adding of Rs.12,73,000/- made by AO under section 56(2) (vii) of the Income Tax Act, 1961 being income from other sources.
5. Because on the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in, law and in facts in confirming an adding of Rs.2,03,801/- made by AO is bad in law on account of salary income which was below the taxable limit.
6. Because, on the facts and in the circumstances of the case, the order of Ld. CIT is bad in law as the Assessing Officer has been added the addition without considering the reply of the assessee therefore the order deserves to be set aside and quashed.
7. Because, on the facts and in the circumstances of the case, the CIT (A) has passed the order without condoning the delay in filing of appeal and without providing the assessee with a due and proper opportunity of hearing therefore the impugned order deserves to be set-aside being bad in law.
8. The appellant craves for leave to add, modify, amend or delete any other and further grounds of appeal with permission.
During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there was a delay of 133 days in filing the appeal before the NFAC and that the appeal of the assessee was dismissed inlimine by the NFAC, without dealing with the issue raised before him on merits. He prayed that the appeal may be restored to the Office of the AO, as the AO would be in a better position to examine the various evidences which the assessee would like to bring on record with regard to the transactions entered into by the assessee.
The Ld. Sr. D.R. had no objection to the restoration of appeal to the Office of the AO, as requested by the ld. A.R.
I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one more opportunity to present her case and, therefore, in the interest of substantial justice, I restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present her case along with necessary evidences. I also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 23/01/2025.