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Facts
The assessee, an individual, did not file her return of income for AY 2016-2017. Based on information about the purchase of an immovable property for Rs. 53,10,000/-, the case was selected for scrutiny. The Assessing Officer issued a notice under section 148, and the assessee filed a return declaring Rs. 10,320/-. Despite statutory notices, the assessee failed to provide substantiating documents, leading the AO to add Rs. 53,10,000/- as unexplained investment.
Held
The Tribunal noted that the CIT(A) had dismissed the appeal for non-prosecution without deciding on merits, which is contrary to Section 250(6). The Tribunal held that the matter requires verification of whether the property was purchased by the husband and the assessee was merely a co-owner for loan facility purposes. Hence, the issue was remitted back to the CIT(A).
Key Issues
Whether the addition of Rs. 53,10,000/- as unexplained investment was justified when the property was purchased in joint names, and the assessee claimed to be a co-owner only for availing a bank loan facilitated by her husband.
Sections Cited
147, 148, 143(2), 142(1), 69, 115BBE, 144B, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI V. DURGA RAO & SHRI KHETTRA MOHAN ROY
ORDER PER V. DURGA RAO, J.M. : This appeal has been filed by the assessee against the order dated 28.10.2024, of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC”], Delhi, relating to assessment year 2016-2017.
2 ITA.No.574/NAG./2024 2. Facts of the case, in brief, are that the assessee is an individual and did not file her return of income for the impugned assessment year 2016-2017. Based on the information in the Insight Portal with the Department, that the assessee has purchased immovable property for Rs.53,10,000/-. Therefore, the the case of the assessee was selected for scrutiny u/sec.147 of the Act, after taking necessary approval from the Competent Authority with respect to purchase of immovable property to the tune of Rs.53,10,000/-. The Assessing Officer issued notice u/sec.148 of the Act on 30.03.2023. In response to the said notice, the assessee filed her return of income on 18.04.2023 declaring income of Rs.10,320/-. Thereafter, the Assessing Officer issued statutory notices u/sec.143(2) and 142(1) of the Act calling the assessee to furnish requisite information. Since the assessee did not file any information or documents to substantiate her claim, except mentioning salary income, the Assessing Officer made the impugned addition of Rs.53,10,000/- as unexplained investment u/sec.69 r.w.s.115BBE of the Act vide order dated 22.03.2024 passed u/sec.147 r.w.s.144B of the Act.
On being aggrieved, the assessee carried the matter in appeal before the learned CIT(A). Despite issuing numerous notices, 3 ITA.No.574/NAG./2024 the assessee did not respond to the same to substantiate her case. The learned CIT(A), therefore, confirmed the addition made in the hands of the assessee u/sec.69 r.w.s.115BBE of the Act.
Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal.
During the course of hearing, Learned Counsel for the Assessee submitted that the assessee derives income from salary and the impugned immovable property in question was purchased in the joint of name of assessee and her husband viz., Mr. Nitin Chandawar. He submitted that the assessee was a co-applicant to the property only for the purpose of availing bank loan facility. He submitted that the bank loan was availed by assessee’s husband and not in the name of assessee. However, the Assessing Officer wrongly considered the investment made in purchase of immovable property as unexplained in the hands of assessee u/sec.69 of the Act which is not correct. He accordingly submitted that the impugned made in the hands of the assessee by the Assessing Officer and sustained by the learned CIT(A) be deleted in the interest of justice.
The Learned DR on the other hand relied on the orders of the authorities below. He submitted that the assessee has only filed 4 ITA.No.574/NAG./2024 her return of income in response to notice issued u/sec.148 of the Act. But, she did not furnish requisite documents or information as called for by the lower authorities, despite providing numerous opportunities by them. Since, the learned CIT(A) has come to the conclusion that the assessee has nothing to say, he sustained the addition made by the Assessing Officer. He accordingly submitted that the order of the learned CIT(A) be confirmed.
We have heard the rival submissions of both the parties, orders of the authorities below and perused the material on record. We find that the learned CIT(A) had dismissed the appeal of the assessee on account of non-prosecution, without deciding the appeal on merits, as contemplated u/sec.250(6) of the Act, according to which, the learned CIT(A) has to decide the appeal on merits even if the assessee did not appear before him. We find that the matter in issue has to be verified and examined with respect to the purchase of immovable property at Rs.53,10,000/- to effect that whether the property in question was purchased by taking loan from the Bank by assessee’s husband wholly and assessee is barely a co-owner for the purpose of availing bank loan facility. Since the matter needs afresh verification and adjudication by the learned CIT(A), in the interest of 5 ITA.No.574/NAG./2024 substantial justice, we remit the issue back to the file of learned CIT(A) with a direction to re-decide the matter in issue, after providing adequate opportunity of being heard to the assessee. Needless to say, it is the risk and responsibility of the assessee to plead and prove her case before the learned CIT(A) with all relevant documents as called for by him in consequential proceedings. We hold and direct accordingly.
In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 04.02.2025.