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Facts
The appeal was filed by the assessee against the order of the CIT(A) for AY 2012-13. The appeal was time-barred by 166 days, which was condoned by the Tribunal. The Assessing Officer (AO) made an ex-parte assessment order under Section 147 without proper service of notice under Section 148.
Held
The Tribunal held that the notice under Section 148 was not served properly, and the assessee could not respond to it. The Tribunal also found that the gift from the grandmother falls within the definition of 'relative' and directed its deletion. The addition on account of jewellery sale was also directed to be deleted. However, the addition on account of sale of furniture was sustained due to lack of evidence.
Key Issues
Whether the ex-parte assessment order is valid without proper service of notice u/s 148? Whether gifts from grandmother and sale of jewellery are to be deleted from additions?
Sections Cited
147, 148, 142(1), 2(14), 2(41)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI
ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 25.02.2025, for Assessment Year 2012-13.
The appeal is time barred by 166 days. The assessee has filed an application supported by an affidavit citing reasons causing delay in filing of appeal. After perusal of the same, I am satisfied that delay in filing of appeal is not intentional, the delay has been caused for the reasons stated in petition which appears to be bonafide. Thus, delay of 166 days in filing of appeal is condoned and appeal is admitted for decision on merits.
Shri Prem Rajpal, appearing on behalf of the assessee submits that the Assessing Officer (AO) has made assessment in the case of assessee for AY 2012-13 u/s.147 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) without serving notice u/s.148 of the Act. He pointed that the notice was issued through email on address not belonging to the assessee. Even, physical notice dated 26.03.2019 was never served on the assessee. Therefore, the assessee could not respond to the notice u/s.148 of the Act or even the subsequent notices. The AO in ex-parte proceedings vide assessment order dated 13.12.2019 made addition of Rs.23,34,196/- which includes addition on account of cash deposits in the bank amounting to Rs.19,00,000/-(Rs.11,00,000/- in SBI Bank and Rs.8,00,000/- in HDFC Bank) and further addition of Rs.4,34,196/- on account of salary and interest income. Aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The assessee explained the source of cash deposits in the bank as under:-
(i) Gift from Grandmother Rs.7,00,000/- (ii) Gift from Sister Rs.7,00,000/- (iii) Sale of Jewellery Rs.2,00,000/- (iv) Sale of old furniture Rs.3,00,000/- Total Rs.19,00,000/- 3.1. In so far as salary income the Counsel submitted that the AO has made addition of salary income twice. The actual salary of the assessee was Rs.2,16,145/- . To substantiate salary income, the assessee placed on record Form No. 26AS at page 27 and 28 of the paper book. The ld. Counsel submits that in First Appellate proceedings, the CIT(A) accepted the gift from sister and thus allowed relief of Rs.7,00,000/-. Further, the CIT(A) recorded the fact that the jewellery is exempt u/s.2(14) of the Act being personal effect but failed to give benefit of same. Hence, the cash received on sale of jewellery of Rs.2,00,000/- is also liable to be deleted.
With regard to the gift from grandmother, he submitted that grandmother falls within the definition of ‘relative’ u/s.2(41) of the Act and assessee being lineal descendant is eligible to get benefit of gift from grandmother. Hence, same should be deleted.
Shri Manoj Kumar, representing the department vehemently supported the impugned order and prayed for dismissing appeal of the assessee.
Both sides heard, orders of the authorities below examined. It is an undisputed fact that the assessee had filed no return of income for AY 2012-13. Notice u/s.148 of the Act was issued to the assessee through email as well as physical copy of notice was also sent to the assessee on 26.03.2019. On perusal of appeal file it is gathered that notice u/s.148 of the Act was sent to the assessee on the same address that is given in Form No. 35 by the assessee. Even, the subsequent notices issued u/s.142(1) of the Act were sent to the assessee on the same address. A perusal of Form 35 shows that before the CIT(A), no ground has been raised challenging validity of the assessment order on the ground of non- service of notice u/s.148 of the Act whereas it should have been first line of objection before appellate authority. Hence, I find no merit on this legal ground raised by the assessee in ground no. 5 of appeal.
No submissions were made by the ld. Counsel for assessee on any other legal issue, hence, ground of appeal no. 1, 2, 4 and 6 to 8 are dismissed.
7. On merits, I find that the AO had made addition of Rs.23,34,196/- out of which Rs.19,00,000/- was on account of unexplained cash deposits in the two bank accounts i.e. Rs.11,00,000/- in SBI Bank and Rs.8,00,000/- HDFC Bank. Further,
(i) Rs.7,00,000 gift from sister /-. The same was accepted by the CIT(A) and addition was deleted.
(ii) Rs.7,00,000/- gift from grandmother. The assessee has furnished declaration from her father endorsing that the assessee had received cash from her grandmother. Since, grandmother of the assessee had expired, the assessee could not adduce any direct evidence. The CIT(A) refused to grant relief with regard to gift from grandmother only for the reason that grandmother doesn’t fall within the definition of relative. The expression ‘relative’ is defined u/s.2(41) of the Act. The same reads as under:-
“relative, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendent or descendant of that individual” A bare perusal of above definition would show that grandmother falls under the definition of relative as a lineal ascendant i.e. in the direct upward line of relationship. Therefore, the reason given by the CIT(A) for rejecting assessee’s submission is contrary to the provisions of Act. Thus, on the basis of documents on record and the provisions of the Act, the assessee’s submissions are accepted, and addition of Rs.7,00,000/- on account of gift from grandmother is directed to be deleted.
(iii) Rs.2,00,000/- from sale of jewellery. The CIT(A) has accepted that jewellery is exempt u/s.2(14) being personal effect. However, while passing the order failed to give direction to delete the same subject to limit
(iv) Rs.3,00,000/- cash is stated to have been deposited from sale of furniture. No documentary evidence has been placed on record by the assessee giving details of furniture sold and the person to whom said furniture has been sold. In the absence of any documentary evidence, that could substantiate assessee’s contention that the assessee had sold the furniture, the addition of Rs.3,00,000/- is sustained.
(v) Salary income- the contention of the assessee is that the salary of the assessee and interest income aggregates to Rs.2,17,098/-. The AO made addition of Rs.4,34,926/- due to CIB duplication, resulting in double addition of the same amount. The actual salary of the assessee is Rs.2,16,145/-. To substantiate salary, income, the assessee has placed reliance on Form No.26AS at pages 27 and 28 of the paper book. For the limited purpose of verification of the salary income, I deem it appropriate to restore it to the AO. The ground of appeal no. 3 is thus partly allowed in the terms aforesaid.
In the result, appeal of the assessee is partly allowed.
Order pronounced in the open court on Wednesday the 14th day of January, 2026.
Sd/- Sd/- (VIKAS AWASTHY) न्यानयक सदस्य/JUDICIAL MEMBER धिल्ली/Delhi, ददिांक/Dated 14/01/2026 NV/- प्रतिलिपि अग्रेपििCopy of the Order forwarded to : अपीलार्थी/The Appellant , 1. प्रनिवादी/ The Respondent. 2. 3. The PCIT/CIT(A) ववभागीय प्रनिनिथि, आय.अपी.अथि., दिल्ली /DR, ITAT, धिल्ली 4. गार्ड फाइल/Guard file. 5.
BY ORDER, //True Copy//
(Asstt. Registrar) ITAT, DELHI