INDERJEET KAUR BHATIA,DELHI vs. ITO WARD 49(1), NEW DELHI
Facts
The assessee, a housewife, was subjected to an addition of Rs. 5,36,00,000/- by the AO as unexplained investment for the alleged purchase of two immovable properties based on AIR information. The assessee contended she had not purchased any property in the relevant year, but only sold one, with capital gain duly disclosed, and the CIT(A) sustained the AO's order. The assessee also claimed the VSVS scheme was applied to a penalty order, not the assessment.
Held
The Tribunal observed that the Assessing Officer had not thoroughly examined the facts, and the CIT(A)'s order was based on mistaken facts. It restored the matter to the Assessing Officer to conduct a fresh inquiry, verify property transactions from the Registrar's office and Form 26AS, and afford the assessee a reasonable opportunity of being heard.
Key Issues
1. Validity of addition for alleged unexplained investment in immovable properties based on AIR information without proper verification. 2. Correct application of the Vivad se Vishwas scheme in the context of assessment versus penalty proceedings.
Sections Cited
Income-tax Act, 1961: 148, Income-tax Act, 1961: 69, Income-tax Act, 1961: 147, Income-tax Act, 1961: 143(b), Income-tax Act, 1961: 144B, Income-tax Act, 1961: 271D, Income-tax Act, 1961: 269SS, Income-tax Act, 1961: 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: MS. MADHUMITA ROY & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the
NFAC, Delhi dated 08.09.2023 pertaining to A.Y. 2017-18.
We have heard the rival submissions and have perused the
relevant material on record.
The sum and substance of the grievance of the assessee is that
the ld. CIT(A) has erred in upholding the order of the Assessing Officer
in making addition of Rs. 5,36,00,000/- on account of purchase of
immovable property and mistaking the application of Vivad se Vishwas
scheme [VSVS] to the assessment proceedings instead of penal
proceedings.
Briefly stated, the facts of the case are that the assessee is a
housewife with income less than the exemption limit specified as per
Income tax. On the basis of AIR information the Assessing Officer came
to know that the assessee has purchased two immovable properties
amounting to Rs. 5,36,00,000/- as follows:
Address of Property Date of Transaction Transaction Amount
Mansarovar Garden, House No. G-16, 04.05.2016 36,00,000/- New Delhi House No. 29, Road No. 62, West 04.05.2016 5,00,00,000/- Punjabi Bagh, New Delhi
The case was opened u/s 148 of the Income-tax Act, 1961 [the
Act, for short] by recording reasons.
In response to notice issued u/s 148 of the Act, the assessee filed
return of income declaring income of Rs. 1,94,220/-. The assessee
submitted before the Assessing Officer that she was suffering for bread
and butter for herself and her family, and could not have purchased
immovable properties of such huge amount.
The Assessing Officer observed that the immovable property
purchased by the assessee was sold subsequently and capital gain was
also disclosed in the return of income. Therefore, the Assessing
Officer made addition of Rs. 5,36,00,000/- as unexplained investment
u/s 69 r.w.s 147 r.w.s 143(b) & 144B of the Act creating a demand of
Rs. 8,48,82,300/-.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who
sustained the order of the Assessing Officer.
Now the assessee is aggrieved further and has come in appeal
before us.
Before us, the ld. counsel for the assessee vehemently stated
that the assessee has not purchased any immovable property in the
instant year and yet the Assessing Officer made the addition on the
basis of AIR information received. The assessee submitted that the
assessee had only sold an immoveable property at Mansarovar Garden,
House No. G-16, New Delhi for a consideration of Rs. 36,00,000/-
during the instant year and the capital gain on the same was also
disclosed in the Income tax Return. It was argued that the Assessing
Officer had not made proper enquiry in respect of the AIR information
as no property was purchased during the year.
The ld. counsel for the assessee further argued that the ld.
CIT(A) has mistakenly passed the order considering that the assessee
has availed the facility of Vivad se Vishwas Scheme for the said
demand raised in the assessment proceedings, whereas the assessee
has not availed any such facility.
It was submitted that the assessee had availed the facility of
VSVS against the order of penalty u/s 271D of the Act in contravention
of section 269SS of the Act for the A.Y 2017-18 which the ld. CIT(A)
mistakenly understood as pertaining to the assessment order u/s 143(3)
of the Act for A.Y 2017-18.
Per contra, the ld. DR fairly conceded that the ld. CIT(A) has
based his order on wrong facts. He contended that the Assessing
Officer had given sufficient time to the assessee which was not availed
by the assessee. On the last date of hearing before the Assessing
Officer, the assessee filed cryptic reply denying the ownership of
property.
We have heard the rival contentions and have perused the
relevant material on record. We are of the considered opinion that the
Assessing Officer has not examined the facts of the case thoroughly
and the ld. CIT(A)’s order is based on mistaken facts. We are of the
considered view that the issue needs to be examined by the Assessing
Officer in respect of purchase of properties vis a vis the AIR
information received. In the interest of justice and fair play, we deem
it fit to restore this issue to the file of the Assessing Officer for
verification as discussed above.
The Assessing Officer is directed to enquire from the Office of
the Registrar and the deed of sale/purchase of the said properties as
well as Form 26AS of the assessee whether the assessee had indeed
purchased these properties. The verification/examination is evidently
necessitated by the JCIT order u/s 271D of the Act for A.Y 2017-18 in
the assessee’s own case who held that the property at Mansarovar
Garden, House No./ G-16. New Delhi was sold and not purchased as
held by the Assessing Officer.
The Assessing Officer is directed to decide the issue afresh after
affording reasonable and adequate opportunity of being heard to the
assessee.
In the result, the appeal of the assessee in ITA No.
2830/DEL/2023 is allowed for statistical purposes.
The order is pronounced in the open court on 06.05.2024.
Sd/- Sd/-
[MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 06th MAY, 2024.
VL/
