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Facts
The assessee did not file a return of income for the A.Y. 2014-15 and appeared in a list of cases with huge financial transactions. Reassessment proceedings were initiated due to a belief that income had escaped assessment, leading to additions for credit card expenses and salary receipts. The CIT(A) confirmed these adjustments.
Held
The Tribunal found a mismatch between Form 16 and 26AS regarding income. It held that the credit card expenses were within the assessee's means, given the high salary. The matter was restored to the Assessing Officer for fresh verification.
Key Issues
Whether reassessment proceedings were validly initiated and whether credit card expenses were indicative of concealed income, considering the assessee's salary.
Sections Cited
147, 234A, 234B, 234C, 271(1)(b), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI CHALLA NAGENDRA PRASAD, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 24.03.2025 pertaining to A.Y. 2014-15.
The assessee has raised the following grounds of appeal:
[A.Y. 2014-15] Ravinder Singh Vs. ITO
“Ground 1: The Ld. CIT(Appeal) erred on the facts and circumstances of the case and in law in making adjustment of 1 INR 1,16,51,280 to the total income of the Appellant without any proper basis and appreciation of the facts and circumstances of the case. Ground 2: The Ld. CIT(A)/AO erred in undertaking reassessment proceedings under section 147 of the Act. Ground 3: Without prejudice, The Ld. CIT(A)/AO failed to 3 undertake the analysis with Form 16 filed by the Companies crediting the salaries to the Appellant Ground 4: Ld. CIT(A)/AO failed to appreciate the fact that the 4 Appellant is a high salary individual and incurring credit card expenses of INR 530,581 is not a concealment of income Ground 5: That on the facts and in law, the present order needs 5 to be discarded and a fresh analysis for computing the taxable income should be considered Ground 6: The Ld. AO erred in charging interest under Section 234A, 234B and 234C. Ground 7: The Ld. AO has erred in law, facts and circumstances 7 in initiating penalty proceedings under Section 271(1)(b) and 271(1)(c). The above grounds of appeal are mutually exclusive of and without prejudice to each another. The appellant craves leave to add, amend, alter and/or withdraw any of the grounds of appeal on or before the hearing of the appeal.
Page 2 of 6 [A.Y. 2014-15] Ravinder Singh Vs. ITO
Brief facts of the case are that as per e-filing portal of the department, the assessee has not filed Return of income for the A.Y. under consideration. The name of the assessee appeared in the list of cases where huge financial transactions were made and the ITR for the relevant period was not furnished by the assessee. Keeping in view the huge financial transactions undertaken by the assessee and having not filed ROI for the relevant period, the reassessment proceedings u/s 147 of the Income-tax Act, 1961 [the Act, for short] was initiated by forming a belief that income has escaped assessment.
Accordingly, the Assessing Officer made an addition of Rs. 5,30,581/- on account of unexplained source of income for credit card expense and Rs. 1,16,51,280/- on account of receipt of salary.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who made adjustment of Rs. 1,16,51,280/- to the total income of the assessee and Rs. 5,30,581/- being credit card expenses.
Now the further aggrieved assessee is in appeal before us.
Before us, the ld. counsel for the assessee vehemently stated that the ld. CIT(A) erred in confirming adjustment of Rs. 1,16,51,280/- to the total income of the assessee whereas the assessee had earned a salary of Page 3 of 6 [A.Y. 2014-15] Ravinder Singh Vs. ITO Rs 96,17,602/- only. It is the say of the ld. counsel for the assessee that the ld. CIT(A)/AO failed to undertake the analysis of Form 16 filed by the company crediting the salaries to the assessee with Form 26AS. The ld. counsel for the assessee continued by saying that the ld. CIT(A)/AO failed to appreciate the fact that the assessee is a highly paid salaried individual and incurring credit card expenses of Rs 5,30,581/- is within the means of the salary drawn by the assessee.
The ld. counsel for the assessee vehemently stated that Part A of Form 16 shows more income and hence the Assessing Officer made the addition. He, therefore, prayed that Part B of Form 16 be examined afresh and TDS deductions may be compared.
Per contra, the ld. DR relied upon the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. We find that there is mismatch in income that is reflected in Form No. 16 and 26AS. In view of the above facts and circumstances and in the interest of justice and fair play, we are of the considered view that the matter be restored back to the file of the Assessing Officer to verify the income as per Form No. 16 and 26AS and Page 4 of 6 [A.Y. 2014-15] Ravinder Singh Vs. ITO decide the issues afresh after allowing adequate opportunity of being heard to the assessee. The assessee is also directed to provide necessary information /documents as required by the authorities and co-operate in adjudication of the issues at hand.
On the issue of card expense, we are of the view that a person earning a salary of Rs 96 lakh a year is well within his means to expend 5 lakh on credit card. Ground 4 is allowed.
In the result, appeal of the assessee in is allowed for statistical purposes.
The order is pronounced in the open court on 18.11.2025.