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2025 Supreme(Online)(ITAT) 3547
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Shri Pawan Singh, J, Shri Prabhash Shankar, ACJ
Mrs. Roma Prakash Chhugani – Appellant
Versus
Income Tax Officer 24(3)(4) – Respondent
ITA No. 2805/MUM/2025(AY: 2011–12)
For the Appellants/Petitioners: Shri. Jagdish Shetty, CA
For the Respondents: Shri. Annavaram Kosuri, Sr. DR
The Tribunal ruled that the Assessing Officer must verify evidence when the assessee was not provided a fair opportunity during the assessment process, especially in ex-parte cases.
Headnote:(A) Income Tax Act, 1961 - Section 69C and Section 147 - Assessment reopened due to non-filing of income tax return and alleged undisclosed income from property purchase - Addition of Rs. 1,36,77,000/- upheld by CIT(A) - Assessee claimed investment was made by son and substantiated source of funds through bank statements and loan details - CIT(A) rejected additional evidence for non-compliance with Rule 46A - Tribunal found that due process was not followed and evidence was crucial for substantiating investment source - Tribunal allowed the appeal. (Paras 1-11)
(B) Procedure - Opportunity to be provided to the assessee during assessment proceedings - Ex-parte orders require careful scrutiny and reassessment of evidence presented post-filing appeal. (Paras 6-10)
Facts of the case:
The assessee, a housewife, faced an ex-parte assessment due to change of address and non-receipt of notices. The AO made significant additions based on alleged undisclosed income from a property purchase, which was claimed to be funded by her son.
Findings of Court:
The Tribunal held that the AO failed to consider the evidence provided by the assessee, including bank statements and loan documentation, which substantiated the source of the investment.
Issues: The primary issues were whether the AO properly assessed the evidence presented by the assessee and whether the additional evidence submitted was admissible.
Ratio Decidendi: The Tribunal emphasized that the AO has an obligation to verify evidence when the assessee was not given a fair opportunity during the assessment process, particularly in ex-parte situations.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. grounds of appeal raised by the assessee. (Para 1) |
| 2. background facts of the case. (Para 2 , 3) |
| 3. cit(a)'s findings on additional evidence. (Para 4 , 5) |
| 4. parties' arguments regarding the assessment. (Para 6 , 7) |
| 5. court's analysis of evidence and reasoning. (Para 8 , 9 , 10) |
| 6. final decision on the appeal. (Para 11) |
PER PAWAN SINGH, JUDICIAL MEMBER:
1. This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Ld. CIT(A)) dated 17.03.2025 for A.Y. 2011-12. The assessee has raised the following grounds of appeal:
“ 1. On the basis of facts and the circumstances of the case, the Hon’ble CIT(A) has grossly erred in confirming the addition made by the Lrnd. A.O. to the tune of Rs. 1,36,77,000/- u/s 69C of the I.T. Act 1961 towards purchase of Immovable property.
2. On the basis of facts and the circumstances of the case, the Hon’ble CIT(A) has grossly erred in upholding the rejection of additional evidence by the Lrnd A.O in his remand report who has hurriedly passed the remand order without considering /overlooking the detailed submissions made by the Appellant.
3. Hon’ble CIT(A) has grossly erred, on facts and in law, by rejecting the additional evidence inspite of complete and comprehensive details / documents substantiating the assessee’s claim, submitted during the remand proceeding and before the hon’ble CIT(A) as /and the submissions stating the details of the circumstances. mentioned in the Rule 46A are squarely applicable to the present situation.
4. Hon’ble CIT(A) has grossly erred, on facts and in law by confirming the tax demand of ₹ 1,14,85,060/-.
5. On the basis of facts and the circumstances of the case, the Ld. AO erred in charging interest under section 234A, 2348, & 234C of the Income-tax Act, 1961.
The Appellant craves leave to add, amend, modify, or alter any ground or add new ground which may be necessary.”
2. The brief facts of the case are that the case of assessee was reopened under section 147 on 29.03.2018. The case was reopened on the basis of information that assessee is non filer of income tax return and assessee has purchased immovable property. The AO (Assessing Officer) issued notice under section 148 on 29.03.2018, after taking approval from PCIT (Principal Commissioner of Income Tax). During assessment, the AO noted that a number of notices were issued to the assessee which were either return unserved or no reply was filed/not attended by assessee. The AO on the basis of information that assessee has purchased property of Rs. 1.36 Cr, made addition of entire alleged investment as an income from undisclosed source at the time of passing assessment order passed under section 144 r.w.s 147 on 21.12.2018. Aggrieved by the additions in the assessment order, the assessee filed appeal before learned CIT(A) on 07.07.2020.
3. Before CIT(A), the assessee in her statement of fact stated that she is a housewife and was residing at Flat no. 405, Ashiyana, J.P. Road, Andheri (West), Mumbai. The residential address of assessee was changed to B-2604, HDIL Metropolis Residency, J.P. Road, Four Bungalows, Azad Nagar, Andheri (West), Mumbai. The assessee was not aware about the assessment order carried out by AO as all the notices were sent at the old address. The assessee has not received any notices or the assessment order. The assessee came to know when his bank account was attached for the recovery of tax amount. On attachment of his bank account the assessee realised about ex-parte order passed by AO. The assessee obtained copy of assessment order in the month of March 2020 and appeal was filed before CIT(A). The assessee sought condonation of delay in filing appeal. On merit the assessee submitted that investment in the property was made by his son. His son purchased the property at Rs. 1.43 Cr. For the purpose of administrative conveniences, the name of assessee being mother was added as a joint purchaser. The agreement of property was registered on 22.12.2010.
