2020 (3) TMI 682 - AT - Income Tax

Tribunal upholds CIT (A) decisions on notice validity & unexplained investment

Smt. Tirath Kaur Versus Income Tax Officer, Ward- Dasuya

Smt. Tirath Kaur Versus Income Tax Officer, Ward- Dasuya - TMI Issues Involved:1. Non-service of notice under section 148 of the Income Tax Act.2. Validity of jurisdiction under section 148.3. Justification for initiation of proceedings under section 147/148.4. Addition of Rs. 54,79,710 as unexplained investment in immovable property.5. Rejection of evidence regarding non-payment of money for the property.6. Sufficiency of the sale deed as evidence of payment.Issue-wise Detailed Analysis:1. Non-service of notice under section 148 of the Income Tax Act:The assessee contended that the notice under section 148 was not properly served as it was affixed to a non-living house. The CIT (A) upheld the service of notice by affixture, noting that the AO made several attempts to serve the notice at the last known address, which was the address mentioned in the registered sale deed. The Tribunal found that the AO followed the correct procedure by serving the notice through affixture in the presence of two witnesses, as the assessee was not traceable. The Tribunal upheld the CIT (A)'s decision, citing the Supreme Court's ruling in Pr.CIT v. M/s. I-Ven Interactive Limited, which emphasized that the AO was justified in sending the notice to the address available as per the PAN database.2. Validity of jurisdiction under section 148:The assessee argued that the ITO Dasuya did not have valid jurisdiction. The Tribunal noted that the AO had jurisdiction over the assessee as the notice was issued based on the address in the registered sale deed. The Tribunal found that the AO's actions were justified and in accordance with the law, as the assessee did not provide any updated address or PAN details.3. Justification for initiation of proceedings under section 147/148:The Tribunal observed that the AO had valid reasons to believe that income had escaped assessment, as the assessee had not filed a return of income for the assessment year 2009-10 despite purchasing an immovable property for Rs. 54,79,710. The initiation of proceedings under section 147/148 was upheld as the AO recorded proper reasons for reopening the assessment.4. Addition of Rs. 54,79,710 as unexplained investment in immovable property:The AO treated the investment of Rs. 54,79,710 as unexplained and added it to the total income. The assessee argued that no consideration was paid for the property as it was a gift from her adoptive mother. The CIT (A) and the Tribunal rejected this claim, noting that the registered sale deed clearly mentioned the sale consideration. The Tribunal upheld the addition, stating that the sale deed was valid evidence of the transaction.5. Rejection of evidence regarding non-payment of money for the property:The assessee provided affidavits and letters from villagers to support her claim that no money was paid for the property. The CIT (A) rejected this evidence, stating that oral evidence cannot contradict the contents of a registered sale deed. The Tribunal agreed with the CIT (A), emphasizing that the sale deed was clear and unambiguous regarding the payment of consideration.6. Sufficiency of the sale deed as evidence of payment:The Tribunal found that the registered sale deed was sufficient evidence of the payment of consideration. The sale deed mentioned that the consideration was paid at home prior to registration. The Tribunal dismissed the assessee's claim that the sale deed was prepared in a routine manner without actual payment, upholding the CIT (A)'s decision that the sale deed was the primary evidence of the transaction.Conclusion:The Tribunal dismissed the appeal, upholding the CIT (A)'s decisions on all grounds. The service of notice under section 148 was deemed valid, the AO had proper jurisdiction, and the initiation of proceedings under section 147/148 was justified. The addition of Rs. 54,79,710 as unexplained investment was upheld, and the evidence provided by the assessee to contradict the sale deed was rejected. The registered sale deed was considered sufficient evidence of the payment of consideration.