2021 (8) TMI 1207 - AT - Income Tax

Tribunal Partially Allows Appeal, Dismisses Addition, Confirms Rs. 48,22,450/- Addition

PARMINDER KAUR W/O SH. SATNAM SINGH Versus ITO-III (3) JALANDAR

PARMINDER KAUR W/O SH. SATNAM SINGH Versus ITO-III (3) JALANDAR - [2021] 91 ITR (Trib) 216 (ITAT [Amrit]) Issues Involved:1. Reopening of assessment under Section 147 read with Section 148 of the Income Tax Act.2. Service of notice and assessment order at incorrect address.3. Delay in filing the appeal before the CIT(A) and its condonation.4. Validity of additions based on a purported agreement to sell.5. Source of investment for the property purchase.Detailed Analysis:1. Reopening of Assessment under Section 147 read with Section 148 of the Income Tax Act:The assessee filed a return of income for the assessment year 2009-2010. The case was reopened under Section 147 read with Section 148. The assessing officer issued a questionnaire and statutory notice, which were not initially served due to incorrect address. The assessee later appeared and requested the reasons for reopening, which were provided on February 23, 2013. The assessment order mentioned an agreement for a property purchase, leading to an addition of Rs. 3,17,47,500/- as undisclosed income.2. Service of Notice and Assessment Order at Incorrect Address:The assessee claimed not to have received the assessment order or demand notice, as they were sent to an incorrect address. The correct address was 868 Krishna Nagar, Ludhiana, but notices were sent to 863 Krishna Nagar and 507 Mota Singh Nagar, Jalandhar. This incorrect service was verified by the CIT (D.R.), who acknowledged that notices were sent to the wrong address.3. Delay in Filing the Appeal Before the CIT(A) and Its Condonation:The assessee filed an appeal before the CIT(A) after a delay of 1313 days, citing reasons such as the incorrect address, the husband's illness, and subsequent death, which led to a lack of knowledge about the case. The CIT(A) dismissed the appeal without condoning the delay. However, the tribunal found reasonable cause for the delay and condoned it, allowing the appeal to be heard on merits.4. Validity of Additions Based on a Purported Agreement to Sell:The additions were based on a photocopy of an alleged agreement to sell, which the assessee claimed was forged. The same agreement was previously considered in the case of the assessee's husband, where no additions were made based on it. The tribunal noted that the agreement was not recovered from the assessee, was not signed by her, and was not confronted in original. Thus, it was inadmissible as evidence. The tribunal held that the revenue cannot take a contradictory stand, especially when the same document was not relied upon in the husband's case.5. Source of Investment for the Property Purchase:The assessee failed to disclose the source of investment for the property. The tribunal noted that the husband had claimed the source of Rs. 64,10,000/- as loans from family friends, but this was not substantiated. The tribunal concluded that the assessee did not independently explain the source of Rs. 48,22,450/- invested in the property. Consequently, the addition of Rs. 48,22,450/- was confirmed.Conclusion:The tribunal condoned the delay in filing the appeal and dismissed the addition based on the purported agreement to sell, deeming it inadmissible. However, the assessee's failure to disclose the source of investment led to the confirmation of the addition of Rs. 48,22,450/-. The appeal was partly allowed.