Simple Singh Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) in Delhi recently passed a crucial judgment in the case of Simple Singh vs. the Income Tax Officer (ITO), ruling on the nature of additions made without proper verification.
In this case, the Revenue Department reopened Singh’s case due to investments in immovable property, and due to lack of response from Singh, the assessment was conducted ex parte. Despite Singh submitting crucial evidence that could potentially alter the case’s outcome, the Commissioner of Income Tax (Appeals) upheld the additions without verifying these pieces of evidence.
The ITAT, taking a critical view, found this addition without verification to be unjustified. The tribunal directed the lower authorities to examine the evidence presented by Singh diligently. If the Assessing Officer (AO) finds that Singh had enough funds to invest in the immovable property, they are directed to delete the addition.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 13.07.2022, pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal:
“1. In view of facts, circumstances and evidences placed on record, the learned Commissioner of Income Tax (Appeals) NFAC is erred in law and otherwise on facts holding and relied upon the order passed by the Assessing Officer mentioning therein “The assessment order itself mentions the efforts made by AO” is most arbitrary and uncalled for because in-spite of request made by the Appellant/Assessee in her written arguments asking for the virtual attendance, the order passed by learned CIT(Appeals)-NFAC without giving an opportunity to explain her claim or controvert the order is most arbitrary, uncalled for the order so passed is liable to be annulled.
2. In view of facts, circumstances and evidences placed on record, the ld. CIT (Appeals)-NFAC did not bother to verify from the record whether the notices said to have been sent through speed post have actually been served upon the appellant/assessee or remained un-served in-tern the Assessing Officer did not provide any material to Appellant/Assessee to controvert her case. The order passed by the CIT(A)-NFAC is restless order liable to be annulled.
3. In view of facts, circumstances and evidences placed on record, the ld. CIT (Appeals)-NFAC was not justified in rejecting the claim of Appellant/Assessee that the investment in purchase of property duly appear in Balance Sheet made part of Return filed duly uploaded on Govt. Portal. The Appellant/Assessee is being punished on the clear negligence of the part of Assessing Officer that the Return could not be located on portal whereas it is an established facts the Appellant/Assessee is filing her Return regularly for more than two decades.
4. Without prejudice to above grounds while discussing the investment part in purchase of property the ld. CIT (Appeals)-NFAC ignore the facts on record, the brought forward cash balance as per Return filed along with Balance Sheet immediate of preceding year has even been not considered and whole part of investment in property was taxed as income for the year under appeal is most arbitrary and uncalled for, the addition so made is liable to be deleted.
5. The Appellant/Assessee craves leave to take additional grounds of appeal before or at the time of hearing of the appeal and/or modify any of the above grounds.”
2. The facts giving rise to the present appeal are that in this case assessment was reopened by issuing notice u/s 148 of the Income-tax Act, 1961 (in short the “Act”). In response to the notice there was no compliance on the part of the assessee. Therefore, a show cause notice u/s 144 of the Act was issued on 11.12.2018 affording last opportunity to the assessee. Thereby the AO called upon the assessee to explain regarding purchase of property amounting to INR 35,00,000/- during the FY 2010-11relevant to the AY 2011-12. However, no explanation was given by the assessee. Therefore, the AO made addition of Rs. 37,35,000/- u/s 69 of the Act being unexplained investment. Hence, the AO assessed income at Rs. 45,50,650/-. Aggrieved against this the assessee preferred appeal before learned CIT(Appeals), who also dismissed the appeal and sustained the impugned addition. Now the assessee is in appeal before this Tribunal.
3. Apropos to the grounds of appeal learned counsel for the assessee vehemently argued that notice u/s 148 of the Act was not received by the assessee. He further reiterated the submissions as made in the written submissions, as reproduced below:
“The present appeal arise against the order passed by the CI’T(Appeals), NF AC, Delhi filed by appellant/assessee against the order of Assessing Officer dated instituted on 13.02.2020 dismissing the appeal the order so passed by the ld. CITCA), bears following drawbacks/shortcomings, the para-wise explanation are for adjudication before the Hon’ble Bench.”
