Case Law Details
Siddikha M. Pathan Vs ITO (ITAT Pune)
In a notable judgment, the Income Tax Appellate Tribunal (ITAT) Pune, in the case of Siddikha M. Pathan Vs Income Tax Officer, dealt with an appeal concerning the assessment year 2011-12. The appeal, which was delayed by 316 days, was admitted after the ITAT was satisfied with the reasons for the delay provided by the assessee. The core issue revolved around the confirmation of an addition of Rs. 28,25,000/- by the Assessing Officer (AO) under section 69 of the Income-tax Act, 1961, deemed as unexplained investment.
Case Background: The case surfaced during the assessment proceedings of Mr. Girish Rajkumar Rachatte, Latur, where it was discovered that he, along with three others including the appellant, had purchased an immovable property in Latur. The appellant’s share in the property, inclusive of all expenses, was valued at Rs. 28,25,000/-. The appellant, who had not filed a return of income under section 139, was issued a notice under section 148 by the AO, who subsequently made an addition for unexplained investment due to the appellant’s failure to substantiate the source of investment.
Appellate Proceedings: The appellant contended that the investment was sourced from family members and an advance received, as detailed in her submissions. However, the AO, after an ex parte order under section 144, and the CIT(A) upon reviewing partial evidence and a remand report, upheld the addition. This led the appellant to appeal to the ITAT.
ITAT’s Analysis and Decision: Upon review, the ITAT found that the appellant had submitted partial evidence regarding the source of investment and pointed out inconsistencies identified by the AO. Notably, the appellant presented additional evidence in the form of bank statements during the appeal, which were not part of the records examined by the AO or the CIT(A).
Considering the circumstances, including the ex parte nature of the original assessment and the appellant’s subsequent attempt to substantiate the source of investment with additional evidence, the ITAT concluded that a fresh assessment was warranted. The Tribunal set aside the impugned order and remanded the matter to the AO with directions to reassess the case afresh, allowing the appellant to present further evidence in support of her claims.
Conclusion: The ITAT Pune’s decision to remand the case back to the AO underscores the Tribunal’s commitment to ensuring that assessments are based on a comprehensive examination of all relevant evidence. This judgment highlights the importance of providing taxpayers with a fair opportunity to substantiate their claims, especially when new evidence comes to light. The case serves as a reminder of the procedural safeguards in place within the Indian tax system to protect taxpayer rights and promote equitable treatment in the assessment process.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee arises out of the order dated 27-10-2022 passed by the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2011-12.
2. This appeal is time barred by about 316 days. The assessee has filed an affidavit stating the reasons which led to the late filing. I am satisfied with the reasons so stated. Therefore, the delay is condoned and the instant appeal is admitted for disposal on merits.
3. The only issue raised in this appeal is against the confirmation of addition of Rs.28,25,000/- made by the Assessing Officer (AO) u/s.69 of the Act.
4. Briefly stated, the facts of the case are that during the course of assessment proceedings in the case of Mr. Girish Rajkumar Rachatte, Latur for the assessment year under consideration, it transpired that he along with three other persons, including the assessee, had purchased an immovable property situated at Survey No.17, Mauje Kanheri, Taluka Latur admeasuring 12 Acres & 60 Guntas for a total consideration of Rs. 1.00 crore, in which all the four persons had equal share. The assessee’ s share in the investment towards the purchase of property inclusive of stamp duty and registration fees etc. came to Rs.28,25,000/-. The assessee did not furnish any return of income u/s.139 of the Act. The AO issued notice u/s.148 and required the assessee to substantiate the evidence of source of investment made. The assessee remained absent, which led to the passing of the ex parte order u/s.144 making addition of Rs.28,25,000/- towards unexplained During the first appellate proceedings, the assessee tried to substantiate the source of Rs.28,25,000/- by claiming that a sum of Rs.8,31,000/- was received from Abdul Razzak Mojamkhan Pathan (Elder son); Rs.5,61,000/- from Shoaib Mojamkhan Pathan (Younger son); Rs.13,00,000/- from Tharav Patra (Advance on 02-11-2010) and Rs.1,33,000/- out of own funds. The assessee submitted partial evidence in support of the transactions. The ld. CIT(A) called for a remand report from the AO, who did not concur with the assessee’ s submission on all the above four sources of investment. The ld. CIT(A) went with the AO’s information and confirmed the addition. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
5. I have heard both the sides and gone through the relevant material on record. Admittedly, the assessee submitted partial evidence of sources of the investment, claimed to have obtained from his two sons and the amount received as per Tharav Patra along with cash available. The AO pointed out certain inconsistencies in the dates. The assessee has filed the paper book running into 54 pages. The first 24 pages were before the AO/CIT(A) and from pages 25 onwards till 54 page are the additional evidence which include bank statements of two bank accounts. It is thus seen that the assessment order was passed ex parte u/s. 144 and the assessee could not properly substantiate the genuineness of the source of investment fully during the remand proceedings as well. Further, the assessee has filed certain additional evidence before the Tribunal in support of the genuineness of the source of investment. Considering the totality of facts and circumstance of the case, I am of the considered opinion that it would be in the fitness of the things if the impugned order is set aside and the matter is restored to the file of the AO. I order accordingly and direct him to frame the assessment afresh. Needless to say, the assessee will be at liberty to lead evidence in support of his explanation.
6. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 11th December, 2023.
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