2019 (10) TMI 80 - AT - Income Tax

Reopening of assessment - admission of additional evidences - non disclosure of purchase of immovable property transaction exceeding ₹ 30 lakhs - AO has taken up the case for scrutiny and issued the notices u/s 143(2) and 142(1) - HELD THAT - When there is a doubt regarding correctness of the contents of the paper book, it is obligatory on the part of the DR to send the paper book to the AO and ascertain the correctness of the documents placed in paper book. Though two years were lapsed after submission of the paper book, no such exercise was made by the department and no evidence was placed before us. Therefore, we are unable to accept the allegation that the documents from sl. 2 to 21 are false. DR should make allegation only with proper evidence, but not on assumptions or presumptions. Though it is mentioned in the assessment order or CIT(A) orders that the assessee has not furnished any details, she cannot simply allege that the documents are not within the knowledge of AO or CIT(A) since the documents in Sl.No.2 to 7 are nothing but the orders of the department or the appeals papers filed by the assessee. Therefore, it is clear that the DR has made argument without any basis or without any verification. Therefore, we reject the contention of the Ld.DR. In addition to the above the Ld.AR has argued that the assessee is a house wife carrying on small time business of sarees and completely dependent on her husband. AO completed the assessment ex-parte u/s 144 by issue of notices, in spite of the fact that the assessee is carrying on the business and the AO is vested with powers u/s 133A, no such exercise was done by the AO. Though the assessee did not respond to the notices issued by the AO, the AO also did not take any action for such non response which shows that the AO was also very considerate for the hapless position of the assessee. During the appeal hearing, the Ld.DR argued that if at all the case is to be remitted back to the file of the AO, the Bench must consider for imposing some costs against the assessee for her irresponsible attitude. From the order of the AO, we have noticed that the AO did not take any such recourse for non response, though the AO is vested with the powers u/s 271(1)(b) of the Act for levy of penalty. The AO also did not take any action u/s 133A / 131 to elicit information from the assessee. Therefore, we find no merit in the argument of the Ld.DR to impose the costs. This case needs to be considered on human approach and we find merit in the argument of the Ld.AR that with strained relations from her husband, there is genuine reason for not collecting information due to non cooperative attitude of her husband. From page No.35 of the paper book, it is evident that her husband has made the payments and the lands were registered in the name of his wife. This also supports the submission of the assessee that the funds were arranged by her husband for acquiring the properties. Therefore, in the interest of justice, we admit the additional evidence and we are of the considered opinion that in the facts and circumstances of the case, the case required to be remitted back to the file of the AO to redo the assessment denovo. Accordingly, the appeal is remitted back to the file of the AO with a direction to redo the assessment denovo after giving sufficient opportunity to the assessee. - Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
1. Non-disclosure of property transactions in the return of income.
2. Treatment of outstanding balances of sundry creditors as unexplained.
3. Failure to furnish necessary information and confirmation letters.
4. Ex-parte proceedings and confirmation of additions by CIT(A).
5. Admission of additional evidence and remittal of the case back to the AO.

Analysis:
1. The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2011-12 due to non-disclosure of property transactions exceeding a certain limit. The Assessing Officer initiated proceedings under section 147 of the Income Tax Act after finding discrepancies in the return of income filed by the assessee, leading to the addition of unexplained balances of sundry creditors and agricultural income due to lack of proof. The assessment was completed under section 144 r.w.s. 147 of the Act.

2. The assessee, an illiterate lady, argued that her husband handled all business affairs and transactions, causing a lack of awareness on her part regarding the sources of funds and sundry creditors. Despite attempts to explain the situation and submit additional evidence, the CIT(A) completed the proceedings ex-parte, confirming the additions made by the AO. The Tribunal considered the plea for one more opportunity to present the case with the submission of additional evidence.

3. The arguments centered around the non-cooperation of the husband, leading to the inability to collect necessary information. The Department opposed the admission of additional evidence, claiming false certification and lack of response from the assessee. However, the Tribunal found merit in the submission that the case required a human approach due to the circumstances faced by the assessee, admitting the additional evidence and remitting the case back to the AO for a fresh assessment.

4. The Tribunal emphasized the need for cooperation from the assessee with the AO for the timely completion of the assessment. It was decided that the appeal was allowed for statistical purposes, directing the assessee to cooperate with the department for the assessment process. The case was remitted back to the AO for a denovo assessment, considering the genuine reasons for the lack of information provided initially.