2020 (3) TMI 682 - AT - Income Tax

Reopening of assessment u/s 147 - non-service of notice u/s 148 - undisclosed investment - land received from Aunt - Amount disclosed in the sale deed - Assessee stated that no amount paid to Aunt - HELD THAT - Assessee was required to obtain PAN and give her address which has not been done in this case. Therefore, the AO was absolutely justified in sending notice under section 148 of the Act on the last addresses available as per registered sale deed. Since, the assessee was not residing on the given addresses, therefore, question of refusal to accept the notice does not arise.Therefore, the ld.CIT (A) has rightly observed that the contention of the appellant that the service of notice is not as per section 282 is not tenable in law and was not accepted. In the light of above facts and circumstances, We find that that there was a proper service of notice under section 148 of the Act by affixture and the assessee was well aware of the assessment proceedings going on in her case as evident from letter dated 26.09.2016 filed by the intended to be A.R. of the assessee in connection with penalty show-cause notice under section 271(1)(b) of the Act dated 24.08.2016 - Decided against assessee Addition being investment in purchase of immovable property - only evidence relied upon is the registered sale deed - HELD THAT - We find that there is a valid registered sale deed dated 22.12.2008 which has come on record and same is sought to be disapproved through oral evidence being plain paper signed by some villagers to say that the assessee was adopted daughter. CIT (A) has rightly held that such a recourse is not permitted in law as per provisions contained in chapter VI of Indian Evidence Act, 1872, which prohibits admission of oral evidence to contradict contents of a contract reduced in writing and registered as per law subject to certain exceptions like fraud, misrepresentation etc. It is not the case of the assessee that the contents of the sale deed were ambiguous or of such a nature which required elaboration or clarification through oral evidence. Nor she has alleged any fraud, misrepresentation, intimidation, or want of due execution or want of capacity in any executing party, or failure of consideration, or mistake in fact of law. The contention of the AO that sale deed was prepared by the writer in a routine way cannot be accepted, where consideration was clearly discernible and recorded on registered sale deed itself and claimed to be having paid at home by the both parties of the deal. CIT (A) also observed that letter on plain paper signed by village Sarpanch/ villagers is only self-serving document and does not hold ground against clear recitation in the registered sale deed dated 22.12.2008, and the seller Smt. Naseeb Kaur was transferring her ownership in the property along with all attendant rights to the appellant Smt. Tirath Kaur and another person Smt. Joginder Kaur, in lieu of consideration of ₹ 1,04,28,000, half of which is ₹ 52,14,000. In the light of above facts and circumstances, we do not find any infirmity in the order of CIT (A), accordingly, same is upheld. - Decided against assessee.

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 ?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 ?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 ?54,79,710 as unexplained investment in immovable property:
The AO treated the investment of ?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 ?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.

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