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2021 (8) TMI 1207 - AT - Income TaxCondonation of delay - proof of reasonable cause for not filing the appeal in time before the CIT (Appeals) - HELD THAT - Assessing Officer had sent the demand notice at incorrect address which is clear from the demand notice and the envelope placed on record - demand notice was served by affixation on 30th March, 2013, at wrong address. In fact, in the assessment order, the Assessing Officer himself has recorded that the correct address where the assessee resides, alongwith her husband. However, despite the above said the assessment order along with the demand notice were sent at the wrong address - the assessee was prevented from filing the appeal before the CIT (Appeals) within the time granted by the statute. Unexplained investment - Registered sale deed was made in the name of the assessee and her husband - AO had made the addition of 50% of assessee's share - HELD THAT - Though the assessee sought to explain the source disclosed by Assessee's husband in his assessment order, however, the same do not come for rescue for the assessee, as it is for the assessee to disclose the source of investment made by her in the property. Nothing has been disclosed and merely because the same was disclosed by the husband of the assessee, in our view, is no explanation in the eye of law as it is required to be independently tested and examined by the revenue authorities- in the assessment proceedings, the assessee has not submitted that the investment made by her was made after borrowing it from the husband. In fact, it was the case of the husband that the consideration was paid in cash to the seller. The assessing Officer of the husband had made the addition in the hands of the assessee (on account of undisclosed cash deposit in the bank account). As the assessee failed to disclose the source of investment either before the Assessing Officer or before CIT or before us, therefore, we have no other option but to confirm the addition - Decided against assessee.
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 ?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 ?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 ?48,22,450/- invested in the property. Consequently, the addition of ?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 ?48,22,450/-. The appeal was partly allowed.
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