2022 (11) TMI 969 - AT - Income Tax

Rectification of mistake u/s 254 - Validity of re-assessment proceedings u/s 147/148 - investment/undisclosed income - as argued Tribunal failed to take note of the fact that the AO has made addition of the entire amount despite the fact that the assessee is owner of only half portion of the property - HELD THAT - The assessee has placed on record sale-deed which was the basis for making addition by the AO. A bare reading of the sale-deed makes it clear that the property as per stamp valuation was purchased at Rs. 30,29,000/- against the actual sale consideration of Rs. 15 lakh and was jointly purchased by Smt. Shahjahan W/o Mohd. Tayyab Kureshi and Smt. Rukshana Begum W/o Shri Khalid. Therefore, the aspect of ownership of the property in joint names which was the subject matter for making the addition as per the stamp valuation had escaped attention of the Tribunal. Therefore, the order 2019 (6) TMI 826 - ITAT DELHI passed by the ITAT Delhi Bench SMC is hereby recalled and the Registry is directed to fix the hearing of the appeal in due course by issuing notices to the parties.

Summary

Issues:
1. Seeking recalling/rectification of the order passed by ITAT Delhi Bench 'SMC' in ITA no. 3814/Del/2018 relating to A.Y. 2008-09.

Analysis:
1. The primary issue raised in the misc. application was the validity of re-assessment proceedings under section 147/148 of the Income Tax Act. The assessee contended that the jurisdictional issue should have been decided first, emphasizing the importance of this ground for assuming jurisdiction under the Act. The application highlighted that the reasons for re-opening the assessment were not adequately addressed, and the Tribunal failed to provide a final decision on this critical matter. The application argued that the order needed recalling and a decision on the jurisdictional issue was warranted for fair justice.

2. Another issue focused on the source of investment by the assessee. The application pointed out discrepancies in the Tribunal's order regarding the ownership of the property and the investment amount. It was argued that the Tribunal overlooked the fact that the property was jointly purchased by two individuals, and the assessee was only the owner of half the property. The application stressed that the Tribunal's decision to add the entire investment amount in the hands of the assessee was erroneous and required rectification.

3. The Tribunal, in its order dated 01.01.2019, failed to consider crucial aspects related to the ownership of the property and the source of investment. The sale deed, presented as evidence by the assessee, clearly indicated joint ownership of the property, which was crucial in determining the correct quantum of addition. The Tribunal's oversight of this vital information led to an incorrect assessment of the investment amount attributable to the assessee. Consequently, the Tribunal's order was recalled to rectify this oversight and ensure a fair hearing of the appeal with all relevant issues considered.

4. The decision to recall the Tribunal's order was based on the fundamental errors in addressing the jurisdictional issue and the misinterpretation of ownership details in the sale deed. The rectification was deemed necessary to uphold the principles of fair justice and ensure a comprehensive examination of all pertinent issues in the appeal. The recall of the order allowed for a fresh hearing where the ownership structure and investment sources could be properly evaluated, aligning with the legal requirements and principles of equity.

5. Ultimately, the misc. application filed by the assessee seeking recalling/rectification of the ITAT Delhi Bench's order was allowed. The Tribunal acknowledged the errors in the initial decision and directed the Registry to schedule a new hearing of the appeal to address the issues of jurisdictional validity and ownership details accurately. The decision to recall the order aimed to uphold the integrity of the legal process and provide a fair opportunity for the parties to present their case effectively.