ARCHANA NAYAR,NEW DELHI V. ITO WARD 30(4), NEW DELHI

ITA 646/DEL/2024

AI Insights

The case involves Archana Nayar, the Appellant, who appealed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, which sustained an addition of Rs. 2,95,00,000 as undisclosed income under section 69 of the Income Tax Act, 1961. The addition was initially made by the A.O. due to the Assessee's failure to explain the source of investment in mutual funds amounting to Rs. 9,95,00,000. The Assessee argued that the investments were made by her husband and provided evidence to support this claim, which was not considered by the CIT(A) due to procedural technicalities under Rule 46A of the Income Tax Rules, 1962. The Tribunal found merit in the Assessee's arguments and remanded the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474866 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-10-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 14-02-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIRENDER SINGH
• Assessee Lawyers: BHARAT BERIWAL
• Keywords: Principle of natural justice; Source of fund
• Section: 147; 144; 142(1); 69

Judgement Text

" 1 ITA No. 646/Del/2024 Archana Nayar Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 646/Del/2024, (A.Y.2012-13) Archana Nayar R-205, Greater Kailsah, New Delhi PAN No: AGWPN9557F Vs. ITO Ward-30(4) Room No. 1207, 12th Floor, E-2, Block, Pratyakashu Kar Bhawan, Civic Centre, New Delhi (Appellant) (Respondent) Appellant by Sh. Bharat Beriwal, Adv Respondent by Shri Virender Singh, Sr. DR Date of Hearing 22/10/2024 Date of Pronouncement 24/10/2024 ORDER PER YOGESH KUMAR U.S., JM : This appeal is filed by the Assessee against the order of Ld.CIT(A)/National Faceless Appeal Centre [“NFAC” for short], dated 17/01/2024 for the Assessment Year 2012-13. 2. The grounds of Appeal are as under: - “1. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, vide impugned order dated 17.01.2024, has erred in sustaining the addition of 2,95,00,000/- made by the 2 ITA No. 646/Del/2024 Archana Nayar Vs. ITO learned AO u/s 69 of the Income Tax Act, 1961 as undisclosed and undeclared income. 2. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, vide impugned order dated 17.01.2024, has erred in sustaining the addition of 2,95,00,000/- made by the learned AO u/s 69 of the Income Tax Act, 1961 despite recording that evidences in support of the investments having been made by the husband of the appellant were placed on record by the appellant to explain the alleged investments appearing in her name. 3. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, vide impugned order dated 17.01.2024, has erred in not appreciating that the appellant was prevented by sufficient cause for not furnishing the information / details before the learned AO during assessment proceedings. 4. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, vide impugned order dated 17.01.2024, has erred in rejecting the evidences placed on record by the appellant / assessee on a technical ground of non-filing of application under Rule 46A of the Income Tax Rules, 1962 for admission of such evidence, despite having coterminous powers over the sources of income constituting the subject matter of assessment. 3 ITA No. 646/Del/2024 Archana Nayar Vs. ITO 5. That, without prejudice to the above, the learned Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delhi, has erred in not appreciating that Rule 46A of Income Tax Rules, 1962 does not prevent / forbid him from directing production of such documents as is required for disposal of an appeal or for any other substantial cause. In fact, sub-rule (4) of Rule 46A specifically empowers the learned Commissioner (Appeals) to direct production of any evidence and examination of any witness to enable him to dispose of the appeal or for any other substantial cause. 6. That, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delhi has erred in law in not appreciating that being an appellate authority it had the jurisdiction as well as the duty to correct all errors in proceedings under appeal. 7. That, on the facts and in the circumstances of the case, the impugned order dated 17.01.2024 passed by the learned Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delhi is, hence, violative of the principles of natural justice and hence liable to be set-aside. 8. That, without prejudice to the above, the learned Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delhi, has erred in not appreciating that the Assessment Order did not even satisfy the parameters of best judgment assessment enshrined u/s 144 of the Income Tax Act, 1961 as well as principles of income escaping assessment prescribed under section 147/148 of the Income Tax Act, 1961. 4 ITA No. 646/Del/2024 Archana Nayar Vs. ITO 9. That the appellant craves leave of the Hon'ble Tribunal to add, amend, alter or delete any or all of the grounds of appeal herein on or before the date of hearing of the appeal.” 3. Brief facts of the case are, the Assessee filed no return for Assessment Year 2012-13. A Notice u/s 142(1) has been issued for which the Assessee stated that Assessee had ‘no source of income in individual capacity being a home maker in Financial Year 2011-12’.An Assessment order came to be passed u/s 144 r.w. Section 147 of the Act on 07/12/2019 by making an addition of Rs. 2,95,00,000/- on the ground that the Assessee has no explanation for the source of investment in mutual funds of Rs. 9,95,00,000/-. Aggrieved by the assessment order dated 07/12/2019, the Assessee preferred an Appeal before the CIT(A). The Ld. CIT(A) vide order dated 07/01/2024, dismissed the Appeal filed by the Assessee. As against the order of the Ld. CIT(A) dated 17/01/2024, the Assessee preferred the present appeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) has committed grave error in sustaining addition of Rs. 2,95,00,000/- made by the A.O. u/s 69 of the Act despite the Assessee providing evidences in support of the investment having been made by the husband of the Assessee which were placed on record by the Assessee to explain the source 5 ITA No. 646/Del/2024 Archana Nayar Vs. ITO of the investment made in her name, thus sought for setting aside the orders of the Lower Authorities. 5. Per contra, the Ld. Departmental Representative relying on the orders of the Lower Authorities, sought for dismissal of the Appeal. 6. We have heard both the parties and perused the material available on record. During the assessment proceedings the Assessee has provided several opportunities by issuing the notices which were not complied by the Assessee. The assessment order came to be passed u/s 144 of the Act by making an addition of Rs. 2,95,00,000/- as the Assessee failed to prove the source of investment in mutual funds. Before the Ld. CIT(A) it was the specific case of the Assessee that the investments in the mutual funds have been made in joint name of the Assessee and by providing the copies of the bank statement, submitted that the investments have been made by the husband of the Assessee. The contentions of the Assessee and the documents submitted by the Assessee have not been looked-into by the CIT(A) on the ground that those documents have not been produced before the A.O., therefore, the same cannot be admissible. In our considered opinion, the Ld. CIT(A) ought to them looked into the documents produced by the Assessee and should have considered the submissions made by the Assessee. Considering the fact that the assessment order has been passed u/s 144 r.w. Section 147 of the Act, we deem it fit to remand the matter to 6 ITA No. 646/Del/2024 Archana Nayar Vs. ITO the file of the A.O. with a direction to the Assessee to produce all the documents to prove the source of the investment made in the mutual fund and the Ld. A.O. is directed to decide the issue afresh in accordance with law after providing the sufficient opportunity to the Assessee. 7. In the result, the Appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in open Court on 24th October, 2024 Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24/10/2024 R.N, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "