INCOME TAX OFFICER, LUDHIANA V. BHAVNEET KAUR WALIA, LUDHIANA

ITA 247/CHANDI/2025

AI Insights

The case involves an appeal by the Revenue against the decision of the Ld. CIT(A), which quashed the reassessment proceedings against the assessee, Smt. Bhavneet Kaur Walia. The reassessment was based on allegations of undisclosed investment in immovable property amounting to Rs. 2,86,42,500 during the assessment year 2015-16, derived from information from the Investigation Wing. The Ld. CIT(A) found that the Assessing Officer failed to provide any substantive details or conduct a proper inquiry, leading to a decision in favor of the assessee. The Revenue's appeal to the Tribunal challenged the quashing of the reassessment proceedings, but the Tribunal agreed with the Ld. CIT(A)'s findings and dismissed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779737 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 15-02-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: VIPIN GUPTA; C.A VIRTUAL
• Keywords: Reassessment proceedings; Unexplained investment; Assessment record; Competent authority; Reason to believe; Tangible material; Borrowed satisfaction
• Section: 147; 69

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 247/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2015-16 The ITO Rishinagar Ludhiana-141001 बनाम Bhavneet Kaur Walia 12-A, South City, Ayali Khurd, Ludhiana-141024 Punjab ˕ायी लेखा सं./PAN NO: BDRPK1324E अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Vipin Gupta, C.A (Virtual) राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 09/10/2025 उदघोषणा की तारीख/Date of Pronouncement : 15/10/2025 आदेश/Order PER LALIET KUMAR, J.M: The present appeal filed by the Revenue is directed against the order of the Ld. CIT(A)/NFAC, Delhi dt. 24/12/2024 , for the assessment year 2015–16. 2. In the present appeal Revenue has raised the following grounds: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in law & facts of the case, in quashing the proceedings u/s 147/148 of the Act as the AO has duly recorded the reasons to form an opinion with regard to escapement of income with the prior approval of the competent authority? 2. Whether on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax(Appeals) has erred in law & facts of the case in deleting the addition of Rs. 2,86,42,500/- made by the AO u/s 69 of the Income-tax Act, 1961 on account of unexplained investment in immovable property? 3. That, the Ld. Commissioner of Income Tax (Appeals), NFAC has failed to appreciate that the assessee's case is covered in the passing of information received from Enforcement Directorate vide letter dated 25.01.2019. 4. That, the Ld. CIT(A), NFAC has erred in law & facts of the case in deciding the appeal in favour of the assessee without appreciating that the name of the assessee & her bank account maintained with IDBI Bank are duly reflected at Sr. No. 10 in Annexure-B of the said information passed on by the Enforcement Directorate dated 25.01.2019. Printed from counselvise.com 2 5. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed off. 3. Briefly the facts of the case are that the assessee, Smt. Bhavneet Kaur Walia, was subjected to reassessment proceedings under section 147 of the Act on the basis of information received from the Investigation Wing, alleging that the assessee had made undisclosed investment of Rs.2,86,42,500/- in an immovable property during the relevant year. 3.1 During the course of assessment, the assessee repeatedly sought the details of the said investment, including the description of property, address, and particulars of seller or payment. However, the Assessing Officer failed to provide any such details either during the reassessment proceedings or thereafter. The assessment order was completed under section 147 read with section 143(3), making addition of Rs.2,86,42,500/- as unexplained investment. 4. Aggrieved, the Assessee preferred appeal before the Ld. CIT(A), challenging the initiation and validity of proceedings under section 147/148 as well as the addition made. 4.1 The Ld. CIT(A), after examining the assessment order and submissions of the assessee, recorded categorical findings as under: “The case of the appellant has been re-opened based on an information from the Investigation Wing. However, the Ld. A.O. has not stated the details of the property in which the appellant has allegedly made undisclosed investment amounting to Rs. 2,86,42,500/-, no details of the seller or the mode of payment or any details thereof have been put forth. The material relied upon to re-open the assessment and the additions made thereof by the Ld. A.O. have not been explained even a wee bit. The onus of providing the details of the undisclosed investment lied with the department, for this is the case of the department that the appellant has made undisclosed investment during the assessment year. It can be stated that the Ld. A.O. has simply re- opened the assessment based on the information of the investigation wing without going into checking the veracity of the passed on information. Hence, there is complete lack of application of mind on part of the Ld. A.O. The assessment order of the Ld. A.O. is completely perfunctory, ill conceived and ill thought. In view of the facts and circumstances as stated above, the proceedings u/s 147/148 are liable to be quashed. The grounds of appeal 1, 2, 6 and 8 are hereby allowed. Since, the proceedings u/s 147/148 have been quashed, the rest of the grounds of appeal become infructuous.” Printed from counselvise.com 3 5. Aggrieved by the order of the Ld. CIT(A), the Revenue has filed the present appeal before the Tribunal. 6. During the course of hearing, the Ld. DR was specifically directed on the earlier date to produce the assessment record and verify the description, address, and details of the property alleged to have been purchased by the assessee. However, despite sufficient opportunity, the Ld. DR could not place on record any such document or detail to establish that any property was in fact purchased by the assessee during the relevant year. 7. On the other hand, the Ld. Counsel for the assessee reiterated that the Assessing Officer neither disclosed the source of information nor shared any material indicating investment in any property, rendering the reassessment based purely on borrowed satisfaction and devoid of any independent application of mind. 8. We have carefully considered the rival submissions, the material available on record, and the order of the Ld. CIT(A). It is not in dispute that the Assessing Officer initiated proceedings solely on the basis ofan information received from the Investigation Wing, without specifying the nature, address, or details of the property. The record also does not reveal any inquiry or verification conducted by the AO prior to issuance of notice under section 148. 8.1 It is a settled law that the Assessing Officer must apply his own mind to the material before forming a “reason to believe” that income has escaped assessment. Mere reproduction of investigation wing information without verifying its correctness constitutes mechanical reopening and vitiates the entire proceedings. 8.2 In the instant case, the absence of even basic particulars of the alleged investment demonstrates total non-application of mind. The AO neither verified ownership records nor examined bank accounts or purchase deeds to corroborate the allegation. Printed from counselvise.com 4 8.3 Even before this Tribunal, when specifically directed, the Department could not produce any evidence or material to substantiate that the assessee made any such undisclosed investment. Therefore, we find ourselves in complete agreement with the finding of the Ld. CIT(A) that the initiation of proceedings under section 147/148 was mechanical, based on borrowed satisfaction, and without any tangible material. Consequently, the reassessment order is unsustainable in law. 8.4 In view of the above discussion and the categorical findings of the Ld. CIT(A), which remain uncontroverted by the Revenue, we see no infirmity in the order of the Ld. CIT(A) quashing the proceedings under section 147/148 of the Act. Accordingly, the appeal filed by the Revenue is dismissed. 9. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 15/10/2025 Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "