SMT. MEENAKSHI MITTAL,JAGRAON V. ITO,WARD-1, JAGRAON

ITA 1132/CHANDI/2019

AI Insights

This case involves an appeal by Smt. Meenakshi Mittal against the order of the Ld. CIT(A)-3, Ludhiana, which sustained the addition of Rs. 10,07,130 made by the Assessing Officer (AO) under the Income Tax Act, 1961. The addition was based on alleged financial transactions in the purchase of shares. The assessee contested that she did not receive the notices under sections 148 and 142(1) of the Act, as she had moved and her address was not updated in the records. The AO, during remand proceedings, verified that the actual investment made was Rs. 1,19,000 and not Rs. 10,07,130 as initially assessed. The Tribunal found that only the amount of Rs. 1,19,000 could be brought to tax and remitted the case back to the AO for determining the tax liability on this amount.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107705 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMANPREET KAUR
• Assessee Lawyers: S.K. MUKHI
• Keywords: Additional evidence; TDS
• Section: 147; 148; 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी िवŢम िसंह यादव, लेखा सद˟ एवं ŵी परेश म. जोशी, Ɋाियक सद˟ BEFORE: SHRI. VIKRAM SINGH YADAV, AM &SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ ITA No. 1132/Chd/2019 िनधाŊरण वषŊ / Assessment Years : 2010-11 Smt. Meenakshi Mittal D/o Shri Vijay Kumar, #500/36A, Street No. 4, Shastri Nagar, Jagraon, Punjab-141012 बनाम The ITO Ward-1, Jagraon ˕ायी लेखा सं./PAN NO: AITPM6520G अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri S.K. Mukhi, Advocate राजˢ की ओर से/ Revenue by : Smt. Amanpreet Kaur, Addl. CIT, DR सुनवाई की तारीख/Date of Hearing : 20/01/2025 उदघोषणा की तारीख/Date of Pronouncement : 19/02/2025 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-3, Ludhiana dt. 14/06/2019 wherein the assessee has challenged the sustenance of addition of Rs. 10,07,130/- made by the AO. 2. Briefly, the facts of the case are that basis information that the assessee has made financial transactions in purchase of shares amounting to Rs. 10,07,130/-, notice under section 148 was issued to the assessee on 28/03/2017. There was however no compliance on the part of the assessee. Subsequently, notice under section 142(1) was issued and in response, the Counsel for the Assessee attended the assessment proceedings and the matter was discussed. 2 The AO has however recorded the finding that no explanation was offered on part of the assessee with regard to the source of investments made in purchase of shares. Therefore, in absence of the explanation furnished by the assessee explaining the source of financial transactions made in purchase of shares of Rs. 10,07,130/-, the same was brought to tax in the hands of the assessee. 3. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has since sustained the findings of the AO. 4. During the course of hearing, our reference was drawn to the written submissions filed before the Ld. CIT(A) vide letter dt. 18/06/2019 and the contents thereof read as under: “The Appellant has been assessed by the Ld. Income Tax Officer at total income of Rs. 1007130 on account of alleged Investment for Purchase of Shares. The proceedings have been initiated on the basis of AIR/CIB information received by the Ld. Assessing Officer. The Assessee was married on 21-01-2007 to Sh. Kunj Bihari Garg and has shifted after marriage to Ludhiana and her address is as under 17A, Aggar Nagar Extension, Ludhiana 141001 After marriage Appellants name has been changed from Meenakshi Mittal to Meenakshi Garg. The Notices under section 148 and 142 (1) of the Income Tax Act, 1961 have not been received by her, as she was not residing at Jagraon at the address mentioned in the Assessment Order. Afier marriage the Assessee has strained relations with her late father's family members, as such she was not made aware of the proceedings initiated by the Income Tax Department. The Appellant has received Assessment Order with Demand Notice on 30-01-2018 from her Mother when she visited her at Jagraon. The Appellant/Assessee could not comply the notices, as she was not served notices under section 148 and/or 142 (1) of the Income Tax Act, 1961 at all. 2. It is submitted that the Appellant has not been served any notice u/s 148 of the L.T. Act. 1961. It is denied that the notice u/s 148 was served upon the Assessee on 30.03.2017. The Assessee after marriage has shifted to her new residential address as under:- Smt. Meenakshi Mittal Alias Meenakshi Garg, 17A, Aggar Nagar Extension, Ludhiana-141 012 The notice if any u/s 148 of the 1.T. Act, 1961 was sent at the Jagraon address, which was never forwarded to the Assessee for necessary action. Due to strained relations with my father's family, the Appellant was never informed regarding Income Tax proceedings initiated for A.Y. 2010-11. It is pertinent to mention that Appellant's father Vijay Kumar Mittal has already expired in 1990 and the Appellant before marriage was living in the Joint family with her uncles and 3 grandfather at Jagraon. Her grandfather Sh. Chiranji Lal Mittal also expired on 21.01.2015 after which date the relations got strained further and there was no communication amongst the Appellant and the Joint family members i.e. uncles. Since the notice u/s 148 was not received by the Appellant, the Appellant/Assessee could not comply the notice. Further appellant's income was also below taxable limit for the year under reference, as such no Return of Income was filed earlier. 3. It is further submitted that the Assessee's Permanent Account Number in the name of Smt. Meenakshi Garg at Jagraon was not used by the Appellant after her marriage on 21.01.2007 with Sh. Kunj Bihari Garg. 4. Further the Appellant's name had changed from Meenakshi Mittal to Meenakshi Garg and ter address had also changed from Jagraon to Ludhiana, as mentioned herein above. The Appellant was advised to apply for new Permanent Account Number as her name and address had changed. The Appellant applied for new Permanent Account Number in the name of Meenakshi Garg with residential address 17A, Aggar Nagar Extension, Ludhiana 141 012. She was allotted new Permanent Account Number on 08.04.2014 as under:- PAN BNIPG8030L The Appellant has filed Returns of Income from the A.Y. 2013-14 onwards under the new Permanent Account Number. The Appellant has also informed the Income Tax Officer concerned at Jagraon by letter dated 26.02.2018 regarding change of her address and allotment of new Permanent Account Number, the earlier Permanent Account Number has also been surrendered, copy of the letter dated 26.02.2018 is enclosed for ready reference. 5. Profit & Loss A/c for A.Y. 2010-11 is enclosed wherefrom it is apparent that her income was below limit liable to tax. Without prejudice to foregoing contentions, it is submitted that the Assessing Officer has framed Assessment at Rs. 10,07,130 on the basis of information AIR/CIB regarding financial transactions in respect of Purchase of Shares amounting to Rs. 10,07,130. The addition has been made on Purchase of Shares, whereas it has been ignored to be considered that Purchase of Shares were on credits and the transactions with the bröker firms were on the credit limits sanctioned by them, copies of accounts of the three broker firms ihrough whom transactions regarding Purchase and Sale of shares took place are enclosed. Net income as per three brokers accounts work out at Rs. 9,180/-, It is further submitted that the Assessee has prepared tentative Profit & Loss Account and Balance Sheet for the year under reference on the basis of Bank transactions and other details. The interest income credited in the firm M/s Brother Rice and General Mills, (Joint Family Firm of uncles) Jagraon amounting to Rs. 45,151 has also been taken into consideration. The credit balance in M/s. Brother Rice and General Mills, Jagraon is brought forward balance in the account of the Appellant/Assessee. TDS of Rs. 4,515 has also been deducted on the interest of Rs. 45,151 credited in her account. The balance is brought forward from earlier years when the Appellant/Assessee was unmarried. Further no amount has been received by the Appellant/Assessee and there was no other credit and debit entry during the year under reference. 4 7 It is further submitted that the Appellant has not authorized any counsel for representing her case in the matter before The Income Tax Officer, Jagraon. Further the Appellant has not been informed regarding any proceedings initiated in the matter by the Income Tax Department at Jagraon, as such the details requisitioned could not be filed. 8 It is further submitted that the Assessee has not received any notice/s issued on 11.05.2017 and 10.08.2017 / 142 (1) of the Income Tax Act, 1961. The notices were issued at the Jagraon address, which were never forwarded to the Assessee for the needful. 9 In view of the facts and circumstances of the case, the Assessment framed deserves to be quashed for want of service of notice u/s 148 of the I.T. Act, 1961 on the Appellant. Moreover, the Investment for which addition has been made is below taxable limit as such also the addition deserves to be deleted. 10 The Appellant is filing separate application under rule 46A of the LT. Act, 1961 for production of Additional Evidence, as the same could not be produced earlier. We shall be pleased to clarify any other point/s as may be desired in the matter.” 5. Further, our reference was drawn to the remand report submitted by the AO vide letter dt. 23/05/2019 and the relevant contents thereof read as under: “2. In this regard, your goodself had sought the comments on admissibility of additional evidence produce under Rule 46A and grounds of appeal a. The Assessee through counsel had appealed before your goodself that the Ld. Income Tax Officer has erred in reopening of the assessment order under Section 147 of the Income Tax Act, 1961 as income liable to tax has not escaped assessment. Further he contested that the Assessment proceedings initiated are void ab-initio due to Non-service of notice u/s 148 of the Act. It is respectfully submitted that the Assessment Order passed u/s 147 of the Act is valid and within ambit of law and provisions laid down under Income Tax Act, 1961 Notice u/s 148 of the Income Tax Act., 1961 served through speed post no EP45867258411N and also personally. The counsel of the assessee vide his reply dated 18-06-2018 attached as Annexure-A. I have gone through the reply submitted by assessee through counsel and not found any valid reason for non- compliance of the notice. The Assessee through counsel had narrated a story which could not be rely upon without any basis of documents. She has again been given opportunity during the remand proceedings, the reply furnished by the assessee is again not supported with any evidence. The claim of non receiving the statutory notice is baseless and the proceedings initiated by my predecessors are legally valid as follows:- The department had allotted PAN to the assessee and the assessee was having fly to amend/change the address through NSDL. The assessee never intimated the department about change in address. Furthermore, as per record notice under section 148 of the Act is valid issued and served legally. The assessee ought 5 to have legally bound to comply each notice. During the proceedings u/s 143(3)/147 of Act., The Assessing Office was never been intimated about the change of address or name. It is surprising to read the story that her family members are not co-operating. Generally in such situation, the family members refused to take notice and reported to the notice server. On going through the submission of counsel it came in notice that the assessee had got her name changed and been allotted a New PAN (BNIPG8030L) even after having facility given by the department to modify or change the address and name. The Assessee is holding double PAN, which is illegal and required further legal action. In view of the above submission, the additional evidence submitted during the appellate proceedings may kindly be rejected and the Assessment Order framed by the Ld AO may kindly be upheld. b. Without Prejudice During the remand proceedings, the assessee through counsel had submitted that the assessee had submitted the copy of financial statements (Balance Sheet, Profit and loss account and ledgers) and again submitted copy of D-Mat A/c, Sauda Summary and evidence of investment, on going through the same, it is seen that the assessee had made investment of Rs. 1,19,000 through her bank accounts maintained with HDFC Bank and Vijaya Bank. On going through the Sauda Summary and Statement of Account maintained by broker, the assessee had incurred loss on share transactions.” 6. It was accordingly, submitted that during the remand proceedings, the AO himself has carried out the necessary verification of documentation regarding the investment so made by the assessee and has held that the assessee has only made an investment of Rs. 1,19,000/- through her bank account maintained with HDFC Bank and Vijaya Bank and further she has incurred loss on the share transaction. It was accordingly submitted that there is no basis for sustaining the addition of Rs 10,07,130/-. It was further submitted that even as per the remand report submitted by the AO, where the same amount of Rs. 1,19,000/- is brought to tax, the same would be below the taxable limit and therefore there is no basis for levying the tax in the hands of the assessee. 7. Per contra, the Ld. DR has relied on the findings of the lower authorities. 8. We have heard the rival contentions and purused the material available on record. Given the admitted position that the assessee has only made investment of Rs 1,19,000/- as against the figure of Rs 10,07,130/- as so verified by the AO during the remand proceedings, only an amount of Rs 1,19,000/- can be 6 brought to tax and the addition is accordingly restricted to Rs 1,19,000/- and the matter is accordingly remitted to the file of the AO to determine the tax liability, if any in the hands of the assessee. 9. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 19/02/2025. Sd/- Sd/- परेश म. जोशी िवŢम िसंह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟/ ACCOUNTANT 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 "