This case involves a dispute between Simple Singh of Meerut and the Income Tax Officer, Ward-2(5), Meerut, concerning unexplained investment in property during the fiscal year 2010-11 relevant to the assessment year 2011-12. The case, filed under ITA No. 1961/DEL/2022, questions the assessments made by the lower tax authorities and subsequent appeal decisions.
The appellant, Simple Singh, was issued a notice under section 148 of the Income Tax Act, 1961, which led to an ex parte assessment by the Assessing Officer (AO) due to non-compliance by the assessee. The AO’s assessment resulted in an addition of Rs. 37,35,000 as unexplained investment under section 69 of the Income Tax Act, which was later upheld by the Commissioner of Income-tax Appeals (CIT(A)).
During the tribunal proceedings, the appellant’s counsel argued that the notices were not duly served and that the initial notice had errors, including the wrong gender and name details. Moreover, the counsel highlighted that the assessee had a consistent track record of income tax compliance, suggesting the investments in question could be traced back to legitimate sources, such as past savings and gifts.
The tribunal acknowledged the procedural flaws in the handling of the case by the lower authorities. It was noted that the evidence presented by the assessee, which included affidavits from donors and documentation of agricultural income, was not adequately verified by the CIT(A). Consequently, the tribunal set aside the order of the CIT(A) and restored the assessment to the AO with instructions to reassess the matter after verifying the source of the funds used for the property purchase.
The tribunal’s decision to remand the case back to the AO for further investigation highlights the importance of proper verification of evidence and adherence to procedural fairness in tax assessments. The outcome of this appeal serves as a reminder of the rights of taxpayers to a fair hearing and the duty of tax authorities to thoroughly investigate claims before making additions to tax assessments.
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