Abdul Wahid vs ITO Ward 63(1): Dispute Over Property Purchase Assessment for AY 2010-11

Case Overview: Abdul Wahid vs ITO Ward 63(1), Delhi

Case Number: ITA 6238/DEL/2019

Appellant: Abdul Wahid, Delhi

Respondent: ITO Ward-63(1), New Delhi

Assessment Year: 2010-11

Case Filed On: 2019-07-23

Order Type: Final Tribunal Order

Date of Order: 2021-11-23

Pronounced On: 2021-11-23

Introduction

The case of Abdul Wahid vs ITO Ward 63(1) pertains to the assessment year 2010-11, where the appellant, Abdul Wahid, contested an ex-parte assessment order passed by the Income Tax Officer (ITO), Ward-63(1), New Delhi. The dispute arose over the addition of Rs. 11,33,000 to Abdul Wahid’s income based on the purchase of an immovable property. The appellant argued that the property was purchased jointly with another individual, Mr. Mohd. Nizam, and that this fact had been ignored by the assessing authorities.

Background of the Case

The case originated from information received by the Income Tax Department regarding the purchase of an immovable property for Rs. 11,33,000 during the financial year 2009-10. The appellant, Abdul Wahid, had not filed a return of income for the relevant assessment year, leading the department to reopen the case and issue a notice under section 148 of the Income Tax Act, 1961.

Despite the issuance of the notice, the appellant did not attend the assessment proceedings or provide the necessary details. Consequently, the Assessing Officer (AO) proceeded to make an ex-parte assessment under sections 144 and 148 of the Act, adding Rs. 11,33,000 to the appellant’s income.

Appellant’s Contentions

Abdul Wahid contested the assessment order, arguing that the property in question was purchased jointly with Mr. Mohd. Nizam, and therefore, the entire investment should not have been attributed solely to him. The appellant presented documents such as a General Power of Attorney (GPA) and the sale deed, which named both Abdul Wahid and Mohd. Nizam as co-owners of the property. However, these documents were not considered by the Assessing Officer or the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the addition made in the ex-parte assessment.

The appellant further contended that he was not given a fair opportunity to present his case, as the assessment was conducted ex-parte without proper consideration of the material evidence. The appellant argued that the CIT(A) erred in dismissing the appeal without adequately considering the joint ownership of the property and the corresponding investment made by Mohd. Nizam.

Tribunal’s Findings

The Income Tax Appellate Tribunal (ITAT) examined the submissions made by both parties. The ITAT noted that the assessment order was ex-parte, and the CIT(A) had rejected the additional evidence presented by the appellant under Rule 46A of the Income Tax Rules. The CIT(A) had based its decision on the lack of evidence to corroborate the claim that the property was jointly purchased with Mohd. Nizam and that the investment was not entirely made by Abdul Wahid.

The ITAT observed that the authorities below did not fully consider the appellant’s claim of joint ownership and the supporting documents. The Tribunal acknowledged that the appellant had presented documents indicating joint ownership, which should have been duly considered. The ITAT emphasized the importance of giving the appellant a fair opportunity to explain the source of the property purchase.

Tribunal’s Decision

The ITAT set aside the order of the CIT(A) and remanded the case back to the Assessing Officer for a fresh assessment. The Tribunal directed the AO to provide Abdul Wahid with a sufficient opportunity to present his case and to consider the evidence of joint ownership and the investment made by Mohd. Nizam. The ITAT made it clear that the assessment should be conducted afresh, taking into account all relevant facts and evidence.

Conclusion and Implications

The case of Abdul Wahid vs ITO Ward 63(1) underscores the importance of proper consideration of evidence and fair opportunity in assessment proceedings. The ITAT’s decision to remand the case for a fresh assessment highlights the need for tax authorities to thoroughly examine all aspects of a case before making additions to an assessee’s income. The outcome of the reassessment could have significant implications for Abdul Wahid, particularly regarding the proper attribution of investment in the property and the resulting tax liability.

Order Pronounced in the Open Court on 23rd November, 2021.

Judicial Member: Kul Bharat

Abdul Wahid vs ITO Ward 63(1): Dispute Over Property Purchase Assessment for AY 2010-11