Tulsi Das Noida vs ITO Ward 3(5), Noida UP: Unexplained Investment and Penalty Appeal for AY 2009-10

Tulsi Das Noida vs ITO Ward 3(5), Noida UP: Unexplained Investment and Penalty Appeal for AY 2009-10

Case Number: ITA 6428/DEL/2019
Appellant: Tulsi Das, Noida UP
Respondent: ITO Ward 3(5), Noida UP
Assessment Year: 2009-10
Date of Order: 2022-07-29
Order Type: Final Tribunal Order
Case Filed On: 2019-07-31

Background of the Case

This case pertains to the assessment year 2009-10, where the appellant, Tulsi Das, a resident of Noida, Uttar Pradesh, challenged the orders passed by the Income Tax Officer (ITO), Ward 3(5), Noida. The dispute arose from the addition of Rs. 46,20,000 as unexplained investment under Section 69 of the Income-tax Act, 1961, and subsequent penalty proceedings under Section 271(1)(c) of the Act.

Facts of the Case

The assessment was reopened under Section 147 of the Income-tax Act based on AIR (Annual Information Return) information that indicated Tulsi Das had purchased immovable property worth Rs. 46,20,000 during the year under consideration. The Assessing Officer (AO) alleged that Tulsi Das did not comply with the notice issued under Section 142(1) of the Act. As a result, the AO completed the assessment under Section 144 read with Section 147 of the Act, leading to the addition of Rs. 46,20,000 as unexplained investment under Section 69 of the Act.

Proceedings Before the Commissioner of Income-tax (Appeals)

Tulsi Das appealed against the assessment order before the Commissioner of Income-tax (Appeals) [CIT(A)], Noida. However, the CIT(A) dismissed the appeal in limine due to alleged non-compliance with the mandatory provisions of Section 249(4)(b) of the Income-tax Act. The CIT(A) concluded that Tulsi Das had not filed any return of income for the assessment year under dispute, which led to the dismissal of the appeal without examining the merits of the case.

Tribunal’s Findings on the Quantum Appeal (ITA No. 6427/Del/2019)

During the hearing of the quantum appeal (ITA No. 6427/Del/2019), it was revealed that Tulsi Das had indeed filed his return of income on 02.02.2010, declaring an income of Rs. 1,90,040. The return was also subjected to scrutiny, and the assessment was completed under Section 143(3) of the Act on 24.11.2011, accepting the returned income.

The Tribunal, presided over by Shri Saktijit Dey, Judicial Member, observed that the CIT(A) had misconceived the facts while dismissing the appeal. The Tribunal found that the provisions of Section 249(4)(b) were not applicable in this case since Tulsi Das had duly filed his return of income for the relevant assessment year.

Consequently, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the CIT(A) for a fresh decision on the merits of the case. The Tribunal allowed the appeal for statistical purposes.

Tribunal’s Findings on the Penalty Appeal (ITA No. 6428/Del/2019)

The penalty proceedings under Section 271(1)(c) of the Income-tax Act were initiated based on the alleged unexplained investment. Tulsi Das challenged the penalty order, which led to the filing of the present appeal (ITA No. 6428/Del/2019). However, there was a delay of 202 days in filing this appeal.

After considering the submissions, the Tribunal condoned the delay, finding that it was due to reasonable cause. The CIT(A) had dismissed the penalty appeal in limine due to the non-payment of appeal fees. The Tribunal noted that the outcome of the penalty proceedings depended on the quantum appeal, which was still pending.

In light of the above, the Tribunal set aside the penalty order and remitted the issue back to the Assessing Officer for reconsideration, depending on the result of the quantum appeal. This appeal was also allowed for statistical purposes.

Conclusion

The case of Tulsi Das vs ITO Ward 3(5), Noida UP, illustrates the complexities involved in cases of unexplained investment and subsequent penalty proceedings. The Tribunal’s decision highlights the importance of proper adherence to procedural requirements and the need for the CIT(A) to thoroughly examine the facts before dismissing appeals on technical grounds. The outcome of this case will ultimately depend on the fresh adjudication by the CIT(A) on the merits of the issues raised by Tulsi Das.

The final judgment in this case serves as a reminder to taxpayers and practitioners alike to ensure that all procedural aspects are meticulously followed to avoid unnecessary complications and delays in the resolution of tax disputes.

Tulsi Das Noida vs ITO Ward 3(5), Noida UP: Unexplained Investment and Penalty Appeal for AY 2009-10