Housewife Taxpayer Not Complied to Notices for Stock Transaction: ITAT Remits ₹11.16 Lakh Unexplained Income Matter with 10k Costs [Read Order]

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) remitted to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, imposing a cost of ₹10,000 for non-compliance with statutory notices.

Anupam Shailesh Syal (assessee) did not file her income tax return for AY 2012-13 and was identified as a non-filer through the Non-Filer Monitoring System (NMS). The Assessing Officer (AO) noted stock transactions worth Rs. 11,16,526 during the year, based on AIR/CIB information.

A notice under Section 133(6) was issued, seeking details of these transactions, but the assessee failed to respond. The AO treated the entire amount as undisclosed and unexplained income under Section 147 of the Income Tax Act, 1961.

The case was reopened with approval from the Principal Commissioner of Income Tax (PCIT), and a notice was issued. The assessee filed a return, declaring a total income of Rs. 18,340. Despite multiple notices and a show-cause notice, the assessee did not provide details or explanations. The AO added ₹11,16,526 as undisclosed income.

Aggrieved by the AO’s order, the assessee appealed to the CIT(A). The CIT(A) issued hearing notices on 24.02.2021, 25.02.2024, and 04.10.2024. The assessee failed to comply, and the CIT(A) dismissed the appeal based on available records, including the AO’s order, without addressing the merits.

Aggrieved by the CIT(A)’s order, The assessee appealed to the ITAT. The Counsel argued that the CIT(A)’s order passed under Section 250, violated natural justice by not granting a hearing. The counsel submitted an affidavit stating that the assessee, a housewife, relied on her husband to handle tax matters, who was an NRI working in Saudi Arabia.

The Counsel submitted that the assessee's husband's absence prevented timely compliance with notices. The Counsel requested one more opportunity for the assessee to present her case before the CIT(A), promising vigilance in furnishing details.

The two-member bench comprising Suchitra Raghunath Kamble (Judicial Member) and Bijayananda Pruseth (Accountant Member), observed that the assessee’s non-cooperation with statutory notices was undisputed.

The bench observed that the CIT(A)’s order under Section 250 failed to discuss the merits, violating Section 250(6) of the Income Tax Act, which requires a reasoned order. It granted the assessee another opportunity for a hearing.

The Bench set aside the CIT(A)’s order and remitted the matter for fresh adjudication, subject to the assessee paying Rs. 10,000 to the District Legal Services Authority within three weeks. The appeal was allowed for statistical purposes.

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