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House served demand notice for being a joint holder

Vikas Gupta (31 Points)

21 November 2021  

I bought a property and registered it as a joint property in which my wife's name was added.

After 7 years IT raised notices to both of us separately asking for sources of income etc.

2 notices to my wife were not received. It got converted to a legal case. She got this notice and replied that she is a housewife and I have paid for the property and my ITR was attached. Again another notice came saying that they have not received the notice. She sent the same reply again. Both times the reply were written and handed over with a receipt stamp. 

In the meantime I had given all my loan, itr details to the AO concerned and I received a Nil assessment order closing the notice to me for the same property. I had also informed that there is a parallel notice to my wife which also needs to closed.

However, after that IT dept did not close the notice to my wife instead raised an assessment order u s 144 with a demand notice of a huge tax amount. All these documents were marked to a address we were staying 10 years back so we did not receive it. As my case was closed we had assumed that wife's case is also closed. Accidentally with the new portal we saw these AO and demand notice. We have raised appeal form 35.

We are worried because IT department has ignored our 3 letters and still raised two different  AOs for same property. 

One to me clearing the case and another to my wife that they have received ko details. 

Any suggestions on how this is happening and whether IT will reverse the AO and demand notice to my wife.


 10 Replies

Janak Shah (ca) (554 Points)
Replied 21 November 2021

Since you have appealed to CIT(A) it is necessary for you to mention in grounds of appeal that AO had ignored the submissions made by you and passed the order u/s 144 ex parte.
1 Like

Vikas Gupta (31 Points)
Replied 22 November 2021

Which I did with evidence. Two responses were submitted by my wife received by IT office with a stamp. In addition,  in my response I had mentioned that for the  same property my wife also has a notice. All three were ignored. I wonder why this happened. Also IT officer must be knowing that this is a joint property and if husband has given all evidence why wife also has to give.

CA Raj Doshi (Practising CA) (5528 Points)
Replied 22 November 2021

1. Separate submissions need to be done for each notice against each PAN

2. Even when the property in question is the same, The officer handling your case may not be the same for your spouse.

3. You should have updated the address in your PAN card so you would have received the mail on correct address
.. check supreme court judgement in below link

4. Also, check email id registered on income tax portal. Coz the notices would be send on same mail id




https://www.financialexpress.com/money/income-tax/pan-card-address-change-mere-mentioning-in-income-tax-return-itr-not-enough-rules-supreme-court/1741552/lite/#referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s

Vikas Gupta (31 Points)
Replied 22 November 2021

Valid points. The issue is that a housewife pay have a pan card but will seldom check the PAN address. The first 2 notices were sent to the correct address. If they did not receive the responses how they got the PAN no. Because the notices were that PAN and ITR needs to be shared.

Now can they close this because my husband has shared everything and received Nil AO. Will they connect and close my wife's AO and demand.

CA Raj Doshi (Practising CA) (5528 Points)
Replied 22 November 2021

1. not checking address - Ignore of law is no excuse

2. Two notices of spouse sent on correct address - that would be from the officer directly. But your case would have migrated to faceless assessment so then everything is to be responded online

3. Responses submitted offline would have to be uploaded online in the faceless assessment

4. A notice initiated for assessment is completed only passing of an order. Assuming no notice means closure is completed wrong.

5. Now the case will be heard by CIT Appeal only as the Assessment order is passed. Now no point in connect with the AO for rectifying the order.

Vikas Gupta (31 Points)
Replied 22 November 2021

Thanks. What is likely to be CIT (A) stand in this case. My wife has not tried to hide anything. As me and my wife both had visited IT office 3 times. Even when I was putting my case, she was there and her response was attached even to my response. 

In any case my AO of Nil assessment clears the fact whether there was any income concealment. 

There are many smaller points. The first notice said that they do not have PAN and ITR of my wife. At the time of registration we cannot register without PAN. By the 3rd notice, PAN started appearing. From where, if they did not receive her responses. Strange.

 

CA Raj Doshi (Practising CA) (5528 Points)
Replied 22 November 2021

Please hire a consultant to help you with the Appelate matters. Your assessment order will secondarily  help your case, but not primarily.

Vikas Gupta (31 Points)
Replied 22 November 2021

I just wanted to know how CIT(A) works. Whether they will consider that the property is one and two assessment orders raised by IT office. One which is satisfied with the source of income (husband) and the 2nd  Order which says the wife has not declared source of income for the same exact property therefore has concealed income.

I can definitely hire a consultant. 

A person with no source of income can be penalized with a huge penalty though there is evidence that 2 responses have been given but not considered by AOfficer. Also AOfficer does not check that the property is  also in the first name of the husband but keeps working in isolation. So in effect all errors of wife in not updating the address in PAN and not understanding the notice process will be much higher than the action of the AOfficer. Can that happen.

 

 

1 Like

CA Raj Doshi (Practising CA) (5528 Points)
Replied 22 November 2021

IT office has assessed the individual Incomes broadly and not individual properties. The fact that there was a joint property with spouse on namesake basis a
will be a good ground. Also, the acceptance of husband's claim of full house ownership in his assessment is another solid ground of defense.

officer is correct in stating concealment of income since he has not been brought to notice by the assessee. The onus is on the assessee to prove sources of income. Income tax officer is not required to inquire with fellow officers of the Assessment status of the husband to determine assessment procedures for the wife.

Also, since you have done submission and officer has not taken them into account so this is most important and strongest defense.

officer is not required to check first name on agreement. You are required to explain it by way of a written letter submission and documents to the wife's officer before completion of assessment.
2 Like

Vikas Gupta (31 Points)
Replied 22 November 2021

Thank you very much.

2 Like

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