Housewife cannot be reassessed under Income tax for joint property held with husband [Read order]

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The above judgement is passed by Hon’ble Bombay High Court in case of Kalpita Arun Lanjekar Vs. Income Tax Officer, Ward-28(2)(1), Dt. 11.03.2024 [Writ Petition no. 5966 of 2023].

Brief Facts: Kalpita Arun Lanjekar, the petitioner, is a housewife with no personal income, hence was not filing her return of income. She received a notice from the Income Tax Officer, Ward-28(2)(1), under Section 148A(b) of the Income Tax Act, 1961 stating that there is an information received from Insight Portal under the risk management strategy which suggest that her income had escaped assessment. The information suggested that an immovable property valued at INR 1.14 Cr. was found registered in the name of the Petitioner.

Petitioner’s Contention: In response to the notice, the petitioner, contended that the property mentioned in the notice was purchased solely by her husband. She asserted that she had not contributed any funds towards this transaction and provided documentation supporting this claim which includes copy of the registered agreement, husband’s bank details, etc. The Petitioner also explained that her name was included as a joint holder in the agreement for sale, but no payment had been made by her.

Respondent’s Contention: The Income Tax Officer, however, proceeded to pass an order under Section 148A(d) of the Act. This order stated that the petitioner’s explanation and provided documents were insufficient to conclusively prove that her income had not escaped assessment. The order was primarily based on the alleged failure of the petitioner to furnish details regarding the source of funds utilized by her husband for the property purchase.

Judgement and Conclusion: Upon review, the High Court found that the order dated March 31, 2023, passed under Section 148A(d) of the Act was not justified in the case of the petitioner. The court observed that the petitioner had clearly demonstrated that she had not made any financial contributions towards the property purchase. Additionally, the court noted that the details regarding the source of funds should have been sought from the petitioner’s husband for his assessment, rather than from the petitioner herself. Furthermore, the court found it surprising that the Principal Chief Commissioner of Income Tax had sanctioned the order.

Consequently, the High Court quashed and set aside the aforementioned order, ruling in favor of the petitioner.

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