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The Bombay High Court quashed the tax notice issued to a housewife, which was wrongly accused of tax evasion on the purchase of a flat of Rs 6.75 crore in Mumbai. The property, which was completely funded by her HDFC bank account by her husband, was listed as a joint owner for convenience, with no financial contribution from her. Despite her annual income being Rs 4.36 lakh and a clear document showing her husband’s payment, the Income Tax Department issued a notice under Section 148, alleging possible undeclared income.

The housewife woman clarified that the flat was bought by her husband, which is confirmed by a bank statement and property records. However, the Evaluation Officer (AO) ignored his explanation and issued a similar notice to both her and her husband for the same transaction. The High Court reviewed the evidence and ruled that there is no basis for the wife to suspect tax evasion, as the amount was completely of her husband. The court emphasized that the assessment of the husband should be included in any tax investigation and not the wife.

Citing an example of Kalpita Arun Lanzer vs. ITO (2024), the court confirmed that the nominated wife as co-owner cannot be taxed as per convenience, when the husband provides funds for fully shopping. The judges considered the notice issued against the wife as “completely unstable” and canceled it, while the husband’s case is still under consideration.

This decision accurately highlights the need for assessment and protects individuals from improper investigation. This outlines the importance of detecting the source of funds in property transactions to avoid unfair notices.