Wife gets income tax notice for husbands’ Rs 6.75 crore house purchase; Read Order

On August 4, 2025, the Bombay High Court offered relief to a wife accused of possible tax evasion by the income tax department, following her husband’s decision to make her a joint owner of a property in Mumbai valued at Rs 6.75 crore. The husband had added her name to the property deed merely for convenience, as he financed the entire amount using his own resources from HDFC Bank.

The husband’s bank records and property documentation verified that he was the sole purchaser. The wife argued that the tax evasion notice should not be aimed at her; however, the Income Tax Assessing Officer disregarded her defense and proceeded with issuing a notice.

Consequently, both the wife and her husband received tax notices under Section 148. Although the Bombay High Court ruled in favor of the wife in this case, the notice directed to the husband remains unresolved and will be considered separately.

The Bombay High Court judge remarked: “Upon reviewing these documents, it is perplexing how the Assessing Officer arrived at the conclusion that any income had escaped assessment for A.Y. 2021-22 concerning the Petitioner (wife). She acknowledged that her income for that assessment year was merely Rs 4,36,850 and clearly stated that she did not contribute to the purchase of the flat, which was entirely funded by her husband.”

Read the article to discover why both the husband and wife were implicated in this tax evasion incident and how the wife managed to find relief. Furthermore, it discusses preventive measures that joint property owners can take to avert similar tax notices and complications.

How Did This Case Begin?

According to the Bombay High Court judgment from August 4, 2025, here’s a chronological breakdown of significant events:

• 2021-22: The wife submitted an income tax return (ITR) for AY 2021-22 (FY 2020-21), declaring her income as Rs 4 lakh (4,36,850).
• June 21, 2024: A notice under Section 133(6) of the Income Tax Act, 1961, was issued to the wife, stating that the Income Tax Department possessed information regarding a transaction involving the purchase of immovable property that could impact taxable income. The notice also requested details about the flat purchased for Rs 6.75 crore.
• July 3, 2024: Responding to this notice, the wife clarified that she was a homemaker and that her husband exclusively financed the property. Her name was included as a joint second owner purely for convenience.
• September 18, 2024: In response to the wife’s explanation, the Income Tax Department sent another notice under Section 133(6), requesting the purchase deed and payment details along with the husband’s bank statements.
• 2024: The income tax department issued a preliminary verification report, summarizing the background regarding the initial Section 133(6) notice.
• March 31, 2025: A notice under Section 148 was issued in her name, prompting her to challenge it in the Bombay High Court.
• August 4, 2025: The Bombay High Court declared the notice sent to the wife by the tax department null and void.

Bombay High Court: Notice Issued to Wife for Husband’s Property Purchase is Unjust

Justice B.P. Colabawalla and Firdosh P. Pooniwalla of the Bombay High Court stated:

• “Upon reviewing these documents, it is unclear how the Assessing Officer could determine that any income had escaped assessment for A.Y. 2021-22 concerning the Petitioner (wife). She made it clear that her income for that year was only Rs 4,36,850.”
• “She further conveyed to the Income Tax Department that she did not contribute anything toward the property’s purchase, which was entirely funded by her husband, as evidenced by his bank statements.”
• “Given this context, it’s apparent that the officer issuing the Section 148 notice had no justification to believe that the Petitioner’s income had escaped assessment for A.Y. 2021-22.”
• “Paradoxically, in this case, a notice under Section 148 was also sent to the Petitioner’s husband, following notices issued under Section 133(6) to him, which alleged income escapement from the same transaction. Under these circumstances, we are firmly of the view that the Section 148 notice issued to the Petitioner (wife) is wholly unsustainable.”

Judgment: “In light of the preceding discussion, we conclude that the notice issued under Section 148 [to the Petitioner – wife] cannot be justified.”

Legal Precedents Cited by the Bombay High Court

Justice B.P. Colabawalla and Firdosh P. Pooniwalla noted:

“We are bolstered by a prior ruling in the case of Kalpita Arun Lanjekar Vs. Income Tax Officer (2024) 160 taxmann.com 726 (Bombay):

• “In this instance (160 taxmann.com 726), the Assessee was a housewife with no income, and her husband purchased a flat in both their names. The inclusion of her name was solely for convenience.”
• “In these circumstances, the Court observed that the basis for the issuance of the challenged order under Section 148A(d) was solely her failure to provide the source of the funds utilized for the property bought by her husband, particularly given that the husband’s income was only Rs 18,49,980.”
• “The Bombay High Court recognized the concession from the Department, stating that such details must be retrieved from her husband’s assessment rather than from the wife, as the Assessing Officer had acknowledged that the wife did not make any payment for the property. In this context, the Division Bench in the case of Kalpita Arun Lanjekar (supra) annulled the order dated March 31, 2023, issued under Section 148A(d) of the Income Tax Act, 1961.”

Precautions Joint Property Owners Can Take to Prevent Tax Notices

ET Wealth Online consulted experts for advice to help joint property owners avoid tax-related issues. Key recommendations include:

• Clearly Define Financial Contributions: Document each co-owner’s financial input and ownership percentage in the purchase agreement to maintain transparency with tax authorities.
• Maintain Comprehensive Financial Records: Securely store all financial documents related to the property, such as bank statements and loan agreements, to verify fund sources during tax scrutiny.
• File Accurate Tax Returns: Report property information correctly on income tax returns (ITRs), especially if some co-owners have no financial input.

Ashish Karundia, Chartered Accountant, advises that precautions differ based on each owner’s contribution. If funds come as a gift, formalize it with a gift deed, and accurately disclose ownership shares in ITRs. Properly document loans to clarify contributions. If names are added for convenience, state this clearly in agreements to avoid tax complications.

Significance of This Judgment for Homeowners

Experts discuss a recent Bombay High Court judgment clarifying that spouses or family members listed as joint owners solely for convenience are exempt from tax scrutiny if they didn’t contribute financially. Key points include:

• The judgment protects individuals, especially homemakers, from unjust tax liabilities.
• Tax reassessments should rely on tangible evidence of income rather than assumptions of joint ownership.
• Proper documentation of funding sources is crucial for non-contributing owners.
• The ruling limits unnecessary tax notices and reaffirms the need for valid reassessment procedures.

Dr. Suresh Surana emphasizes that the decision offers clarity on rights for non-financial co-owners and reinforces safeguards against arbitrary tax assessments.