KANTA MITTAL,DELHI vs. CIT(A)-26, DELHI

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ITA 1433/DEL/2025Status: DisposedITAT Delhi25 August 2025AY 2014-20155 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that it is an admitted fact that despite opportunities granted by the CIT(A), the assessee did not file submissions, leading to the dismissal of the appeal for non-compliance. The Tribunal also observed that the assessee did not appear before the lower authorities. Considering the totality of the facts and circumstances and in the interest of justice, the Tribunal deemed it proper to restore the issue to the file of the Assessing Officer. A direction was given to grant one final opportunity to the assessee to substantiate its claim and decide the issue based on facts and law. The assessee was also directed to appear before the AO and cooperate in the proceedings. The grounds raised by the assessee were allowed for statistical purposes. The appeal of the assessee was allowed for statistical purposes.

What were the facts?

The assessee, Kanta Mittal, is appealing an order from the Commissioner of Income Tax (Appeals)-26, Delhi, dated December 13, 2024. This order pertained to Assessment Year 2014-15 and arose from an assessment order passed under Section 147 read with Section 143 of the Income Tax Act, 1961. The Assessing Officer (AO) had initiated reassessment proceedings and made an addition of Rs. 3,74,07,986/-, assessing the total income at Rs. 4,58,46,164/-. The assessee, engaged in commission agency and trading, had sold agriculture land along with co-owners, with the sale consideration disclosed in the registered sale deed. The CIT(A) dismissed the assessee's appeal. The assessee is now before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were validly initiated without a proper reason to believe that income had escaped assessment? The assessee contended that the reassessment was mechanically initiated without proper verification and inquiry, contrary to legal principles. The revenue argued that departmental authorities passed reasoned orders. 2. Whether the addition of Rs. 3,74,07,986/- was wrongly upheld by the CIT(A), given that the sale consideration of agriculture land was reported and the capital gain was exempt under Section 54B of the Income Tax Act, 1961? The assessee argued that the sale deed evidenced the non-taxability of the capital gain. The revenue contended that the assessee did not participate in the proceedings before the CIT(A). 3. Whether the CIT(A) erred in concluding that the appellant did not participate in appellate proceedings and acted in violation of natural justice by not providing a fair opportunity to present the case? The assessee claimed to have filed a reply on October 7, 2024, containing necessary facts and explanations, and that the CIT(A) ignored it. The revenue stated the assessee did not participate in the proceedings before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 143,Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI

Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL

Hearing: 25/08/2025Pronounced: 25/08/2025

Date of hearing: 25/08/2025 Date of Pronouncement: 25/08/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of the Commissioner Of Income Tax- Appeals -26 Delhi [hereinafter referred to as “Ld. CIT(A))”] vide order dated 13-12- 2024 pertaining to A.Y. 2014-15 arising out the assessment order u/s.147 r.w.s. 143 of the Income-tax Act, 1961, (in short ‘the Act’).

2.

The assessee has raised the following grounds in appeal as under:

1. The CIT(A) has erred in law and facts in upholding the reassessment proceedings initiated under section 147 of the Income Tax Act 1961, without any valid reason to believe that income had escaped assessment.

2. The CIT(A) has failed to consider that the reassessment proceedings were mechanically initiated without proper verification and enquiry, contrary to the principles laid down under the law.

3. The CIT(A) has wrongly upheld the addition of Rs. 3,74,07,986/- despite the fact that the sale consideration of agriculture land was duly reported and capital gain was exempt under section 54B of the Income Tax Act 1961.

4. The CIT(A) erred in ignoring the reply filed by appellant on 07- 10-2024, which contained all necessary facts and explanations in response to the show cause notice.

5. The CIT(A) has erred in concluding that the appellant did not participate in the appellate proceedings despite the submission of the reply and documentary evidence on record.

6. The CIT(A) has acted in violation of the principles of natural justice by not providing the appellant with a fair opportunity to present its case.

7. The CIT(A) has erroneously confirmed the addition without considering the fact that the sale deed for the agriculture land clearly evidenced that the capital gain was not taxable as per the provisions of the Income Tax Act. 8. The impugned order is contrary to the law and deserves to be quashed. 9. The assessee seeks leave to add to modify forego or otherwise alter all or any of the grounds of appeal as herein- above.

3. The brief facts of the case are that the assessee engaged in the business of commission agency and trading. The assessee had executed the sale deed of the agriculture land along with five other co-owners and the sale consideration was disclosed in the registered sale deed. The assessing officer initiated the proceeding under section 147 of the Act and assessed the income of the assessee at Rs. 4,58,46,164/ - after making the addition of Rs. 3,74,07,986/-. 4 Aggrieved the order of the ld. AO the assessee preferred the appeal before the Ld. CIT (A) who vide his order dated 13-12-2024 dismissed the appeal. Being aggrieved the order of the Ld. CIT(A) the assessee is in appeal before the Tribunal. 5. ld. AR of the assessee submitted that the Ld.CIT(A) passed the ex-parte orders. He also submitted that the opportunity of the being heard be provided to the assessee. Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the Ld. CIT(A).

6.

We have heard the parties and perused the material available on record. It is an admitted fact that despite opportunities granted by Ld. CIT (A), the assessee did not file his submissions, for which the appeal was dismissed in non-compliance by the Ld. CIT(A).

7.

Since in the instant case the assesse has failed to file his submission after availing the various opportunity. The assessee did not appear before the lower authorities. The Ld. CIT(A) dismissed the appeal in non-compliance after deciding the grounds raised by assessee. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. Assessing officer with a direction to grant one final opportunity to the assessee to substantive its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. Assessing officer and co-operate in the proceedings. The grounds raised by the assessee are accordingly allowed for statistical purposes.

8.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court 25.08.2025.

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