USHA BHARDWAJ (LEGAL REPRESENTATIVE OF RAVINDER NATH BHARDWAJ),NOIDA vs. INCOME TAX OFFICER, WARD 5(3)(1), GAUTAM BUDH NAGAR, GAUTAM BUDH NAGAR, NOIDA
Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI AVDHESH KUMAR MISHRA
PER AVDHESH KUMAR MISHRA, AM The appeal for the Assessment Year (‘AY’) 2012-13 filed by the assessee is directed against the order dated 31.07.2024 of the Ld. Commissioner of Income Tax (Appeals), NFAC, New Delhi [‘CIT(A)’]. 2. The assessee has raised following grounds of appeal: - “1. That in view of the facts and circumstances of the case and in law, the rectification order dated 03.03.2021 passed under Section 154 r.w.s 144/147 of the Income Tax Act, 1961 ('the Act') by Assessing Usha Bhardwaj
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Officer ('AO') for Assessment Year ('A.Y.') 2012-13 is illegal, bad in law, without juri iction, without application of mind and deserved to be quashed. The National Faceless Appeal Centre, Delhi ('NFAC') vide order dated 31.07.2024 passed under Section 250 of the Act has also erred in upholding the said order.
2. That in view of the facts and circumstances of the case and in law, the notice dated 29.03.2019 issued under Section 148 of the Act and the assessment order dated 14.12.2019 passed under Section 144/147 of the Act and the addition made is illegal, bad in law, without juri iction, barred by limitation and deserved to be deleted.
3. That in view of the facts and circumstances of the case and in law, the AO has erred in law and facts in not deleting the additions and in not allowing the deduction, in view of the Application filed by the Appellant under Section 154 of the Act and the NFAC/CIT(A) was also erred in upholding the said order.
4. That, without prejudice and in view of the facts and circumstances of the case and in law, the AO has erred in not rectifying the order on account of the indexed Cost of acquisition whereas it is clearly mentioned in the Assessment order that the same is rectifiable on the actual basis. Hence, the orders of AO and NFAC are illegal, bad in law and contrary to the record.
5. That, without prejudice and in view of the facts and circumstances of the case and in law, the AO has erred in not considering the ITR filed by the Appellant for the year under consideration, in which the Appellant had disclosed the sale consideration received of Rs. 1,15,00,000/- under the head long term capital gain and claimed deduction under Section 54 of the Act. The mistake should have been rectified under Section 154 of the Act.
6. That, without prejudice and in view of the facts and circumstances of the case and in law, the AO and NFAC has erred in not considering that there are total of 4 owners of the property as per the sale deed and the amount is equally divided amongst them. Hence, the action of the AO is illegal, bad in law and contrary to the record.
The mistake should have been rectified under Section 154 of the Act.
Usha Bhardwaj
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7. That the evidence filed and materials available on record have not been properly construed and judiciously interpreted.
8. The impugned order as well as the order of the NFAC have been based on surmises and conjectures.
9. That, in view of the facts and circumstances of the case, the AO has erred in passing the impugned order dated without giving the Appellant a reasonable opportunity of being heard and the same is in clear violation of principles of natural justice.
10. The appellant craves leave to add, alter, modify or delete one or more grounds of appeal before or at the time of the hearing of appeal.”
3. The relevant facts giving rise to this appeal are that the appellant assessee, retired from the Air force, expired on 13.02.2024. He filed his original Income Tax Return (‘ITR’) of the relevant year on 17.07.2013
declaring income of Rs.5,64,390/-. In the original ITR, assessee had declared Long Term Capital Gains (‘LTCG’) derived from the sale of residential house at Rs.49,78,498/- and claimed deduction under section 54 of the Income Tax Act, 1961 (‘Act’). Later on, the case of the assessee was reopened on the reasoning that the income derived on sale of the immovable property worth Rs.8,25,00,000/- during the relevant year has not been offered for tax by the assessee. The Ld. Assessing Officer (‘AO’) conducted a preliminary inquiry in respect of the sale consideration of the house property directly from the assessee. However, in absence of any compliance on the part of the assessee, the Ld. AO reopened the case vide notice dated 29.03.2019. Subsequently, various statutory notices were issued; however, the same remained uncompiled with. Hence, the Usha Bhardwaj
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assessment was completed exparte on 14.12.2018 assessing the LTCG at Rs. 6,18,75,000/- instead of Nil income declared by the assessee as under:
Sale consideration
= Rs. 8,25,00,000/-
(as per provisions of Sec. 50C)
Less: Indexed cost of acquisition
= (-) Rs. 20625000/-
Net Long Term Capital Gain
= Rs. 6,18,75,000/-
The assessee did not file any appeal against the above-mentioned assessment order. 5. Later, the assessee filed a rectification application under section 154 of the Act before the Ld. AO stating that the Ld. AO was aware of the assessee’s share in the said property (as the assessee’s share had not been duly mentioned in the reasons recorded for the reopening the case) and furthermore, the AO had not given any basis for working out the indexed cost of acquisition of Rs.2,06,25,000/-. It was stated by the assessee that he owned only one-fourth share in the said property, as the same was inherited by him from his father late Shri Prem Nath Bhardwaj (four co- owners as per the assessee’s submission and sale deed: Mr. N. N. Bhardwaj, Mr. S. N. Bhardwaj, Smt. Arti Bhardwaj and Sh. R. N. Bhardwaj (assessee). The assessee contended that the sale deed was registered for the sale consideration of Rs.4,60,00,000/- as against the circle rate of Rs.8,25,00,000/- on the date of registration. In the said application filed under section 154 of the Act, it was stated that the said property was transferred vide agreement to sell dated 31.01.2011 for Rs.4,60,00,000/- though the sale deed was executed on 30.11.2011. Meanwhile the circle Usha Bhardwaj
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rate was revised on 04.02.2011 (double of the old circle rate), which resulted upward revision of the circle rate of the property. In case the old circle rate would have been taken, the LTCG would have not arisen. Thus, there was no capital gains evasion and the reopening was unjustified.
However, the petition filed under section 154 of the Act was rejected.
Dissatisfied with the rejection of rectification application under section 154 of the Act, the assessee filed appeal before the Ld. CIT(A), which was dismissed on the reasoning that finding due to non-compliance before the Ld. AO could not be overcome by any revision/rectification under section 154 of the Act as there was no mistake apparent from the record.
The issue before us is that whether the said assessment order under section 144 of the Act is rectifiable order under section 154 of the Act.
The Ld. Counsel reiterated the facts narrated in the assessee’s application filed under section 154 of the Act and contended that the same could be rectified under section 154 of the Act as the Ld. AO himself in para 3 of the assessment order while computing LTCG, had categorically mentioned that the cost of acquisition is rectifiable on actual basis. The relevant part of the assessment order reads as under: “3.……In absence of any compliance and complete information regarding area, and year of acquisition of property sold, Indexed cost of acquisition is being taken at Rs.2,06,25,000/-. Same is rectifiable on actual basis……...” Usha Bhardwaj
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Further, it was submitted that the entire computation clearly mentioned that the Ld. AO was in possession of the transfer deed wherein the name of all co-owners of the property was duly disclosed. Hence, the Ld. AO should have worked out the proper indexation and cost of acquisition as per the law.
Further, we note that this appeal has been filed by the wife of the deceased assessee as a legal heir. However, the details showing the name of legal heir have not been filed before us. It has been categorically admitted by Smt. Usha Bhardwaj, Mr. Nipun Bhardwaj (Son of the deceased assessee) and Mrs. Ritika Dhawan (daughter of the assessee) that the family pension of late Shri R.K. Bhardwaj, assessee is being received exclusively in the bank account of Smt. Usha Bhardwaj (wife of the assessee). However, the assets belonging to the deceased assessee has been inherited by the wife and son of the assessee. 10. On the other hand, the Ld. Sr. DR contended that the Ld. AO had recorded reasons for reopening the assessment. He submitted that the Ld. Counsel had not brought any material on the record to contradict the finding of the Ld. AO and to demonstrate that the said reopening of the case, in consistent non-compliance on the part of the assessee, was not justified. It was submitted that the assessee did not bring corroboratory evidence before the Ld. AO, to demonstrate that there was NIL LTCG; therefore, the AO was justified in reopening the assessment. Further, on Usha Bhardwaj
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merit, the Ld. Sr. DR, drawing our attention to the assessment order, submitted that reasonable opportunities of being heard were provided to the appellant assessee by the Ld. AO. However, the appellant assessee tactfully ensured noncompliance to avoid proper investigations. Hence, he prayed for upholding of the orders of the Authorities below. On specific query by us, he admitted that the issue in dispute had not been decided on merit by the Ld. AO as he had categorically mentioned that the cost of acquisition is rectifiable on actual basis.
11. We have heard both parties and have perused the material available on the record. We take note of the fact that the Ld. AO had not assessed the actual income. We are of the considered view that the rider in para 3 of the assessment order: “3.……In absence of any compliance and complete information regarding area, and year of acquisition of property sold, Indexed cost of acquisition is being taken at Rs.2,06,25,000/-. Same is rectifiable on actual basis……...” provides the scope of revision/rectification under section 154 of the Act. The tax has to be levied on the actual income as per the law. Considering the facts in entirety and without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. AO for deciding the case afresh/denovo, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. Ordered accordingly.
The appellant assessee, no doubt, shall cooperate in remitted proceedings.
Usha Bhardwaj
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12. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in open Court on 31th July, 2025 (SATBEER SINGH GODARA) (AVDHESH KUMAR MISHRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 23/10/2025
Binita, Sr. PS