KHEMA GANJU,PUNE vs. ITO-WARD 1(4)-FARIDABAD., FARIDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. S. Rifaur Rahman, Accountant Member & Sh. Raj Kumar Chauhan, Judicial Member ITA No. 2343/Del/2026 : Asstt. Year: 2012-13 ITA No. 2344/Del/2026 : Asstt. Year: 2012-13 Khema Ganju, Vs Income Tax Officer, C/o CA M. R. Sahu, Ward-1(4), House No. 651, 1st Floor, Sector-10A, Faridabad-121002 G. D. Goenka Public School, Gurgaon-122001 (APPELLANT) (RESPONDENT) PAN No. AANPG0271G Assessee by: Sh. M. R. Sahu, CA Revenue by: Sh. Tarun Sharda, Sr. DR Date of Hearing: 25.06.2026 Date of Pronouncement: 18.09.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeals of the assessee are directed against orders of even dated 20.01.2026 passed by ld. CIT(A)/NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein in the quantum proceedings appeal was dismissed and in the penalty proceedings, the penalty imposed by the Assessing Officer was also confirmed.

2 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju decision, the same are being disposed off accordingly. ITA No. 2343/Del/2026 is taken as lead case.

3 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju notice u/s 142(1) of the Act was issued on 03.10.2019 followed by final show-cause notice dated 15.11.2019 and were sent by speed post. Since, the assessee has not complied to the statutory notices and show-cause letter, the AO was left with no option and completed the assessment ex-parte u/s 144 of the Act. Accordingly, the assessment was completed by making addition of Rs. 50,00,000/- by assessing the total income of the said amount as the returned income was Nil and penalty proceeding u/s 271(1)(c) of the Act were also initiated separately.

4 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju Tax Act Rules, 1962 stated that the appellant failed to demonstrate any sufficient cause which prevented her from producing such evidence during the assessment proceedings despite the adequate opportunity having been provided. It was therefore submitted that the condition prescribed under Rule 46A(1) were not satisfied and additional evidence deserved to be rejected. The ld. CIT(A) considered the remand report to be true and correct and rejected the request for leading additional evidence under Rule 46A. It was observed that the remand report clearly established that opportunities were provided and valid service of notices were effective and therefore, due to non-compliance, even the assessee was not entitled to the compassionate and sympathetic consideration even on the grounds of COVID-19 related hardships. The appeal was accordingly dismissed.

5 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju assessee-appellant prays that the addition of Rs.50,00,000/- u/s. 69 deserves to be deleted in full. 2. That on the facts, circumstances of the case and in law, the Ld.CIT(A) has erred in confirming the jurisdiction of the AO for initiating income escaped assessment u/s. 147 against the assessee, and failed to consider the fact that transfer of residential house property and investment u/s.54, u/s.54EC was duly reflected on the face of the return of income and accepted by the AO, thus the AO has no tangible material to form reason to believe for income escapement assessment, accordingly the assessee-appellant prays that the jurisdiction u/s. 147 assumed by the AO may kindly be held as invalid, hence the consequential reassessment order vitiated in law and liable to be quashed. 3. That the appellant craves leave to adduce additional grounds and/ or amend or withdraw any of the aforesaid Grounds before or at the time of hearing of appeal.” 6. We have heard the ld. AR and the ld. DR. The ld. AR, at the very outset submitted that admittedly the assessment order is ex-parte and the assessee has not received the notice and even the copy of the assessment order and there is no evidence/material in that regard that the notices sent during the assessment proceedings were ever served upon the assessee. It is further submitted that even the impugned order by the ld. CIT(A) is an un-reasoned order and has been passed in violation of section 250(6) of the Act because the ld. CIT(A) has simply relied the remand report while dismissing the appeal and did not decide the issue after considering the additional evidence sought to be led by the assessee. It is therefore prayed that the matter may be restored to the file of the ld. AO for deciding afresh after giving effective opportunity of hearing.

6 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju 7. We have heard the ld. DR who while relying upon the order of the ld. lower authority had submitted that it is the assessee who has failed to avail the opportunity given by the Assessing Officer during the assessment proceedings and the ld. CIT(A) has rightly relied the remand report and therefore rightly dismissed the appeal out rightly.

7 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju relevant to A.Y. 2012-13. Such information constituted tangible material for formation of belief that income chargeable to tax had escaped assessment. The Ld.AO has duly recorded reasons to believe and thereafter issued notice under section 148 of the Act. Therefore, the initiation of reassessment proceedings cannot be said to be without jurisdiction or based on mere suspicion. 6.1.7. The appellant’s contention that no notice under section 147 r.w.s. 148 or subsequent notices were received has been specifically examined in the remand proceedings. The Ld.AO, in the remand report, has categorically stated that statutory notices were issued to the appellant through multiple modes, including speed post at the addresses available on record and through electronic mode on the registered email address of the appellant. The remand report further records that electronic delivery reports confirmed successful delivery of notices. In addition, during penalty proceedings, physical service of notices was attempted through the Verification Unit, and the Inspector reported that the appellant was available at the given address but refused to accept the notices. In law, refusal to accept service amounts to valid service. Therefore, the plea of non- service of notices raised by the appellant is not acceptable. 6.1.8. Further, the appellant has contended that she was residing outside India during the relevant period and was therefore unable to comply with notices. However, the remand report, after verification of passport details furnished by the appellant herself, establishes that the appellant was present in India during part of the assessment period when statutory notices were issued. Thus, the claim of continuous absence from India during the entire assessment proceedings is factually incorrect. Even otherwise, service of notices through electronic mode is a valid mode of service under the Act, and physical presence in India is not a precondition for compliance. 6.1.9. As regards the allegation that the assessment was framed mechanically and without application of mind, the remand report demonstrates that the Ld.AO initiated proceedings based on specific information, issued statutory notices, and resorted to best judgment assessment only after persistent non-compliance by the appellant. Section 144 of the Act empowers the Ld.AO to complete assessment to the best of his judgment where the assessee fails to comply with statutory notices. In the present case, the appellant admittedly did not furnish any explanation or documentary evidence during the

8 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju assessment proceedings. Therefore, the Ld.AO was left with no alternative but to complete the assessment on the basis of material available on record. The action of the Ld.AO, thus, cannot be termed as mechanical or arbitrary. 6.1.10. The appellant has strongly contested the addition of Rs. 50,00,000/- under section 69 of the Act, contending that the said amount represented investment in NHAI bonds made out of disclosed long-term capital gains and was already reflected in the return of income. However, as noted by the Ld.AO in the remand report, mere filing of a return of income does not automatically discharge the onus cast upon the appellant under section 69 when a specific query is raised regarding the nature and source of investment. The appellant failed to respond to notices and did not furnish any contemporaneous evidence during the assessment proceedings to substantiate her claim. The explanation sought to be advanced during appellate proceedings was not supported by sufficient cause for non-production of evidence at the assessment stage. 6.1.11. In this context, the Ld.AO has rightly objected to the admissibility of additional evidences under Rule 46A of the Income Tax Rules, 1962. The appellant has not been able to demonstrate that she was prevented by sufficient cause from producing such evidences before the Ld.AO. Adequate opportunities were provided during the assessment proceedings, which the appellant chose not to avail. Therefore, the rejection of additional evidences, as recommended in the remand report, is found to be in accordance with law. 6.1.12. The appellant has also relied on various judicial precedents to contend that section 69 cannot be invoked merely on suspicion. While the legal position is well settled, the facts of the present case clearly indicate that the addition was not made on suspicion alone, but on the basis of specific information and failure of the appellant to explain the source of investment despite repeated opportunities. The burden under section 69 initially lies upon the appellant, and in the absence of any explanation furnished during assessment proceedings, the Ld.AO was justified in invoking the deeming provisions. 6.1.13. With regard to the appellant’s plea seeking sympathetic consideration on account of advanced age, widowhood, and Covid-19 related hardships, it is acknowledged that these circumstances deserve empathy. However, it is equally well settled that personal

9 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju hardships, howsoever genuine, cannot override statutory obligations cast upon a taxpayer. The remand report clearly establishes that opportunities were provided and valid service of notices was effected. Therefore, the non-compliance cannot be condoned solely on compassionate grounds. 6.1.14. The application of section 115BBE by the Ld.AO is a consequential statutory mandate once income is assessed under section 69. The Ld.AO has correctly computed tax liability in accordance with the provisions of the Act, and no infirmity has been pointed out in the computation itself. 6.1.15. In view of the detailed findings recorded in the remand report, which effectively rebut the contentions raised by the appellant, I am of the considered opinion that the Ld.AO has followed due process of law and that the assessment order does not suffer from any legal or factual infirmity warranting interference. The reassessment proceedings were validly initiated, adequate opportunities were provided, and the addition was made only after the appellant failed to discharge the onus cast upon her under the Act. Accordingly, Ground Nos. 1 to 6 raised by the appellant are dismissed, and the assessment order passed by the Ld.AO under section 144 r.w.s. 147 of the Income Tax Act, 1961, including the addition of Rs. 50,00,000/- under section 69 and consequential tax levied under section 115BBE, is hereby confirmed. 7. In result, the appeal is filed by the appellant is dismissed.” 9. The above contents of the impugned order shows that the ld. CIT(A) has not passed the reasoned order as per the requirement of section 250(6) of the Act. The ld. AO has not given any sufficient reasons in the remand report relied by ld. CIT(A) for rejecting the additional evidence sought to be led under Rule 46A of the Act by the assessee. Admittedly, there is no material or evidence produced before us to show that the notices sent through speed post were ever served/received by

10 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju the assessee during the assessment proceedings. In these facts and circumstances, we are of the considered opinion that the assessment order has been passed without giving effective opportunity of hearing. The ld. CIT(A) in appeal has failed to consider the said aspect and in our opinion has wrongly rejected the request of additional evidence under Rule 46A of the Act by simply relying the remand report of the AO. Even the request of the assessee for COVID-19 related hardships has been rejected without any reasons and consideration. For these reasons, the impugned order dated 20.01.2026 is accordingly set aside as the principle of natural justice has not been followed while completing the assessment proceedings and deciding the appeal by the ld. CIT(A). The matter is accordingly remitted to the file of the AO for de-novo assessment proceedings after giving effective opportunity of hearing. The assessee/appellant shall furnish necessary evidence, materials and submissions before the AO within a period of 60 days from this order.

11 ITA Nos. 2343 & 2344/Del/2026 Khema Ganju adjudication if required in accordance with law, after affording adequate opportunity of being heard to the assessee.