SHUBHASH CHANDRA ,JAUNPUR vs. ADDL./JT./DY./A.C.I.T., ITO, NFAC, DELHI

PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the Assessee against the order dated 12.03.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2016-17.

2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. On the basis of information available with the Income Tax Department that the assessee had purchased and sold immovable property during the year under consideration, the case of the assessee for the assessment year under consideration was reopened by issuing Notice under section 148 read with section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act’). However, the assessee did not respond to the Notice

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issued by the Assessing Officer (AO) under section 148 of the Act. As per information received from Intelligence and Criminal Investigation (I&CI) of the Income Tax Department, Lucknow through its insight portal, the assessee along with others had purchased a property during the year under consideration for a consideration of Rs.20,00,000/- and the Circle Rate of the said property was Rs.1,47,00,000/-. In addition, as per the information, the assessee had also sold an immovable property for a consideration of Rs.25,00,000/- and the Circle Rate of the same was Rs.1,08,00,000/-. Since there was no response from the side of the assessee to the notices issued by the AO, the AO proceeded to complete the assessment on the basis of Best Judgment Assessment. While completing the assessment under section 147 read with sections 144 and 144B of the Act, the AO treated the amount of Rs.2,55,00,000/- (Rs.1,47,00,000/- being the Circle Rate of the immovable property purchased and Rs.1,08,00,000/- being the Circle rate of property sold by the assessee) during the year under consideration as his undisclosed income and added the same to the total income of the assessee under section 56(2) of the Act.

2.1 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and sustained the addition made by the AO. However, the Ld. First Appellate

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Authority observed that the addition of Rs.1,08,00,000/- on the property sold by the assessee, provisions of section 50C of the Act are applicable and, accordingly, he modified the incorrectly quoted section with section 45 read with section 50C of the Act.

2.2 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

1-That the Ld. CIT(A) NFAC erred on facts and In law passing ex parte order without considering that there was a reasonable cause for non-compliance being service of notice on email-Id which did not belong to the Assessee. 2-That the authorities below erred on facts and In law In not considering that the assesse Is a farmer residing in rural area of village Siddiqpur, Jaunpur and not having any knowledge of faceless proceedings digital eco-system where notices are received on email-Id and posted on ITBA. WITHOUT PREJUDICE TO ABOVE 3-That the reopening is bad in law as the reasons are only reasons to suspect and not reasons to believe. 4-That the authorities below erred on facts and in law In not considering that mere purchase of Immovable property does not amount to escapement of Income and thus reasons are only reasons to suspect. WITHOUT PREJUDICE TO ABOVE 5-That the Ld. CIT (A) erred on facts and in law In not considering that the property purchased Is an agriculture

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land and the provisions of section 56(2)(vii)(b) do not apply to agricultural land as it is not a capital asset as per meaning of 'property' given in Explanation and thus addition of Rs.1,47,00,000/- is Incorrect and liable to be deleted. WITHOUT PREJUDICE TO ABOVE 6-That the Ld. CIT (A) erred on facts and in law In not considering that under section 56(2) (vii)(b) only the difference In consideration and stamp value is the deemed Income for the purpose of section 56(2) and thus the entire purchase cost of Rs.4.47Crore could not have been treated as Income under section 56(2)(vii) (b). 7-That the Ld. CIT (A) further erred on facts and in law in not considering that the Assessee is a co-owner along with three other co-owners of property and thus no addition could have been made for entire value of property and only 1/4th share of difference in consideration and stamp value being Rs.31,75,000/- only could have been treated as deemed Income under section 56(2) (vii)(b). 8-That the Ld. CIT (A) erred on facts and in law in not considering that the Sale deed of Immovable property was executed and registered on 28-07-2016 with Sub-Registrar (Sadar), Jaunpur i.e in Financial year 2016-17 relevant to AY 2017-18 and thus no addition could have been made u/s 50C for amount of Rs.1,08,00,000/- In AY 2016-17. 9-That the Ld. CIT (A) failed to appreciate that the sale deed dated 28-7-16 was available on record before the authorities and thus no addition by invoking Section 50C could have been made in AY 2016-17.

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10-That the present addition is highly excessive, contrary to the facts, law and principle of natural Justice and without providing sufficient time and opportunity to have Its say on the reasons relied upon by lower authorities.

2.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there is a delay of 284 days in filing the appeal before the Tribunal. He further submitted that the assessee had filed an application dated Nil for condonation of delay, duly supported by the an Affidavit, stating therein that all the notices issued during the faceless appeal proceedings were issued on the e-mail id of the assessee’s local Counsel, who never informed the assessee about the notices/appellate order served on his e-mail id and it was only when the Jurisdictional AO telephonically apprised the assessee about the outstanding demand raised by the Department, that the assessee came to know about the passing of the impugned order by the Ld. First Appellate Authority and immediately thereafter the appeal was filed before the Tribunal. The prayer of the Ld. A.R. was that the delay caused in filing the appeal was not deliberate and that it was beyond the control of the assessee, which may please be condoned and the appeal be heard on merits.

2.3 The Ld. Sr. D.R. objected to the delay being condoned.

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2.4 In view of the prayer made by the Ld. A.R., we condone the delay in filing of the appeal and admit the appeal for hearing.

3.0 The Ld. A.R. submitted before us that the NFAC has passed an order ex-parte qua the assessee, arbitrarily upholding the order passed by the AO. The Ld. A.R. further submitted that the AO had not allowed adequate opportunity of being heard to the assessee and had passed the impugned assessment order under section 147 read with section 144 of the Act, without bringing on record any material in support of the addition which was made on the basis of presumption and surmises only. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the AO for deciding the same afresh after providing reasonable opportunity of being heard to the assessee. He submitted that the assessee undertakes to produce all the relevant documents in support of the purchase and sale of the immovable property, before the AO.

4.0 The Ld. Sr. D.R. objected to the restoration of appeal to the file of the Assessing Officer and submitted that the appeal of the assessee be dismissed.

5.0 We have heard both the parties and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the assessee deserves one last

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opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present his case along with necessary evidences in support of the purchase and sale of immovable property. We also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.

6.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 23/07/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:23/07/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order

Assistant Registrar/DDO