RAJ KUMAR,DELHI vs. INCOME TAX OFFICER WARD 45(1), DELHI, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3396/Del/2026 (Assessment Year : 2014-15) Raj Kumar Vs. ITO A-2/71, Rajouri Garden Ward – 45(1) New Delhi – 110 027 Delhi PAN No. AQIPK 9061 K (APPELLANT) (RESPONDENT) Assessee by Shri Nitin Gulati, Adv. Revenue by Shri Balkishan Gopal, Sr. D.R. Date of hearing: 29.07.2026 Date of Pronouncement: 03.08.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :

The instant appeal filed by the assessee is directed against the order dated 30.01.2026 passed by Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)/NFAC], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, ‘Act’] assessment order passed on 18.05.2023 under section 147 r.w.s. 144B of the Income Tax Act, 1961 for the Assessment Year 2014-15.

ITA No. 3396/DEL/2026 [A.Y 2014-15] Raj Kumar vs. ITO 2. Assessee filed the following grounds of appeal as under: 1. “Prevention by Sufficient Cause in Filing Reply The Appellant/Assessee submits that he was prevented by sufficient cause from filing a comprehensive reply within the initial stipulated time. The matter pertains to transactions from the Financial Year 2013-14; consequently, the process of retrieving decade-old bank statements, sale deeds, and construction vouchers (such as those from KONE Elevators and Singla Iron Store) from various archives was a time-consuming exercise. The delay was unintentional and solely due to the logistical challenges of substantiating the indexed cost of acquisition and cost of improvement. 2. Failure to Provide Reasonable Opportunity of Being Heard It is submitted that the National Faceless Appeal Centre (NFAC)/Assessing Officer failed to provide a final opportunity to produce the documents after the notice dated 17-03-2023. While the assessment order was passed on 18-05-2023, no "Show Cause Notice" with a draft assessment order-as mandated under the Faceless Assessment Scheme-was effectively served to allow the assessee to rebut the proposed additions of ₹53,00,000/-. Proceeding to finalize the assessment without allowing the Assessee to upload the collected evidence constitutes a procedural lapse. 3. Violation of the Principles of Natural Justice The Impugned Order passed u/s 144B is in gross violation of the Principles of Natural Justice (Audi Alteram Partem). The authorities appear to have acted in haste because the matter was approaching the limitation deadline. However, the pressure of a time-barring date (31.03.2024) does not grant the Revenue the right to bypass statutory requirements of providing a fair hearing. A "reasonable opportunity" is a mandatory requirement, not a discretionary one, and its absence renders the order voidable. 4. Request for Opportunity to Explain Facts The Appellant prays that the matter be remanded or that the present appellate authority co- terminally exercise the powers of the Assessing Officer to examine the following documents now in possession of the Assessee: Purchase Deed dated 20-07-2005 (Cost of 6,48,000/-). Evidence of Cost of Improvement/Construction at Tilak Nagar (Approx. ₹47,37,857/- Bank Statements from Indian Overseas Bank (Nehru Market) correlating the sale proceeds. 5. Reservation of Rights The Appellant reserves the right to add, alter, amend, or forgo any ground(s) of appeal at the time of the hearing.”

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ITA No. 3396/DEL/2026 [A.Y 2014-15] Raj Kumar vs. ITO 3. Brief facts of the case are that the assessee is an individual who filed his return of income for the Assessment Year 2014-15. The assessee was the absolute owner of a residential property bearing Flat No. 1085, GH-13, Paschim Vihar, New Delhi, which was acquired on 20.07.2005 for a total consideration of ₹6,48,000/- (including stamp duty). The said property was sold on 09.10.2013 for a registered sale consideration of ₹53,00,000/-. Since the property was held for more than 36 months, the resulting gain was a Long-Term Capital Gain (LTCG). The assessee with the intent to avail exemption under Section 54, invested the sale proceeds into the construction of a new residential house at 23/88-AB, Tilak Nagar, New Delhi. The total investment towards land and construction amounted to approximately ₹47,37,857/-, supported by bank entries (Indian Overseas Bank) and invoices from vendors like Singla Iron Store and KONE Elevators. The assessment was reopened under Section 147 and finalized under Section 144B on 18.05.2023, wherein the Ld. Assessing Officer (AO) treated the entire sale consideration of ₹53,00,000/- as Short-Term Capital Gain (STCG), denying the benefit of indexed cost of acquisition and exemption u/s 54. The Ld. CIT(A), NFAC, vide order dated 30.01.2026, sustained the additions. The Ld. CIT(A) held that since

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ITA No. 3396/DEL/2026 [A.Y 2014-15] Raj Kumar vs. ITO construction started on 31.10.2012 (prior to the sale), the exemption was not available. Now, assessee is before us. 4. At the outset, learned Counsel of the assessee stated that the assessee has filed a petition for admission of additional evidence under Rule 11 of the Income Tax (Appellate Tribunal) Rules 1963 wherein he has challenged the validity of notice u/s 148 being barred by limitation. The ld AR stated that the AO had issued notice u/s 148 of the Act on 23.07.2022 which is time barred in the light of the decision of the hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal, [2024] 469 ITR 46 (SC). 5. Per contra the ld DR relied on the orders of the AO/CIT(A)/NFAC. 6. We have heard the rival submissions and have perused the material on record. It is an admitted fact that the assessee was initially issued notice u/s 148 dated 28.05.2021 which in terms of TOLA and CBDT instruction, left surviving period of 33 days in terms of the decision of hon’ble Supreme Court in case of Rajeev Bansal. Subsequently, in accordance with Hon’ble Supreme Court judgement in the case of Ashish Agarwal, the assessee was issued a show cause notice u/s 148A(b) on 18.05.2022 wherein the assessee sought adjournment. The assessee filed a detailed submission on 06.06.2022. The surviving period of 33 days, for passing order u/s 148A(d) and

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ITA No. 3396/DEL/2026 [A.Y 2014-15] Raj Kumar vs. ITO issuance of notice u/s 148 of the Act, commenced from 06.06.2022 which expired on 09.07.2022. We find that the AO passed an order u/s 148A(d) as well as the notice u/s 148 was issued on 23.07.2022. Thus, the AO has exceeded the surviving period, for issuance of notice u/s 148, in accordance with the decision of Supreme Court in case of Rajeev Bansal. The notice u/s 148 of the Act is therefore quashed being barred by limitation. Accordingly, the resultant reassessment order u/s 147 is also rendered unsustainable in the eyes of law. The additional ground is allowed. 7. In the result, appeal of the assessee ITA No. 3396/Del/2026 is allowed. Order pronounced in the open court on 03.08.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 03.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 5 of 6