SANGITA,VARANASI vs. INCOME TAX OFFICER - 2(1), VARANASI

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.28/VNS/2025 Assessment Year: 2017-18 Sangita v. ITO-2(1) N-14/20, Sarai Nandan Varanasi Varanasi (U.P) TAN/PAN:FELPS8152D (Applicant) (Respondent) Applicant by: Shri Faizanullah, C.A. Respondent by: Shri Sudipta Paul, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 13.12.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee had not filed the return of income as prescribed under section 139(1) of the Income Tax Act, 1961 (hereinafter called 'the Act’). On the basis of information with the Income Tax Department that, during the year under consideration, the assessee had purchased an immovable property for a consideration of Rs.25,74,43,960/- and had also sold an immovable property for an amount of Rs.28,63,13,160/-, the case of the assessee was reopened under section 147 of the Act after issuing notice under section 148 of the Act to the assessee. In response to notice under section 148

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of the Act, the assessee filed her return of income on 23.04.2021 declaring a total income of Rs.1,99,570/- after claiming deduction of Rs.1,51,668/-. The Assessing Officer (AO) issued statutory notices, requiring the assessee to furnish the details pertaining to purchase of the immovable property. In response, the assessee, vide her replies dated 04.03.2022 and 08.03.22, submitted that the assessee had only one property, purchased on 02.09.2016 for Rs.23,00,000/- and she also furnished a copy of the Sale Deed. From the Sale Deed, it was noticed by the AO that the Stamp Duty Value mentioned therein was Rs.36,73,000/-. The AO further issued notice under section 142(1) of the Act, requiring the assessee to furnish the source of investment of Rs.23,00,000/- with complete documentary evidences and also to explain as to why the deemed income as per the provisions of section 56(2)(x) of the Act may not be added to the total income of the assessee. In response to this notice, the assessee filed her reply on 14.03.2022. After considering the reply of the assessee, the AO held that the assessee could not explain the source of investment in immovable property of Rs.23,00,000/- and, therefore, he added Rs.23,00,000/- to the total income of the assessee under section 69 of the Act.

2.1 The AO further noted that the assessee could not submit any logical explanation with regard to the applicability of

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provisions of section 56(2)(x) of the Act. Therefore, as per provisions of section 56(2)(x) of the Act, the amount of Rs.13,72,629/- (Rs.36,72,629 – 23,00,000) was treated as income from other sources and was added to the total income of the assessee.

2.2 The AO completed the assessment under section 147 read with sections 144/144B of the Act, assessing the total income of the assessee at Rs.38,72,199/-.

2.3 Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority. Subsequently, the appeal was migrated to NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO.

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

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rely upon the averments made in the Statement of Facts accompanying the memo of appeal itself. 12. BECAUSE, the "appellant" craves leave to put forward further grounds of appeal and/or amend/alter the same before or at the time of hearing. 3.0 At the outset, the Ld. Authorized Representative for the Assessee (Ld. A.R.) stated at the Bar that he does not wish to press the legal grounds, viz. grounds No.2 and 3. The same are, accordingly, rejected as not pressed.

4.0 The Ld. A.R. submitted that the AO had passed the order under section 147 read with sections 144/144B of the Act without affording reasonable opportunity of hearing to the assessee and had made the additions without bringing on record any material in support of the additions which were made on the basis of presumption and surmises only. It was further submitted that the NFAC too had dismissed the appeal of the assessee ex-parte qua the assessee.

4.1 During the course of hearing, the Ld. A.R. filed an application dated 06.08.2026 for admission of additional evidences in the form of copies of ITR Acknowledgements, Bank Statements and Professional Valuation Reports. He submitted that these documents contain some important facts relating to

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the case of the assessee and prayed that the same may be admitted under Rule 29 of the I.T.A.T. Rules.

5.0 The Ld. Sr. D.R. submitted that no request was made by the assessee during the assessment proceedings as well as first appellate proceedings for reference to the DVO and now the assessee is placing reliance on the Independent Registered Valuer’s Report which is not justified. He objected to the admission of the additional evidences and submitted that the appeal of the assessee may be dismissed.

6.0 In rejoinder, the Ld. A.R. submitted that necessary request was made by the assessee for making reference to the Valuation Officer as mandated by section 50C(2) of the Act, but the same was denied by the Ld. First Appellate Authority

7.0 Having gone through the additional evidence filed before me, I am of the view that this evidence goes to the very root of the matter and is germane to proper determination/assessment in the case of the Assessee. Accordingly, I admit the same.

8.0 I have heard the rival submissions and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the Assessee deserves one more opportunity to present her case and, therefore, in the interest of substantial justice, I restore this file to the Office of

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the AO with the direction to provide one more opportunity to the Assessee to present her case. I have already admitted the additional evidences filed by the Assessee in the form of copy of ITR Acknowledgements, Bank Statements and Professional Valuation Reports under Rule 29 of the I.T.A.T. Rules. The AO shall refer the matter pertaining to purchase of property by the assessee to the Departmental Valuation Officer (DVO) and then to decide the matter in accordance with law. The Assessee shall produce them before the AO during the course of set aside proceedings. I 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 material available on record even if it is ex-parte qua the Assessee.

9.0 In the result, the appeal of the Assessee stands partly allowed for statistical purposes.

Order pronounced in the open Court on 24/08/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:24/08/2026 JJ:

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