SUJATA RAVI PUNJA,MUMBAI vs. ASSESSMENT OFFICER OF INCOME TAX, NATIONAL FACELESS ASSESSMENT CENTER, DELHI

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ITA 4353/MUM/2026Status: DisposedITAT Mumbai24 June 2026AY 2013-147 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for fresh adjudication. This was due to the lack of effective participation by the assessee in reassessment proceedings and the need for detailed factual verification.

What were the facts?

The assessee claimed exemption under Section 54B for the sale of land. The Assessing Officer disallowed the exemption, stating the land was not used for agricultural purposes and the assessee failed to provide sufficient evidence. The CIT(A) upheld this decision.

What were the issues?

Whether the assessee was eligible for exemption under Section 54B and whether the reassessment proceedings were conducted properly due to the assessee's lack of participation and the need for factual verification.

Which sections of the Income-tax Act were involved?

Section 54B,Section 147,Section 144B,Section 143(3),Section 148,Section 142(1),Section 144,Section 250,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH MUMBAI

Hearing: 22.06.2026Pronounced: 24.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4353/Mum/2026 (Assessment Year: 2013-14) Sujata Ravi Punja Assessment Officer of 173/33, Chaturbhai Income Tax, National Khetsi Buildig, S. T. Vs. Faceless Assessment Road, Masjid Bunder, Centre, New Delhi. Mumbai – 400 009 Mumbai. PAN/GIR No. AABPP9372R (Applicant) (Respondent) Assessee by None Revenue by Shree Kumar C., Ld. DR Date of Hearing 22.06.2026 Date of Pronouncement 24.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is directed against the order dated 19.02.2026 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the CIT(A)"] under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] for the assessment year 2013-14, arising out of the assessment order dated 25.03.2022

2 ITA No. 4353/Mum/2026 Sujata Ravi Punja passed under section 147 read with section 144B of the Act by the National Faceless Assessment Centre[hereinafter referred to as “Assessing Officer”].

2.

The assessee has raised the following grounds of appeal:

1.

In the facts and circumstances of the case and in law, the learned CIT (A) erred in confirming an addition of Rs.42,92,000/- by not holding that the Appellant was entitled to exemption u/s 54B. 2. In the facts and circumstances of the case and in law it is submitted that the impugned capital gain was even otherwise not taxable as the same had arisen from transfer Rural Agricultural Land. 3. The learned CIT (A) erred in not appreciating that the impugned assessment order was bad in law in as much as the learned AO did not pass the mandatory draft order and did not issue show cause notice. 4. The learned CIT (A) erred in not holding that the impugned assessment made u/s 147 was bad in law and time barred. 5. The Learned CIT (A) erred in dismissing the Appeal of the Appellant without dealing with the same on merits. 6. The learned CIT (A) erred in not appreciating that the learned AO erred in levying interest u/s 234B/C. Facts of the Case

3.

Briefly stated, the facts of the case are that the assessee is an individual engaged in the business of wholesale trading and export of agricultural products. The assessee filed her return of income for the assessment year 2013-14 on 29.03.2014 declaring total income of Rs.7,01,740/-. The assessment was originally completed under section 143(3) of the Act on 10.03.2016 determining the total income at Rs. 2,24,77,740/-.

3 ITA No. 4353/Mum/2026 Sujata Ravi Punja 4. Subsequently, the assessment was reopened by issuance of notice under section 148 dated 30.03.2021 on the basis of information available with the Department that the assessee had wrongly claimed exemption under section 54B of the Act amounting to Rs. 42,92,000/-. 5. During the reassessment proceedings, the Assessing Officer noticed that the assessee had sold land situated at Haradey Village, Karnataka, for a consideration of Rs. 42,92,000/- and claimed exemption under section 54B of the Act. According to the Assessing Officer, the property had devolved upon the assessee pursuant to a partition deed executed during F.Y. 2003-04. The Assessing Officer further observed that exemption under section 54B is available only where the agricultural land transferred had been used for agricultural purposes by the assessee or her parents during the period of two years immediately preceding the date of transfer. 6. The Assessing Officer referred to the fact that the assessee had not furnished 7/12 extracts and that the certificate issued by the Gram Panchayat did not establish that agricultural activities were carried out on the land. The Assessing Officer also relied upon a statement allegedly made by the assessee during the original assessment proceedings to the effect that no agricultural cultivation had been carried out by her on the said land and no agricultural income had been disclosed in the return of income. 7. The assessment order records that notices issued under sections 148 and 142(1) of the Act were initially not complied

4 ITA No. 4353/Mum/2026 Sujata Ravi Punja with. An ex parte notice under section 144 was thereafter issued. Though certain details were subsequently furnished by the assessee, the Assessing Officer held that the assessee had failed to furnish documentary evidence establishing fulfillment of the conditions prescribed under section 54B of the Act. Consequently, exemption claimed under section 54B amounting to Rs.42,92,000/- was disallowed and added to the income of the assessee by assessment order dated 25.03.2022 passed under section 147 read with section 144B of the Act. 8. Aggrieved, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A), vide order dated 19.02.2026 passed under section 250 of the Act, upheld the action of the Assessing Officer and dismissed the appeal of the assessee. 9. When the appeal was called for hearing before us, none appeared on behalf of the assessee despite notice. We, therefore, proceeded to hear the learned Departmental Representative and peruse the material available on record. 10. The learned Departmental Representative relied upon the orders of the lower authorities. 11. We have heard the learned Departmental Representative, perused the orders of the lower authorities and considered the material available on record. 12. We find that the assessee had originally filed the return of income for the year under consideration on 29.03.2014 declaring total income of Rs. 7,01,740/-. The return was subjected to

5 ITA No. 4353/Mum/2026 Sujata Ravi Punja scrutiny assessment and an assessment order under section 143(3) of the Act was passed on 10.03.2016 determining the total income at Rs. 2,24,77,740/-. Subsequently, the assessment was reopened under section 147 of the Act and the impugned reassessment order came to be passed on 25.03.2022 under section 147 read with section 144B of the Act. 13. We further note that the reassessment proceedings substantially proceeded in the absence of effective participation by the assessee. The Assessing Officer has recorded repeated instances of non-compliance to notices issued during the reassessment proceedings and ultimately disallowed the assessee's claim of exemption under section 54B amounting to Rs.42,92,000/- primarily on the ground that the assessee had failed to furnish supporting documentary evidence establishing fulfillment of the conditions prescribed under the said provision. 14. We also find that the issues involved in the present appeal require examination of various factual aspects including the nature and character of the land transferred, the claim of agricultural operations having been carried on thereon, the assessee's eligibility for exemption under section 54B of the Act and the alternative contention that the land itself constituted rural agricultural land not exigible to capital gains tax. Adjudication of these issues necessarily requires proper examination of relevant documentary evidence and factual verification.

6 ITA No. 4353/Mum/2026 Sujata Ravi Punja 15. Significantly, the record reveals that a regular assessment under section 143(3) of the Act had already been completed prior to initiation of reassessment proceedings. However, from the material presently available before us, it is not discernible whether the issue relating to exemption under section 54B was examined during the original scrutiny proceedings, what material was available before the Assessing Officer at that stage and whether any appellate proceedings arising from the original assessment order were initiated and, if so, the outcome thereof. These factual aspects have an important bearing on the controversy involved and deserve proper examination by the Assessing Officer. 16. Considering the totality of the facts and circumstances of the case, particularly the fact that the original assessment had been completed under section 143(3) of the Act, the reassessment proceedings substantially culminated without effective participation of the assessee, and the issues involved require detailed factual verification, we are of the considered view that the ends of substantial justice would be met by restoring the matter to the file of the Assessing Officer for fresh adjudication. 17. We accordingly set aside the impugned order of the learned CIT(A) dated 19.02.2026 and restore the entire matter to the file of the Assessing Officer. The Assessing Officer shall afford adequate opportunity of being heard to the assessee and shall examine afresh all factual and legal contentions including the claim under section 54B of the Act, the alternative plea regarding

7 ITA No. 4353/Mum/2026 Sujata Ravi Punja the nature of the land transferred, and the relevance and effect of the original assessment completed under section 143(3) of the Act and any proceedings arising therefrom. Thereafter, the Assessing Officer shall pass a speaking order in accordance with law.

18.

The assessee is directed to extend full cooperation and furnish all evidences and explanations as may be called for by the Assessing Officer. We make it clear that we have not expressed any opinion on the merits of the issues involved and all contentions of both parties are left open.

19.

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

Order pronounced in the open court on 24.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 24/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

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