KARAN TALWAR,DELHI vs. ACIT CIRCLE -59(1), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 8586/Del/2025 (Assessment Year : 2016-17) Karan Talwar Vs. ACIT C-89, Preet Vihar Circle – 59(1) Delhi – 110 092 Delhi – 110 002 PAN No. ASRPT 1021 D (APPELLANT) (RESPONDENT) Assessee by Shri Arta Trana Panda, Adv. Revenue by Shri Ravi Kant Choudhary, Sr. D.R. Date of hearing: 19.05.2026 Date of Pronouncement: 19.05.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :

The captioned appeal preferred by the assessee is against the order of the learned Commissioner of Income Tax-NFAC Delhi dated 29.10.2025 arising out of assessment order passed under section 143(3) r.w.s 147 r.w.s 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.03.2022 by the AO, NFAC concerning of the Assessment Year 2016-17.

ITA No. 8586/DEL/2025 [A.Y 2016-17] Karan Talwar vs. ACIT 2. Brief facts of the case are that the assessee is an individual filed the original return of income on 29.07.2016, declaring a total income of Rs.4,49,450/-. As per the assessment order, the case was not assessed u/s 143(3) of the Act. Subsequently, the case was reopened u/s 147 of the Act on the basis of information received from the Investigation Wing regarding suspicious long-term capital gains (LTCG) from transactions in the shares of M/s Panafic Industrials Ltd., identified as a penny stock company used for accommodation entries. The AO, after issuing notices u/s 148, 142(1), and 143(2), and considering the submissions of the assessee, held that the LTCG claimed exempt u/s 10(38) was not genuine. 3. In the course of reassessment proceedings, the AO observed that the assessee had purchased 17,500 shares of Panafic Industrials Ltd. for Rs.1,75,000/- and sold them after a year for Rs. 59,03,652/-, thereby showing an astronomical return of around 3300%. The AO concluded that the transactions were sham and the sale proceeds represented unexplained cash credits u/s 68. The learned AO thus added Rs. 59,03,652/- to the total income and assessed it at Rs. 63,53,102/-. 4. Aggrieved, assessee was in appeal before the CIT(A), which the CIT(A) dismissed ex-parte on account of non-prosecution of the appeal

Page 2 of 6

ITA No. 8586/DEL/2025 [A.Y 2016-17] Karan Talwar vs. ACIT

by the assessee. Aggrieved, assessee is before us with the following grounds: 1. “That on the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals) National Faceless Appeal Centre, Delhi ["the CIT(A)-NFAC"] has erred in upholding assumption of jurisdiction under Section 148 of the Act for the assessment year 2016-17, for the pre-conditions of Sections 147 to 151 of the Income Tax Act, 1961 ('the Act') were not met. 2. That on the facts and circumstances of the case and in law, the CIT(A)-NFAC has erred in not appreciating that neither the notice under Section 148 dated 31.03.2021 bears the signature of the Assessing Officer, nor valid approval was taken from the specified authority under Section 151 of the Act, before assuming jurisdiction to reassess the income, for the assessment year 2016-17. 2.1 That the CIT(A)-NFAC erred in not appreciating that since the proceedings under Section 148 were not validly initiated, therefore, the Assessment order dated 27.03.2022 was invalid and bad in law. 2.2 Without prejudice, on the facts and circumstances of the case and in law, the CIT(A)-NFAC has erred not appreciating that the principles of natural justice were not followed, inasmuch as, neither the reasons recorded for assuming jurisdiction, nor the approval under Section 151 was provided by the Assessing Officer though the same were called for. 3. That on the facts and circumstances of the case and in law, the CIT(A)-NFAC has erred in upholding the assessment at the total income of Rs.63,53,102/-, as against declared income of Rs.4,49,450/-. The Appellant denies its liability to be assessed at the income of Rs.63,53,102/-. 4. That on the facts and circumstances of the case and in law, CIT(A)- NFAC has erred in upholding addition of Rs.59,03,652/- made under Section 68 of the Act, treating the capital gains on sale of shares of Panafic Industries Ltd as bogus. 4.1 That on the facts and circumstances of the case and in law, CIT(A)- NFAC has erred in not appreciating that on 04.02.2014, the Appellant had invested Rs.1,75,000/- to acquire 17500 equity shares of Panafic Industries Ltd and the same were sold for Rs.58,96,689/- during the financial year 2015-16 and as such, the capital gain was rightly claimed as exempt under Section 10(38) of the Act. 4.2 That on the facts and circumstances of the case and in law, CIT(A)- NFAC has erred in not appreciating that the pre-conditions of Section 68 were not met, inasmuch as, not only the transaction of sale of shares of Panafic Industries Ltd was through banking channels but the identity, genuineness & creditworthiness of Panafic Industries Ltd was proved and that but for suspicion, there was nothing to treat the transaction as bogus or sham.

Page 3 of 6

ITA No. 8586/DEL/2025 [A.Y 2016-17] Karan Talwar vs. ACIT That the Appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal.”

Page 4 of 6

ITA No. 8586/DEL/2025 [A.Y 2016-17] Karan Talwar vs. ACIT Order pronounced in the open court on 19.05.2026

Sd/- Sd/- (SATBEER SINGH GODARA) NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 26.05.2026 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