SHARADBHAI MANSUKHBHAI KUMBHANI,VALLABHNAGAR vs. THE ITO WARD 3(3)(1), SURAT

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ITA 888/SRT/2025Status: DisposedITAT Surat22 June 2026AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) passed an ex-parte order due to incorrect email communication, violating natural justice. The Tribunal also noted that the AO completed the assessment without waiting for the Valuation Officer's report, despite making a reference.

What were the facts?

The assessee sold agricultural land for Rs. 1,37,24,875/-, but the stamp duty valuation was Rs. 2,51,93,900/-. The AO made an addition of Rs. 1,14,69,025/- and denied exemption under section 54B. The CIT(A) dismissed the assessee's appeal for non-prosecution.

What were the issues?

Whether the ex-parte order passed by the CIT(A) was justified, and whether the AO erred in completing the assessment without the Valuation Officer's report.

Which sections of the Income-tax Act were involved?

Section 50C,Section 54B,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT ‘DB’ BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI BHAGIRATH MAL BIYANI

For Respondent: Shri Ashish Kumar, Sr. D.R
Hearing: 09/06/2026Pronounced: 22/06/2026

आयकर अपीलीय अधिकरण, सूरत न्यायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT ‘DB’ BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA No: 888/SRT/2025 Assessment-Year: 2015-16 Sharadbhai Mansukhbhai Income Tax Officer Kumbhani Ward-3(3)(1), Surat 1, At Dudhiya Agariya, बनाम/ TA Rajula District-Amreli, Vs. Gujarat-365560 (Assessee/Appellant) (Revenue/Respondent) PAN: ASAPK7378P Assessee by Ms.Chaitali Shah, CA Revenue by Shri Ashish Kumar, Sr. D.R. Date of Hearing 09/06/2026 Date of Pronouncement 22/06/2026 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by the order of first-appeal dated 23.06.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 30.12.2017 passed by learned ITO, 3(1)(5), Amreli [“Ld. AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

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Sharadbhai Mansukhbhai Kumbhani ITA No. 888/Srt/2025 - AY 2015-16 2. The background facts leading to present appeal are such that the assessee-individual filed his return of income of AY 2015-16 declaring a total income of Rs. 4,34,900/-. The case of assessee was selected for scrutiny-assessment and the Ld. AO issued notices u/s 143(2)/142(1). During scrutiny-proceedings, the AO found that the assessee sold an agricultural land situated at Rajula for Rs. 1,37,24,875/- whereas the valuation done by Stamps Authority was Rs. 2,51,93,900/-. Therefore, the AO show-caused assessee proposing for the taxation in terms of section 50C and proposed addition of Rs. 1,14,69,025/- [being the difference of Stamps Authority Valuation of Rs. 2,51,93,900/- and the sale consideration of Rs. 1,37,24,875/- declared by assessee] and also part denial of exemption u/s 54B amounting to Rs. 20,00,000/- claimed by assessee. The assessee filed reply which the Ld. AO considered. However, the Ld. AO passed assessment- order u/s 143(3) assessing total income at Rs. 1,39,03,925/- after making a total addition of Rs. 1,34,69,025/-. Aggrieved, the assessee carried matter in appeal before Ld. CIT(A). The Ld. CIT(A), however, dismissed assessee’s appeal for non-prosecution and did not grant any relief. Now, the assessee has come in next appeal before us.

3.

Ld. AR for assessee submitted that in present case, the Ld. CIT(A) passed ex-parte order dismissing assessee’s first appeal and approving the order of Ld. AO citing the non-prosecution by assessee on the dates of hearing. However, the non-prosecution has occurred due to bona fide reason as the Ld. CIT(A), while conducting first-appeal, has sent notices of hearing

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Sharadbhai Mansukhbhai Kumbhani ITA No. 888/Srt/2025 - AY 2015-16 to e-mail address: ashokbkothiya@gmail.com although the assessee has mentioned email address: “office@rindiani.in” in the space provided in Form No. 35. Therefore, due to non-service of notices at proper email address, the assessee could not attend hearings fixed by Ld. CIT(A), which has led to the passing of ex-parte order by Ld. CIT(A). Therefore, Ld. AR submitted, the impugned order of first-appeal passed by Ld. CIT(A) deserves to be set aside.

4.

Ld. AR next invited our attention to Para 6 of assessment-order passed by Ld. AO, reading as under:

“Assessee has also requested to make reference to Valuation Officer for ascertaining The F.M.V. of the land. We have made reference to the Valuation Officer for Valuation of the property on 08.12.2017. Valuation report is not received from the Valuation Officer till date. The argument of the assessee is not acceptable. An amount of Rs. 1,34,69,025/- is added to the total income of the assessee. Penalty proceeding are initiated separately for furnishing inaccurate-particulars-of-income/Concealment of income.” 5. Referring to same, Ld. AR submitted that although the assessee made a request to the Ld. AO for making reference for ascertaining fair market value of sold land and acting thereupon, the Ld. AO also made a reference to the Valuation Officer. However, the AO made impugned addition and completed assessment without valuation report citing the reason that the valuation report was not received from AO. Hence, in the situation the Ld. AR contended that it would be most appropriate to remand present matter to the file of Ld. AO for a fresh assessment with suitable directions.

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Sharadbhai Mansukhbhai Kumbhani ITA No. 888/Srt/2025 - AY 2015-16 6. Ld. DR for revenue although supported the orders of lower-authorities yet left the matter to the discretion and wisdom of bench without raising any objection against remand to Ld. AO.

7.

We have carefully considered the submissions of both sides and carefully perused the material available on record. Upon examination of the impugned order of first-appeal passed by the Ld. CIT(A), we find merit in the contention of the assessee that the appeal has been disposed of ex parte without affording an effective opportunity of hearing. The assessee has specifically contended that the notices of hearing were issued by the Ld. CIT(A) on an email address different from the email address furnished in Form No. 35. This factual contention has not been controverted by the Revenue. Therefore, in the interest of natural justice, we are of the considered view that the assessee deserves an opportunity to present his case before the first appellate authority. However, we further note that the assessment-order itself records that the assessee had disputed the stamp duty valuation adopted for the purpose of section 50C and had requested the Ld. AO to make a reference to the Valuation Officer. It is also evident from the assessment-order that such reference was made by Ld. AO. However, the assessment was finalized without waiting for the valuation report on the ground that the same was not received till the completion of assessment proceedings. Once a valid reference had been made to the Valuation Officer, the valuation report assumes relevance for determining the fair market value of the property and for adjudicating the issue arising of

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Sharadbhai Mansukhbhai Kumbhani ITA No. 888/Srt/2025 - AY 2015-16 section 50C of the Act. Considering the totality of facts and circumstances of the case, and in order to afford adequate opportunity to the assessee as well as to enable consideration of the valuation report and other relevant material, we are of the view that the matter requires fresh examination at the assessment stage. Accordingly, we set aside the orders of the lower authorities and restore present matter to the file of the Ld. AO with a direction to frame the assessment de novo in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee shall be at liberty to place on record all relevant evidences and submissions in support of his case and the Ld. AO shall consider the same in accordance with law. Ordered Accordingly.

8.

Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 22/06/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat True Copy दिन ांक /Dated : 22/06/2026 Rajesh/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

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