SAHAB BUX YADAV,LUCKNOW vs. DCIT, , LUCKNOW

ITA 332/LKW/2026Status: DisposedITAT Lucknow24 September 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal considered the assessee's submission that the sale proceeds were from a rural agricultural land, which would exempt it from tax. The assessee wished to present land records to support this claim. The Tribunal also noted that the entire sale consideration was taxed as capital gains without considering the cost of purchase. In the interest of justice, the Tribunal decided to restore the matter to the file of the Assessing Officer to provide the assessee an opportunity to present necessary evidence supporting his claims. The Tribunal cautioned the assessee that failure to comply would result in an adverse inference. The Assessing Officer was directed to consider the evidence and take a fresh decision in accordance with the law. The issue regarding the proper opportunity and jurisdiction was implicitly addressed by restoring the matter for fresh adjudication on merits.

What were the facts?

The assessee, Sahab Bux Yadav, is in appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) for Assessment Year (AY) 2017-18. The NFAC had dismissed the assessee's appeal against an order passed by the Assessing Officer (AO) under section 147 read with sections 143(3) and 144B of the Income Tax Act, 1961. The AO had reopened the assessment based on information that the assessee purchased time deposits worth Rs. 1 Crore and earned interest. The assessee claimed the sale of agricultural land was exempt. However, the AO noted the sale deed indicated a residential property sale for Rs. 1,75,02,000/-. The AO added this amount as capital gain, considering the source of time deposits explained by the sale proceeds. The NFAC dismissed the appeal for non-prosecution after the assessee failed to comply with multiple notices.

What were the issues?

1. Whether the order of the learned CIT(Appeals) deserves to be set aside and quashed in the interest of natural justice, as it was passed without giving a proper opportunity to the assessee? 2. Whether the learned CIT(Appeals) erred in dismissing the appeal for non-prosecution without adjudicating the grounds on merits? 3. Whether the order of the learned CIT(Appeals) is bad in law and passed by the learned AO without assuming proper jurisdiction? 4. Whether the learned CIT(Appeals) erred in confirming an addition of Rs. 1,75,02,000/- under the head of capital gain without considering the fact that the property was rural agricultural land at the time of purchase? 5. Whether the learned CIT(Appeals) erred in confirming an addition of Rs. 1,75,02,000/- under the head of capital gain without considering the cost of the property and without taking the indexation benefit? Assessee's contentions: The assessee, appearing in person, argued that he was not well-versed in computers and therefore, could not track notices from the NFAC, leading to non-compliance. He contended that the property sold was rural agricultural land and thus exempt from tax. He also argued that the entire sale consideration was added back without considering the cost of acquisition. He prayed for the matter to be restored to the AO. Revenue's contentions: The learned DR argued that the assessee made no worthwhile compliance before the AO or the CIT(A) and there was no reason to believe he would comply in the future. The DR requested clear directions for compliance, failing which the additions should be confirmed.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 144B,Section 148A,Section 148,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘A’ BENCH, LUCKNOW

Hearing: 25.08.2026Pronounced: 24.09.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC dated 28.01.2026, wherein the ld. CIT(A) has dismissed the appeal of the assessee against the order passed by the ld. Assessing Officer under section 147 r.w.s. 143(3) r.w.s. 144B the Income Tax Act, 1961. The grounds of appeal are as under: - “1. Because on the facts and in the circumstance of the case, the order of Id CIT(Appeals) has been passed without giving proper opportunity to the assessee, therefore the order deserves to be set aside and quashed in the interest of natural justice.

2.

Because on the facts and in the circumstance of the case, the LA CIT(Appeals) has dismissed the appeal of the appellant

The order continues below.

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