ARVIND MURJI BHANUSHALI,MUMBAI vs. INCOME TAX OFFICER WARD 41(4)(1), MUMBAI, MUMBAI

This appeal by the assessee is directed against the order dated 03.12.2025 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘Ld. CIT(A)’], under section 250 of the Income-tax Act, 1961 (‘the Act’) for the assessment year 2013-14, arising out of the assessment order dated 29.05.2023 passed under section 147 read with section 144B of the Act.

The assessee has raised the following grounds of appeal:

Brief facts of the case are that the assessee, an individual, filed his original return of income for the year under consideration on 30.03.2015 declaring total income of Rs.4,91,200/-. The case was reopened and, pursuant to the proceedings under section 148A of the Act, notice under section 148 was issued on 27.07.2022. In response thereto, the assessee filed return of income on 03.05.2023 declaring the same income. The Assessing Officer noticed that the assessee had purchased an immovable property for a consideration of Rs.5,24,00,000/- and called upon him to explain the source thereof. The assessee explained the source as sale proceeds of agricultural land of Rs.81,99,000/-, unsecured loans of Rs.4,04,00,000/- and own sources of Rs.38,28,000/-. The Assessing Officer accepted the source to the extent of the sale proceeds of agricultural land and loans aggregating to Rs.1,48,00,000/- received 2 from 30 parties. However, the balance loans of Rs.2,56,00,000/- and the amount stated to be from own sources were not accepted. Consequently, an addition of Rs.2,94,28,000/- was made under section 69 read with section 115BBE of the Act and the total income was assessed at Rs.2,99,19,200/-.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A), challenging both the validity of the reopening and the addition on merits. The Ld. CIT(A), however, dismissed the legal grounds as well as the grounds on merits, without any meaning full discussion. Aggrieved, the assessee is in appeal before the Tribunal.

The learned Authorised Representative submitted that the reassessment proceedings are invalid and that the case of the assessee is covered by the decision of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal. He further submitted that the legal grounds raised by the assessee have not been properly adjudicated by the Ld. CIT(A). It was, therefore, prayed that assessment be quashed.

The learned Departmental Representative supported the order passed by the Ld. CIT(A). He submitted that sufficient opportunities were afforded to the assessee during the appellate as well as the remand proceedings, but the assessee did not furnish the requisite evidence. He accordingly contended that no interference with the impugned order is called for.

We have heard the rival submissions and perused the material available on record. The Ld. CIT(A), in paragraph 5.1 of the impugned order, has recorded the details of the hearing notices issued during the appellate proceedings. The said paragraph shows that there was no response to the notices fixing the hearing on 14.10.2025 and 3 20.11.2025, being the last two opportunities granted to the assessee. The Ld. CIT(A), in paragraph 5.2, has further noted that the assessee had uploaded certain documents and an application seeking admission of additional evidence, but no additional evidence was furnished with the said application. The impugned order also records that, during the remand proceedings, the assessee did not furnish any further evidence in response to the opportunity provided by the Assessing Officer.

At the same time, the assessee had specifically raised legal grounds before the Ld. CIT(A) challenging the jurisdiction assumed under sections 147 and 148 of the Act, the order passed under section 148A(d), and the approval for issuance of notice under section 148. The assessee has also relied upon the decision of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal. We find that the impugned order does not deal with the aforesaid legal grounds by examining the relevant facts, the statutory provisions and the judicial precedent relied upon by the assessee. The legal grounds were dismissed principally for want of material and on the observation that no serious lacuna in the reopening proceedings had been pointed out at the assessment stage. Thus, the legal grounds, which go to the root of the jurisdiction, have not been adjudicated by a reasoned finding on their merits.

Having regard to the entirety of the facts and in the interest of justice, we consider it appropriate to set aside the impugned order and restore the appeal to the file of the Ld. CIT(A) for fresh adjudication in accordance with law. The assessee shall be at liberty to raise all legal and factual grounds available to him and to file such submissions and evidence as may be permissible in law. The Ld. CIT(A) shall consider each ground, including the plea based on the decision of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal, and pass a speaking order after granting reasonable opportunity of being heard to the 4 assessee. The assessee is also directed to cooperate in the proceedings and respond to the notices without seeking unnecessary adjournments. We make it clear that we have not expressed any opinion on the merits of any ground raised by the assessee and all issues are left open. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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