ASLAM KHAN,BHIWADI (ALWAR) vs. ITO BHIWADI, BHIWADI

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ITA 611/JPR/2025Status: DisposedITAT Indore29 September 2026AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee did not appear before it, and consequently, no arguments were presented on behalf of the assessee. The Revenue was represented, and the appeal was filed against the order of the Commissioner of Income Tax (Appeal), NFAC, Delhi. The Tribunal observed that the assessee had filed an appeal before the CIT(A) against the reassessment order passed under Section 143(3) r.w.s. 147 of the Act for AY 2014-15. However, the judgment excerpt provided does not contain the findings or decision of the Tribunal on the merits of the case or the specific issues raised. The operative directions or the final outcome of the appeal are not recorded in the provided text.

What were the facts?

The assessee, Aslam Khan, an individual engaged in the trading of building material, filed a return of income for Assessment Year 2014-15 on October 21, 2014, declaring a total income of Rs. 3,72,460. The Revenue received information indicating the assessee purchased an immovable property on July 5, 2013, for Rs. 1.5 crores, with stamp duty expenses of Rs. 11,73,850. The assessee's share in this transaction was Rs. 80,86,925. The appeal challenges an order dated February 21, 2025, passed by the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, which arose from a reassessment order passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are valid, considering the information available to the Assessing Officer at the time of issuing the notice under Section 148. Assessee's Contention: The assessee did not appear before the Tribunal, and therefore, no specific arguments were recorded on behalf of the assessee. Revenue's Contention: The Revenue contended that the reassessment proceedings were validly initiated as information regarding the purchase of an immovable property for a substantial sum, which was not reflected in the original return of income, came to the department's notice. This information indicated a potential escapement of income, justifying the reopening of the assessment. The Revenue likely argued that the conditions for reopening under Section 147 were met.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Respondent: Shri Abhimanyu Singh

आदेश/ORDER

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 21.02.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, arising out of reassessment order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Asst. Year 2014-15.

I.T.A No. 611/JPR/2025 Page No 2 Aslam Khan

2.

Brief facts of the case are that the assessee is an individual engaged in trading business of building material. Assessee has filed the return of income for the AY 2014-15 on 21.10.2014 declaring total income of Rs. 3,72,460/-. Information received from the department that assessee purchased an immovable property on 05.07.2013 for a consideration of Rs 1.5 crores with stamp duty expenses of Rs. 11,73,850/-. Thus, the assessee’s share of Rs. 80,86,925/-. Whereas the Sub-Registrar valued the immovable property at Rs. 2,05,18,502/-. Thus the difference of Rs. 27,59,251 (Half of Rs. 55,80,502) which was required to taxed in the hands of the assessee as per section 56(2)(vii)(b) of the Act. Hence, notice u/s. 148 of the Act dated 21.02.2020 was issued to the assessee. In response, the assessee requested to treat the original return as the Return of Income. During the course of reassessment proceeding, the assessee claimed that the provision of section 56(2)(vii)(b) of the Act, to sell and purchase of agricultural land will not be applicable. The AO has not accepted the above submission of the amended provision of 56(2)(vii)(b) of the Act which was inserted w.e.f. 01.04.2014 thereby the difference in stamp duty is added to the income of the assessee.

3.

Aggrieved against the reassessment order, the assessee filed the appeal before Ld. CIT(A) who has given four opportunities of hearing between 02.09.2024 to 19.02.2025. Though the notices of hearing were delivered to the assessee, but not complied with the same, thereby dismissed the appeal for non prosecution.

4.

Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:-

I.T.A No. 611/JPR/2025 Page No 3 Aslam Khan

1) That the learned Assessing Officer (ld. AO) as well as the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (ld. CIT(A), NFAC), have grossly erred both on facts and in law in initiating proceedings under Section 148 of the Income Tax Act, 1961 without Fulfilling the preconditions laid down under Section 147 of the Act. The impugned action has been taken mechanically and without proper application of mind, despite the fact that the appellant l already filed his return of income under Section 139 on 21.10.2014. The reopening of assessment has been initiated merely on the basis of assumptions, presumptions, surmises and borrowed satisfaction from other records, which is contrary to law. Consequently, the notice issued under Section 148 is invalid and bad in law, and the reassessment completed on the basis of such notice deserves to be quashed in toto. 2) That the learned Principal Commissioner of Income Tax, Alwar (ld. Pr. CIT) has accorded the sanction/approval under Section 151 of the Act in a mechanical, perfunctory and routine manner, without any independent application of mind and without recording proper satisfaction as mandated under the provisions of Section 151. As such, the sanction granted is invalid and renders the entire reassessment proceedings void ab initio. 3) That the ld. AO and the ld. CIT(A), NFAC, Delhi have violated the principles of natural justice by not affording the appellant a final and effective opportunity of being heard prior to the completion of assessment proceedings. The assessment order has been passed in undue haste and without granting the appellant sufficient opportunity to present his case or to furnish relevant evidence, thereby rendering the assessment order bad in law. 4) That the ld. AO as well as the ld. CIT(A), NFAC, Delhi have erred in law and on facts in making sustaining an addition of ₹27,59,251/ under Section 56(2)(vii)(b)(ii) of the Income Tax Аct, 1961, merely on account of the difference between the stamp duty valuation and the actual purchase consideration of an agricultural land whereas source of investment and nature of land also accepted by the ld. AO. The said land is situated in a rural area and does not fall within the definition of capital asset under Section 2(14) of the Act. Therefore, the provisions of Section 56(2)(vii)(b)(ii) are not applicable to the transaction, and the addition made is without jurisdiction and liable to be deleted. 5) That That the ld. AO as well as the Id. CIT(A), NFAC, Delhi have grossly erred in imposing and confirming interest under Sections 234A and 234B of the Income Tax Act, 1961, without properly appreciating the facts and legal position of the case. The levy of interest is

I.T.A No. 611/JPR/2025 Page No 4 Aslam Khan

unjustified, arbitrary, and contrary to the settled principles of law, and therefore deserves to be deleted. 6) That the ld. AO has issued a demand notice for Rs. 13,94,284 and subsequently issued a rectified demand notice dated 22.04.2022 for Rs. 15,00,446/, without considering the legal objections and facts placed on record by the appellant. It is respectfully prayed that the operation and enforcement of the said demand notices be stayed until the final disposal of the present appeal, in the interest of justice. 7) That the ld. AO has grossly erred both in law and on facts in initiating penalty proceedings under Section 271(1)(c) of the income Tax Act, 1961 on the basis of additions made on estimation and hypothetical grounds. Such penalty proceedings are unsustainable in law, being based on mere estimations and lacking any conclusive evidence of concealment or furnishing of inaccurate particulars of income. 8) That the appellant respectfully reserves the right to add, alter, amend, modify, substitute or withdraw any or all of the grounds of appeal at any stage of the appellate proceedings, including during the course of hearing, in the interest of justice and to advance the cause of fairness. 5. Today is the 13th time of hearing of this appeal, but none appeared on behalf of the assessee. The assessee requested for adjournment on the ground that his Authorized Representative is pre- occupied with filing of ITRs, thus the request for adjournment is rejected.

6.

On perusal of the records further shows that assessee filed a written submission, copy of the sale deed dated 05.07.2023, Revenue records of Khesara No. 679/354 and claiming that the immovable property purchased is a rural agricultural land which is not a capital asset within the meaning of section 2(14) of the Act, therefore, the addition u/s. 56(2)(vii) of the Act cannot be invoked. Since the appellate order being an ex-party order and no documents filed before the first appellate authority, in the interest of justice, we deem it fit to set aside the matter back to the file of jurisdictional AO to give one

I.T.A No. 611/JPR/2025 Page No 5 Aslam Khan

more opportunity of hearing to the assessee and then pass a fresh order on merits as per the provisions of law. Needless to say the assessee should make use of this final opportunity of hearing and cooperate by filing of the required documents and details before the JAO for passing the order on merits of the case.

7.

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

Order pronounced in the open court on 29-09-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 29/09/2026 Dhananjay K., Sr. PS

आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर

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