PRAVEEN KHANDELWAL,BAREILLY, UTTA RPRADESH vs. ITO-2(2),BAREILLY-NEW/, BAREILLY, UTTAR PRADESH

ITA 795/LKW/2026Status: DisposedITAT Lucknow25 September 2026AY 2013-20146 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, after hearing both parties and perusing the record, was of the considered view that the assessee deserved one more opportunity to present his case. The Tribunal restored the file to the Assessing Officer with a direction to provide one more opportunity to the assessee to present his case and produce necessary evidence in support of the claim for exemption under section 10(38). The assessee was cautioned to fully comply with the directions of the Assessing Officer in the set-aside proceedings, failing which the AO would be at liberty to pass an order based on available material, even if ex-parte. The Tribunal allowed the appeal for statistical purposes. The specific grounds of appeal were not explicitly decided individually but were implicitly addressed by the decision to grant a fresh opportunity.

What were the facts?

The assessee, Praveen Khandelwal, filed a return for AY 2013-14 declaring an income of Rs. 2,19,010/- and claiming an exemption of Rs. 39,03,314/- under section 10(38) for Long Term Capital Gains (LTCG) from the sale of shares of M/s Presha Metallurgical Limited. The case was reopened under section 147. The assessee did not file a return in response to the section 148 notice but filed objections. The Assessing Officer (AO) disallowed the LTCG, deeming it bogus based on investigation wing information that the company was used for accommodation entries. The AO completed the assessment under section 147 read with sections 144/144B, determining the total income at Rs. 41,22,324/-. The National Faceless Appeal Centre (NFAC), Delhi, dismissed the assessee's appeal ex-parte.

What were the issues?

1. Whether the Learned CIT(A) erred in confirming the action of the Assessing Officer in assuming jurisdiction to initiate and complete reassessment proceedings under section 147 read with sections 144/144B of the Income Tax Act, 1961, thereby making an addition of Rs. 39,03,314/- to the returned income. 2. Whether the Learned CIT(A) failed to appreciate that the reassessment proceedings were initiated on the basis of a change of opinion, as the department had previously initiated and dropped reassessment proceedings for the same issue. 3. Whether the Learned CIT(A) failed to appreciate that the reassessment proceedings were initiated on vague, cryptic, and nonexistent reasons. 4. Whether the Learned CIT(A) erred in not dealing with each objection raised by the assessee to the initiation of reassessment proceedings. 5. Whether the Learned CIT(A) failed to appreciate that the Assessing Officer could not controvert the documentary evidence furnished by the assessee regarding LTCG. 6. Whether the sanction issued by the superior authority under section 151 for issuing the notice under section 148 was illegal. 7. Whether the Learned CIT(A) failed to appreciate that the Assessing Officer erred in not providing the material relied upon and in not providing an opportunity for cross-examination. Assessee's Contentions: The NFAC passed an ex-parte order, arbitrarily upholding the addition. The AO did not provide an adequate opportunity of being heard and made the addition based on presumption and surmises without supporting material. The assessee prayed for restoration to the AO for a fresh decision after providing a reasonable opportunity, undertaking to produce all relevant documents. Revenue's Contentions: The Ld. Sr. D.R. objected to the restoration, relying on the orders of the authorities below, and submitted that the appeal should be dismissed.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 147,Section 148,Section 143(1),Section 142(1),Section 144,Section 144B,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA

For Appellant: Shri Rakesh Garg, Advocate
For Respondent: Shri Sudhakar Shukla, D.R

This appeal has been preferred by the Assessee against the order dated 13.02.2026, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2013-14. 2.0 The brief facts of the case are that the assessee filed his return of income for the year under consideration on 25.02.2014, declaring a total income of Rs.2,19,010/- and claiming exemption under section 10(38) of the Income Tax Act, 1961 (hereinafter called 'the Act’) of Rs.39,03,314/-. The return filed by the assessee was processed under section 143(1) of the Act on 14.06.2014 on the income returned by the assessee. Subsequently, on the basis of information in possession of the Income Tax Department that the assessee had allegedly claimed

ITA No.795/LKW/2026 bogus exemption of Long Term C

The order continues below.

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