ASHOK KHUBCHANDANI,RAIPUR vs. DCIT, CIRCLE 1(1), RAIPUR, RAIPUR

ITA 437/RPR/2026Status: DisposedITAT Raipur09 October 2026AY 2019-2011 pages
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What were the facts?

The assessee, engaged in construction, filed an income tax return for AY 2019-20 declaring an income of Rs. 4,25,14,760/-. The case was reopened under Section 148 of the Income Tax Act, 1961, based on information from survey proceedings under Section 133A concerning Shri Rajkumar Nanjiani. Incriminating materials indicated the assessee and his wife purchased three immovable properties from Shri Rajkumar Nanjiani, with payments aggregating Rs. 6,22,44,600/- made in cash over and above the registered sale deed values. The Assessing Officer (AO) proposed taxing Rs. 3,11,22,300/- (50% of the 'on-money' payment) under Section 69 read with Section 115BBE. The assessee's explanation was not found satisfactory. The appeal is against the order of the CIT(A) dated 18.03.2026.

What did the Tribunal hold?

The Tribunal held that the notice issued by the AO under Section 148A(b) of the Act on 16.03.2023, requiring compliance on or before 23.03.2023, did not provide the mandatory 'not less than seven days' compliance time. This was based on the calculation excluding the date of issuance and the date of compliance. The Tribunal respectfully followed its own previous decisions in similar cases (DCIT-1(1), Raipur Vs. Avani Ferro Alloys Pvt. Ltd and Atal Agrawal vs. ITO-1, Raigarh) and the decision of the Hon'ble Chhattisgarh High Court in MM Wonder Park Pvt. Ltd. Consequently, the notice under Section 148A(b) was quashed as not being in accordance with law. The Tribunal directed the AO to afford proper opportunity of hearing to the assessee and decide the matter afresh. As the Section 148A(b) notice was quashed, all subsequent proceedings were held to be non-est. Other grounds were rendered academic and not adjudicated. The addition of Rs. 3,11,22,300/- under Section 69 r.w.s. 115BBE was not adjudicated on merits due to the quashing of the initial notice.

What were the issues?

1. Whether the notice under Section 148A(b) of the Act was valid, considering the assessee was not provided with clear seven days' compliance time. (Question of law and fact, turns on Section 148A(b)). 2. Whether the subsequent notice under Section 148 of the Act was valid. (Question of law and fact, turns on Section 148). 3. Whether the approval granted under Section 151 of the Act was valid. (Question of law and fact, turns on Section 151). 4. Whether the order under Section 148A(d) of the Act was valid. (Question of law and fact, turns on Section 148A(d)). 5. Whether the reopened assessment order was illegal. (Question of law and fact). 6. Whether the sum of Rs. 3,11,22,300/- was taxable under Section 69 of the Act. (Question of law and fact, turns on Section 69). 7. Whether there was a violation of the principles of natural justice. (Question of law and fact). Assessee's Contention: The AO did not provide clear seven days' compliance time as mandated by Section 148A(b), rendering consequential proceedings void ab initio. The notice issued on 16.03.2023 for compliance on or before 23.03.2023 did not allow the statutory minimum period. The assessee also argued for denial of cross-examination of Shri Rajkumar Nanjiani and that additions were based on unreliable evidence. Revenue's Contention: The AO provided 7 days' time for compliance by issuing the notice on 16.03.2023 for compliance on or before 23.03.2023, thus the notice was valid.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 148,Section 151,Section 148A(d),Section 69,Section 115BBE,Section 133A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI AVDHESH KUMAR MISHRA, AM

For Appellant: Shri Praveen Khandelwal, CA, Shri Praveen Goyal, CA
Hearing: 15/09/2026

Per Avdhesh Kumar Mishra, AM: This appeal for Assessment Year (‘AY’) 2019-20 filed by the assessee is directed against the order dated 18.03.2026 of Commissioner of Income Tax (Appeals), [‘CIT(A)’], National Faceless Appeal Centre (NFAC), Delhi, passed under section 250 of the Income Tax Act, 1961 (‘Act’).

2.

Vide, eight effective grounds of appeal, t

The order continues below.

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