JAY PATEL, RAIPUR,RAIPUR vs. ITO, WARD-3(1), RAIPUR, RAIPUR

ITA 684/RPR/2026Status: HeardITAT Raipur12 October 2026AY 2015-166 pages
AI SummaryRemanded

What were the facts?

The assessee, Jay Patel, legal heir of Late Rajendra Kumar Patel, is in appeal against the order of the CIT(Appeals)/NFAC, Delhi for Assessment Year 2015-16. The deceased had claimed long-term capital gain of Rs. 8,61,760 on the sale of shares of M/s Mahavir Advanced Remedies Ltd., purchased in cash for Rs. 29,865 and sold for Rs. 8,93,768. An earlier reassessment was set aside by the ITAT, directing compliance with Section 159(2). The Assessing Officer, citing investigations into bogus LTCG, treated the sale consideration of Rs. 8,93,768 as unexplained income, completing assessment under Section 147 r.w.s. 144. The CIT(Appeals) confirmed the addition, holding the transaction to be a sham and relying on various precedents. The assessee contends the CIT(Appeals) failed to comply with Section 250(4) & (6) and lacked independent enquiry and reasoning.

What did the Tribunal hold?

The Tribunal held that the order of the CIT(Appeals)/NFAC was liable to be set aside and the matter remanded back for de novo adjudication. The Tribunal found that the CIT(Appeals) had summarily relied on the findings of the Assessing Officer and upheld the additions without complying with the provisions of Section 250(4) & (6) of the Income Tax Act, 1961. It was observed that there was no independent enquiry by the First Appellate Authority and no reasoning provided for arriving at its decision, which is contrary to the functioning of a quasi-judicial authority. Therefore, the appeal was allowed for statistical purposes, and the matter was remanded to the CIT(Appeals) for fresh adjudication with specific enquiry and findings in terms of Section 250(4) & (6), while complying with the principles of natural justice. The assessee was directed to comply with hearing notices and represent the matter on merits.

What were the issues?

1. Whether the CIT(Appeals) erred in confirming the addition of Rs. 8,93,768 as unexplained income, treating the sale consideration of shares as bogus LTCG, turning on Section 68 of the Income Tax Act, 1961. Assessee's Contention: The CIT(Appeals) failed to conduct an independent enquiry and provide reasoning as required by Section 250(4) & (6) of the Act, summarily relying on the Assessing Officer's findings. The decision lacks the principles of natural justice. Revenue's Contention: Not recorded in the judgment. The CIT(Appeals) relied on the Assessing Officer's findings, countrywide investigations into bogus LTCG, the nature of the scrip, the cash purchase, the steep price rise without justification, and precedents like M.K. Rajeshwari v. ITO, CIT v. Sanghamitra Bharali, Sumati Dayal v. CIT, CIT v. Durga Prasad More, Suman Poddar v. ITO, Udit Kalra v. ITO, and Sanjay Bimalchand Jain (L/H Shantidevi Bimalchand Jain) v. PCIT.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 68,Section 144,Section 147,Section 148,Section 148A,Section 151,Section 156,Section 159,Section 159(2),Section 250(4),Section 250(6),Section 271(1)(c),Section 288A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sunil Kumar Agrawal &, Ms. Vidya Verma, CAs
For Respondent: Shri Piyush Tripathi, Sr. DR
Hearing: 12.10.2026Pronounced: 12.10.2026

PER PARTHA SARATHI CHAUDHURY, JM

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 20.07.2026 for the assessment year 2015-16 as per the grounds of appeal on record.

2.

Brief facts in this case are as follows: “2.1 Late Shri Rajendra Kumar Patel filed his return for A.Y. 2015- 16 on 31.03.2016 declaring income o

The order continues below.

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