NARESH CHANDRA KHATTAR,AGRA vs. ITO WARD-1(1)(2), AGRA

ITA 475/AGR/2026Status: DisposedITAT Agra16 October 2026AY 2019-209 pages
AI SummaryAllowed

What were the facts?

The assessee, Naresh Chandra Khattar, filed his return of income for Assessment Year 2019-20 on August 3, 2019, declaring a total income of Rs. 8,70,780. During a search and seizure operation on the Omaxe Group on March 14, 2022, a hard disk was seized containing data of unaccounted transactions. This data, found in 'MAIN REPORT' Excel files, indicated suppressed cash transactions, with amounts to be multiplied by 100 for actual value. The assessee's name appeared in this report, linked to an unaccounted cash payment of Rs. 7,58,600 for the 'India Trade Centre' project. Based on this, the Assessing Officer (AO) issued a notice under Section 148 of the Income Tax Act, 1961. The assessee denied making this cash payment, stating it was an adjustment for earlier allotments and that they had received a refund. The AO, however, did not accept this and added Rs. 7,58,600 under Section 69 read with Section 115BBE. The CIT(A) dismissed the assessee's appeal, leading to the present appeal before the ITAT.

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal by deleting the addition of Rs. 7,58,600. The primary reasoning was based on Ground No. 6, which challenged the sustainability of the addition under Section 69 read with Section 115BBE. The Tribunal noted that the seized document relied upon by the AO for the addition was dated June 27, 2008, relating to June 2008. Crucially, the annexure to the proforma for approval under Section 151 did not specify which assessment year the alleged escapement related to. Furthermore, the Tribunal found that the AO had not contradicted the assessee's submission that amounts were adjusted for earlier allotments and no payment was made by the allottees during the year under consideration (FY 2018-19, AY 2019-20). The assessment order also lacked any basis for attributing the cash payment to the relevant assessment year. In the absence of any material on record to indicate that the cash payment was made during the year under consideration, the addition was deemed unsustainable. Consequently, the addition of Rs. 7,58,600 was deleted. As Ground No. 6 was allowed, other grounds were left undecided as academic.

What were the issues?

1. Whether the reassessment proceedings are void ab initio and liable to be quashed due to the purported lack of prior approval from the PCIT under clause (iv) of Explanation 2 to Section 148 of the Act (Assessee's contention: Approval was not preceded by prior approval; Revenue's contention: Not recorded). 2. Whether the approval granted by the PCIT under Section 151 of the Act is vitiated by non-application of mind, given a material discrepancy in the quantum of escaped income and the reasons recorded not specifying the relevant assessment year or nature of payment (Assessee's contention: Approval vitiated due to discrepancy and lack of specificity; Revenue's contention: Not recorded). 3. Whether the approval under Section 148B of the Act, issued as a single composite sanction for multiple assessees, is mechanically granted without independent application of mind, rendering the assessment order void ab initio (Assessee's contention: Approval mechanical and without application of mind; Revenue's contention: Not recorded). 4. Whether the proceedings are violative of principles of natural justice due to the non-furnishing of a complete copy of the 'Main Report' Excel file, statements under Section 132(4) or 131, or a certificate under Section 65B(4) of the Indian Evidence Act (Assessee's contention: Violation of natural justice; Revenue's contention: Not recorded). 5. Whether the addition of Rs. 7,58,600 under Section 69 read with Section 115BBE is sustainable, given that the jurisdictional pre-condition of the assessee having made investments in the relevant previous year is absent (Assessee's contention: No investment made in the relevant year; Revenue's contention: Not recorded). 6. Whether the cancellation of the original booking and substitution by a new unit, resulting in a net refund, can constitute an investment under Section 69 (Assessee's contention: Net refund cannot be an investment; Revenue's contention: Not recorded). 7. Whether the addition is impermissible in the hands of the appellant despite joint booking with his wife, who contributed significantly through banking instruments (Assessee's contention: Addition impermissible due to joint booking and wife's contribution; Revenue's contention: Not recorded).

Which sections of the Income-tax Act were involved?

Section 132,Section 148,Section 142(1),Section 69,Section 115BBE,Section 250,Section 151,Section 148B,Section 132(4),Section 131,Section 65B(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (SMC

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

Hearing: 06.08.2026Pronounced: 16.10.2026

PER : BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER: This appeal is directed against the impugned order dated 15.05.2026 passed in appeal No. NFAC/2018-19/10341677 by the ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2019-20, wherein ld. CIT(A) has dismissed assessee’s appeal.

2.

In this case, the assessee filed his return of income for the year under consideration on 03.08.2019, declaring total income at Rs.8,70,780/-. A Search & Seizure action u/s 132 of the Act in the case of Omaxe Group along with various office and residential premises was

The order continues below.

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