RADHEYSHAM,AMBALA vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE , YAMUNA NAGR

At the outset, it is noticed that the impugned order has been passed by the Ld. CIT(A) ex parte, there having been no compliance on the part of the assessee during the appellate proceedings.

During the course of hearing before us, the Ld. Counsel for the assessee submitted that the assessee is an aged and illiterate agriculturist belonging to a rural background and, therefore, could not furnish the requisite details called for by the Assessing Officer during the course of assessment proceedings. With regard to the non-compliance before the Ld. CIT(A), it was submitted that the counsel appearing for the assessee had failed to file a response before the Ld. CIT(A), as a result whereof the appeal came to be decided ex parte. It was accordingly prayed that an effective opportunity be granted to the assessee to furnish the relevant explanation and supporting evidence.

As regards Grounds Nos. 6 and 7, the Ld. DR submitted that the issue relating to the taxability of interest received on compensation/enhanced compensation on acquisition of land stands covered against the assessee by the order of the Coordinate Bench of the Tribunal in ITA No. 463/CHD/2023, order dated 11 November 2025. In the said order, the Tribunal has held that such interest is taxable under section 56(2)(viii) read with sections 145B(1) and 57(iv) of the Income-tax Act, 1961 ("the Act"). Paragraph 66 of the said order reads as under:

The Ld. AR, fairly, agreed that the aforesaid issue stands covered by the decision of the Coordinate Bench.

Respectfully following the aforesaid decision of the Coordinate Bench, and in the absence of any contrary decision having been brought to our notice, Grounds Nos. 6 and 7 are dismissed.

By way of Grounds Nos, 8, 9 and 10, the assessee has challenged, inter alia, the additions of Rs. 37,04,474/- and Rs. 4,97,600/- made under section 69A of the Act on account of credits appearing in the assessee's bank account, the rejection of the assessee's claim of agricultural income, and the disallowance of the claim made under section 80C of the Act.

We have considered the rival submissions and perused the material available on record. It is an undisputed position that the proceedings before the Ld. CIT(A) culminated in an ex parte order on account of non- compliance by the assessee. The Ld. counsel for the assessee has explained the circumstances leading to such non-compliance and has sought an opportunity to place the relevant explanation and documentary evidence on record.

Having regard to the nature of the issues involved, particularly the additions made under section 69A of the Act and the assessee's claims relating to agricultural income and deduction under section 80C, we are of the considered view that the aforesaid grounds deserve to be adjudicated afresh after affording the assessee an effective opportunity to substantiate its claims.

Accordingly, in the interest of substantial justice, Grounds Nos. 8, 9 and 10 are restored to the file of the Ld. CIT(A) for fresh adjudication in accordance with law. The Ld. CIT(A) shall consider the explanation and documentary evidence that may be furnished by the assessee and shall thereafter adjudicate the aforesaid grounds on merits, without being influenced by the observations made in the impugned order.

Needless to say, the assessee shall be afforded adequate and reasonable opportunity of being heard and shall be permitted to furnish all relevant documentary evidence in support of its claims. The assessee is also directed to extend full cooperation and comply with the notices issued by the Ld. CIT(A) within the time prescribed.

Ground No.4 and 5 is general in nature and do not call for any separate adjudication.

By way of Grounds Nos. 1, 2 and 3, the assessee has challenged the jurisdiction of the Assessing Officer. The contention of the assessee is that jurisdiction over its case vested with the ITO, Ward-1, Ambala, before whom the assessee had been regularly filing its returns of income. It has accordingly been contended that the ITO, Ward-3, Yamuna Nagar, lacked jurisdiction to issue notice under section 148 of the Act and that the DCIT, Yamuna Nagar, consequently lacked jurisdiction to complete the assessment.

The assessee has further contended that the reasons recorded for issuance of notice under section 148 of the Act incorrectly stated that the assessee had not filed a return of income for Assessment Year 2015-16, whereas, according to the assessee, a return had in fact been filed. On this basis, it has been contended that the proceedings initiated under sections 147/148 of the Act were liable to be treated as invalid.

The Ld. DR, on the other hand, placed reliance upon the orders of the authorities below and the provisions of section 124(3)(a) of the Act, which are reproduced hereinbelow: “ (a) where he has made a return under sub-section (1) of section 115WD or under sub-section(1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section(2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier.” 16. It was submitted that the proceedings were initiated on the basis of information received by the Department regarding interest on compensation for acquisition of land received by the assessee. The information available with the Department apparently contained the assessee's address as falling within District Yamuna Nagar. Since apparently no return of income had been filed before the Assessing Officer having jurisdiction over the address reflected in the information, the ITO, Ward-3, Yamuna Nagar, issued notice under section 148 of the Act and proceeded with the reassessment proceedings.

We have considered the rival submissions and perused the material available on record.

It is evident from the record that the assessee filed a return of income on 5 December 2019 in response to the notice under section 148 dated 14 May 2018. The assessee thereafter participated in the assessment proceedings before the ITO, Ward-3/DCIT, Yamuna Nagar. 19. It is further evident from the assessment order that the proceedings were initially undertaken by the ITO, Ward-3, Yamuna Nagar, and that jurisdiction over the case was subsequently transferred to the DCIT, Yamuna Nagar, under section 120 of the Act. The DCIT, Yamuna Nagar, thereafter completed the assessment.

The assessment order dated 12 December 2019, passed under section 147 read with section 143(3) of the Act, was passed manually and recorded the address of the assessee as Village Bhatoli, District Yamuna Nagar.

Significantly, the assessee did not raise any objection regarding the jurisdiction of the Assessing Officer either at the time of issuance of notice under section 148 or during the course of the assessment proceedings. On the contrary, the assessee filed the return of income in response to the notice issued under section 148 and participated in the assessment proceedings before the concerned Assessing Officer.

In these circumstances, the assessee, having participated in the proceedings without raising any objection as to the jurisdiction of the Assessing Officer within the prescribed time, cannot subsequently challenge the jurisdiction after completion of the assessment, having regard to the specific statutory bar contained in section 124(3)(a) of the Act.

The provisions of section 124(3)(a) are intended to ensure that an objection to the jurisdiction of an Assessing Officer is raised at the appropriate stage and not after the assessment proceedings have culminated. The assessee's conduct in participating in the assessment proceedings, filing the return in response to the notice under section 148, and not raising any objection before the Assessing Officer assumes significance in determining the maintainability of the jurisdictional objection at this stage.

Accordingly, in view of the facts and circumstances of the case and having regard to the provisions of section 124(3)(a) of the Act, the challenge to the jurisdiction of the Assessing Officer, raised by the assessee after completion of the assessment proceedings, is rejected.

Grounds Nos. 1, 2 and 3 are, accordingly, dismissed.

In the result, Grounds Nos. 1, 2, 3, 6 and 7 are dismissed, whereas Grounds Nos. 8, 9 and 10 are allowed for statistical purposes and restored to the file of the Ld. CIT(A) for fresh adjudication in accordance with law. Ground No.4 and 5 are of general in nature and do not call for any separate adjudication.