MOHAMED FAROOK FAKIR MOHAMED,KHARGHAR vs. INCOME TAX OFFICER, WARD 1, PANVEL, PANVEL
What did the Tribunal hold?
The Tribunal noted that the assessee's counsel fairly admitted that some legal issues were raised for the first time before the Tribunal and some issues were not adjudicated by the CIT(A). The Revenue had no objection if these issues were admitted and restored to the file of the CIT(A). The Tribunal observed that the CIT(A) had summarily dismissed the assessee's appeal without dealing with crucial legal grounds related to the validity of the notice under section 148 and order under section 148A(d) being issued by the Jurisdictional AO instead of the Faceless Assessing Officer, and the alleged mechanical grant of approval under section 151. The Tribunal found that new legal issues were raised before it, which went to the root of the matter and did not require fresh investigation, thus admitting them in light of the Hon'ble Apex Court's judgment in National Thermal Power Co. Ltd. Vs. CIT. Furthermore, the Tribunal noted that the CIT(A) had not adjudicated some legal issues raised before it. Citing the Delhi High Court's judgment in Divine Infracon Pvt. Ltd. Vs PCIT, the Tribunal held that it had no jurisdiction to decide grounds not arising from the impugned order of the first appellate authority. Therefore, the Tribunal set aside the impugned order and allowed the grounds of appeal for statistical purposes, remitting the matter back to the file of the CIT(A) for necessary adjudication of all issues. The assessee was directed to provide updated contact details and remain vigilant. No specific finding was given on the additions made under sections 56(2)(vii)(b) and 69.
What were the facts?
The assessee, Mohamed Farook Fakir Mohamed, filed an appeal before the ITAT Pune against the order dated 02.01.2026 passed by the NFAC, Delhi, which arose from an assessment order dated 04.03.2025 passed by the AO under sections 147, 144, and 144B of the Income Tax Act, 1961, for Assessment Year 2020-21. The total income was assessed at Rs. 43,41,558/-. The assessee raised several grounds of appeal, including issues related to the validity of the reassessment proceedings, the sanction for reassessment, the issuance of notices by the Jurisdictional AO instead of the Faceless Assessing Officer, the absence of a notice under section 143(2), and specific additions made under sections 56(2)(vii)(b) and 69. The assessee also contended that the CIT(A) failed to provide an effective opportunity of being heard and passed a non-speaking order.
What were the issues?
The Tribunal had to decide the following questions: 1. Whether the reassessment proceedings initiated under section 147 r.w.s. 144 r.w.s. 144B of the Act are valid, considering the grounds raised by the assessee? 2. Whether the sanction granted under section 151 of the Act was valid, given it was allegedly not signed? 3. Whether the sanction under section 151 was granted mechanically without independent application of mind? 4. Whether the Notice u/s.148 and Order u/s.148A(d) were validly issued by the Jurisdictional AO instead of the Faceless Assessing Officer as per the e-Assessment Scheme, 2022? 5. Whether the reassessment is void due to the absence of a statutory notice under section 143(2)? 6. Whether the appellate order passed by the CIT(A) under section 250 is liable to be set aside for violating principles of natural justice and not providing an effective opportunity of being heard? 7. Whether the CIT(A) erred in confirming the additions made under section 56(2)(vii)(b) and section 69 of the Act? Assessee's Contentions: - The reassessment order is bad in law and liable to be quashed. - The sanction under section 151 was not digitally or physically signed, rendering it invalid and the reassessment proceedings void ab initio. - The sanction was granted mechanically without independent application of mind, vitiating the proceedings. - Notices under section 148 and order under section 148A(d) were issued by the JAO instead of FAO, making them without jurisdiction. - The assessment is void due to the non-issuance of notice under section 143(2). - The CIT(A)'s order was passed without providing an effective opportunity of being heard, violating principles of natural justice. - The CIT(A) confirmed additions without properly considering submissions and disposing of objections, resulting in a non-speaking order. - Section 56(2)(vii)(b) ceased to apply after 01.04.2017, and additions made under it are without jurisdiction. - The immovable property was not received in the relevant previous year for section 56(2)(vii)(b) or 56(2)(x) to apply. - The AO should have considered the stamp duty value as per the previous year of agreement (2014-15) and not the current year. - The AO should have referred the matter to the DVO for valuation. - The addition under section 69 is unjustified as the investment is fully explained. - The AO ought to have passed an order under section 147 r.w.s. 143(3) r.w.s. 144B instead of section 147 r.w.s. 144 r.w.s. 144B. Revenue's Contentions: The Revenue supported the order of the CIT(A). No specific arguments were recorded for the Revenue on the individual grounds.
Which sections of the Income-tax Act were involved?
Section 147,Section 144,Section 144B,Section 250,Section 148A,Section 148,Section 151,Section 56(2)(vii)(b),Section 56(2)(x),Section 69,Section 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of the assessee pertaining to A.Y. 2020- 21 is directed against the order dated 02.01.2026 of Ld. NFAC, Delhi framed u/s 250 of the Income Tax Act 1961 (in short ‘the Act’) which is arising out of Assessment order dated 04.03.2025 passed u/s.147 r.w.s.144 r.w.s.144B of the Act.
Assessee has raised following grounds of appeal :
“1. On the facts and in the circumstances of the case and in law, Ld. Commissioner of Income-tax (Appeals) ["CIT(A)"] erred in upholding the reassessment framed by the Ld. Assessing Officer ["AO"] u/s.147 r.w.s.144 r.w.s.144B of the Income-tax Act, 1961["the Act"], determining the total income after making additions aggregating to Rs. 43,41,558/-, which order is bad in law and liable to be quashed.
Ld. CIT(A) erred in not appreciating that the sanction granted u/s.151 of the Act dated 27.03.2024 by the Principal Commissioner of Income-tax, Thane-1 was neither digitally signed nor physically signed, and therefore does not constitute a valid sanction in the eyes of law. Appellant submits that the absence of a valid sanction renders the Order u/s.148A(d), notice issued u/s.148 and the consequent reassessment proceedings void ab initio.
Ld. CIT(A) erred in not appreciating that the alleged sanction u/s.151 was granted in a mechanical manner without independent application of mind by the sanctioning authority. Appellant submits that such mechanical approval vitiates the entire reassessment proceedings and the assessment order deserves to be quashed as void ab initio
Ld. CIT(A) erred in upholding the validity of the Notice u/s.148 and Order u/s.148A(d) both dated 28.03.2024, which were issued by the Jurisdictional Assessing Officer ["JAO"] instead of the Faceless Assessing Officer ["FAO"] as mandated under the e-Assessment of Income Escaping Assessment Scheme, 2022. Appellant submits that the said notice and order are without jurisdiction, rendering the reassessment proceedings void.
Ld. CIT(A) erred in not appreciating that Ld. AO completed the reassessment without issuing and serving the statutory notice u/s.143(2) of the Act. Appellant submits that issuance of notice u/s.143(2) is a jurisdictional requirement, failure of which renders the assessment void ab initio.
Ld. CIT(A) erred in passing the appellate order u/s.250 dated 02.01.2026 without providing the Appellant an effective opportunity of being heard. Appellant submits that not even a single hearing notice was issued, and therefore the impugned order is passed in violation of section 250 and principles of natural justice, and is liable to be set aside.
Ld. CIT(A) erred in confirming the Assessment Order passed u/s.147 r.w.s. 144 r.w.s. 144B without appreciating that the Ld. AO passed the order without properly considering the submissions filed by Appellant and without disposing of the objections raised, thereby passing a non-speaking order in violation of the principles of natural justice.
Ld. CIT(A) erred in not appreciating that section 56(2)(vii)(b) ceased to apply after 01.04.2017, having been replaced by section 56(2)(x). Appellant submits that the addition made under the repealed provisions of section 56(2)(vii)(b) in AY 2020-21 is without jurisdiction and liable to be deleted
Ld. CIT(A) erred in confirming the addition of Rs. 31,42,558/- made by the Ld. AO u/s.56(2)(vii)(b)(ii) of the Act.
Appellant submits that the immovable property in question was not received during the Previous Year 2019-20 relevant to AY 2020-21, and therefore the provisions of section 56(2)(vii)(b) or even Section 56(2)(x) are not applicable in the year under appeal.
Ld. CIT(A) erred in confirming addition of Rs. 31,42,558/- u/s 56(2)(vii)(b) made by Ld. AO, without appreciating that Ld. AO ought to have considered Stamp Duty value as per the Previous Year of Agreement when consideration was fixed and part payment was made i.e. PY 2014-15, as per First and Second Proviso to Section 56(2)(vii)(b) or to Section 56(2)(x)(b). Appellant submits that in view of the facts and circumstances of the case as well as in law, the addition of Rs 31,42,558/- to total income of Appellant u/s 56(2)(vii) (b) of the Act is bad in law and deserves to be deleted.
Ld. CIT(A) erred in confirming the addition of Rs. 31,42,558/- u/s.56(2)(vii)(b)(ii) without directing Ld. AO to refer the matter to the Departmental Valuation Officer, as contemplated under the first proviso to section 56(2)(vii) / the third proviso to section 56(2)(x)(b).
Ld. CIT(A) erred in confirming the addition of Rs. 11,99,000/- made by Ld. AO u/s. 69 of the Act. Appellant submits that the investment stands fully explained with supporting evidence during the reassessment proceedings, and therefore the addition is unjustified and liable to be deleted.
Ld. CIT(A) erred in not appreciating that the Ld. AO ought to have passed Order w/s.147.r.w.s.143(3) r.w.s.144B of the Act instead of passing Order 147 r.w.s. 144 r.w.s.144B of the Act. Appellant submits that in view of the facts and circumstances of the case as well as in law, the Order u/s.147 r.w.s.144 r.w.s.144B of the Act deserves to be quashed.
Ld. CIT(A) erred in confirming Order passed by Ld. AO uw/s.147 r.w.s.144 r.w.s.144B of the Act. Appellant submits that in view of the facts and circumstances of the case as well as in law, Order passed u/s. 147 r.w.s.144 r.w.s.144B of the Act is bad in law and deserves to be quashed. Appellant prays for appropriate relief. Each of the above grounds of Appeal is without prejudice to one another. Appellant craves leave, to add, alter, amend or withdraw any of the above Grounds of Appeal.”
At the time of hearing, ld. Counsel for the assessee fairly admitted that some of the legal issues which were not raised before ld.CIT(A) have been raised before this Tribunal for the first time and some of the issues have not been adjudicated by ld.CIT(A). Ld. Sr. DR had no objection if the issues are admitted and restored to the file of ld.CIT(A) for necessary adjudication. Hes however supported the order of ld.CIT(A).
We have heard the rival submissions and perused the record placed before us. We observe that the assessee is an individual and is a non-filer. Assessment for A.Y.2 020-21 completed on 04.03.2025 assessed the income at Rs.43,41,558/-. The same was challenged before ld.CIT(A) along with raising legal issues relating to validity of notice u/s.148 and order u/s.148A(d) which were issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer as well as the issue that approval u/s.151 of the Act was granted in a mechanical manner without independent application of mind by the sanctioning authority. However, ld.CIT(A) has summarily dismissed the assessee’s appeal without dealing with these legal grounds. Now the assessee is in appeal before this Tribunal.
We find that certain new legal issues have been raised before this Tribunal. The legal issues raised in this appeal are hereby admitted in light of the judgment of Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. Vs. CIT (SC) (229 ITR 383) as they go to the root of the matter and no fresh facts are required to be investigated. We also find that ld.CIT(A) has not adjudicated some of the legal issues raised before it. In the light of these facts, we are of the considered view that the legal issues along with other issues are required to be remitted back to the file of ld.CIT(A) by virtue of judgment of Hon’ble Delhi High Court in the case of ‘Divine Infracon Pvt. Ltd. Vs PCIT’ [2025, 171 taxmann.com 92 (Del)], wherein their Hon’ble Lordship vide para 13 have categorically held that, the Tribunal has no jurisdiction to proceed to decide the ground which did not arise from the impugned order passed by first appellate authority, irrespective of such ground was raised in first appeal or not.
Impugned order is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes. Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 19th day of October, 2026. (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated : 19th October, 2026 Satish
आदेश की प्रतिलिपि अग्रेपिि /Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent.
The Pr. CIT concerned. 4. ववभागीय प्रनिनिधि, आयकर अपीलीय अधिकरण, “SMC" बेंच, पुणे / DR, ITAT, "SMC" Bench, Pune. 5. गार्ा फाइल / Guard File.
आदेशािुसार / BY ORDER, Sunil Kumar Kumar More //// More Date: 2026.10.25 10:53:16 +05'30' सहायक रजिस्ट्रार/
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