MARUTI JAKHUJI KUDE,PUNE vs. ITO WARD 9(3) PUNE, PUNE
What did the Tribunal hold?
The Tribunal noted that the CIT(A) order was ex-parte and did not address the issues raised by the assessee. Considering the assessee's failure to make proper compliance before the CIT(A), the Tribunal remitted the matter back to the CIT(A) for fresh adjudication with a reasonable opportunity of hearing.
What were the facts?
The assessee is an individual who did not file a return for AY 2016-17. Subsequently, the AO reopened the case and made an addition of Rs. 50 lakhs on account of alleged sale consideration from agricultural land. The assessee's appeal before the CIT(A) was dismissed ex-parte.
What were the issues?
Whether the reassessment proceedings were validly initiated and whether the addition made by the AO was justified on merits, particularly concerning the nature of the land and the transaction.
Which sections of the Income-tax Act were involved?
Section 147,Section 144B,Section 250,Section 148A,Section 149,Section 148,Section 2(14),Section 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & MS.ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2016-17 is directed against the order dated 02.09.2024 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 20.03.2024 passed u/s.147 r.w.s144B of the Act.
Assessee has raised following grounds of appeal :
“On facts and in law, 1] The Ld. CIT(A) has erred in confirming the taxable income of the appellant at Rs.52,52,000/-. The additions made without considering the fact of the case are illegal and unsustainable in law and the same may please be deleted.
Maruti Jakhuji Kude 2] The Ld. CIT(A)/NFAC has erred in dismissing the case ex-parte without waiting for the appellant to furnish the submission and evidences. The Ld. CIT(A)/NFAC ought to have appreciated the appellant could not respond to notice as notices were sent on inoperative and old email ID of the appellant which was not frequently used.
2.1] The Ld. CIT(A)/NFAC erred in dismissing the contention of the appellant only on the ground that no submission was made without appreciating the facts explained in statement of facts. The matter may therefore please be set aside at appropriate level as it involves verification of evidences etc.
3] The Ld. CIT(A)/NFAC failed to appreciate that the reopening of the case u/s. 148A r.w.s. 149 of the Act is bad in law / time barred and consequently, assessment order passed is also void ab-initio.
3.1] The Ld. AO erred in reopening the case u/s. 148 for the year beyond the period of 3 years even when the evidences indicated income escapement amount which was lesser than Rs. 50 Lakhs.
4] The Ld. AO erred in taxing an amount of Rs.50,00,000/- as short term capital gain in respect of impugned transaction of sale of land during the year without considering different aspects of the factual matrix.
4.1] The Ld. AO failed to appreciate that the land under consideration was a rural agricultural land not being a 'Capital Asset' u/s. 2(14) of the Act and therefore question of capital gain and taxability thereof does not arise at all.
4.2] The Ld. AO ought to have appreciated that impugned sale deed itself is proposed to be cancelled as the buyer has not paid any part of the consideration to the appellant or his family till date and accordingly it has filed a suit in the court to cancel the agreement. So when no transfer has took place in this case, there is no question of any capital gain tax.
4.3) No capital gain said to have accrued to the appellant when no consideration is received by the appellant. The addition made in the hands of the appellant is thus unjustified which needs to be quashed.
Maruti Jakhuji Kude 5) Without prejudice, the Ld. AO failed to appreciate that the share of the appellant in the consideration was restricted to Rs.25,00,000/- only and balance amount was to be paid to the appellant's father as per the agreement and capital gain if any is to be computed accordingly. The Ld. AO has wrongly considered the so called collective amount as received by the appellant only on the basis of presumptions.
6] Without prejudice, the Ld. AO erred in taking entire amount of Rs.50,00,000/- as short term capital gain without appreciating that it was ancestral land acquired even before 01.04.1981 and was accordingly long term assets. The Ld. AO also erred in not granting deduction for cost of acquisition, cost of improvements, indexation thereon.
7] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Brief facts of the case are that the assessee is an individual and did not file the return of income u/s.139(1) of the Act for A.Y. 2016-17. Subsequently, based on the information about the transaction of immovable property, assessee was served with notice u/s.148 of the Act. During the course of re-assessment proceedings, partial compliance was made by the assessee. Ld. Assessing Officer (AO) concluded the assessment making addition of Rs.50.00 lakh for the alleged sale consideration received from sale of Agricultural land. Income assessed at Rs.52,52,000/- after making addition of Rs.50.00 lakh referred above to the returned income of Rs.2,52,000/- disclosed by the assessee in the return filed in compliance to notice u/s.148 of the Act.
Dissatisfied with the addition made by the AO, assessee preferred appeal before ld.CIT(A) but the assessee failed to make any submission in support of its grounds of appeal resulting into dismissal of appeal. Aggrieved assessee is now in appeal before this Tribunal.
Ld. Counsel for the assessee referring to the grounds of appeal submitted that the impugned order is exparte. He also raised a legal issue stating that even when the alleged escapement of income is less than Rs.50.00 lakh, notice u/s.148 of the Act has been issued beyond the period of three years. He also submitted that even on merits, the property in question is a joint property but the total addition has been made in the hands of assessee.
On the other hand, ld. DR supported the orders of the lower authorities.
We have heard the rival contentions and perused the record placed before us. We notice that the impugned order is exparte and ld.CIT(A) has not dealt with any of the issues raised in the instant appeal including the legal issue challenging the validity of notice u/s.148 of the Act. Before us, ld. Counsel for the assessee has stated that the escapement of income is less than Rs.50.00 lakh. However, the addition made by ld. AO is Rs.50.00 lakh and there was no information provided by the assessee during the course of re-assessment proceedings about the transaction in question which was claimed to be a joint property. However, considering the fact that assessee failed to make proper compliance before ld.CIT(A), we deem it proper to remit back all the issues raised in the instant appeal including legal issue to the file of ld.CIT(A) for afresh adjudication. Ld.CIT(A) in the set-aside proceeding shall allow assessee with a reasonable opportunity of hearing. Assessee is at liberty to adduce evidence in his support. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 03rd day of September, 2025.
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