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Facts
The assessee received compensation for land acquisition, which was enhanced by a district court order. The assessee filed an appeal against the initial compensation paid. The Assessing Officer (AO) passed an order u/s.144 for the Assessment Year 2015-16, assessing income at Rs.41,09,140/-. The assessee appealed this order to the CIT(A).
Held
The Tribunal admitted additional evidence, including court orders and bank guarantees, stating they go to the root of the issue. The Tribunal set aside the order of the Assessing Officer and remanded the case for denovo adjudication in light of the additional evidence. The assessee was directed to file all relevant documents before the AO, who was to provide an opportunity of being heard.
Key Issues
Whether the AO erred in completing the assessment without issuing a notice under section 143(2) and by issuing an order u/s.144, and whether additional evidence should be admitted and considered for a de novo assessment.
Sections Cited
143(2), 144, 142(1), 57, 145A(b), 45(5)(b), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
Assessment Year: 2015-16 Shivaji Vithalrao Narhare, V The Income Tax Officer, Plot No.236, Suraya Bungal, s Ward-1, Latur. Avishkar Housing Society, RTO Office, Babalgaon Roads, Sarola, Latur – 413512. Maharashtra. PAN: AAHPN3610J Appellant/ Assessee Respondent / Revenue Assessee by Mr.Govind D. Chevale - AR Revenue by Shri Arvind Renge – Addl.CIT(DR) Date of hearing 29/07/2025 Date of pronouncement 30/07/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 08.04.2024, emanating from order u/s.144 of the Income Tax Act, 1961, dated 27.12.2017. The Assessee has raised following grounds of appeal :
“1) On the facts and in the circumstances of the case and in law, the learned AO erred in completing the assessment without issuing notice under section 143(2) of the Act. Therefore, the assessment order passed by the learned AO is null and void. The appellant hereby prays that the order under section 144 of the Act be quashed.
2) On the facts and in the circumstances of the case and in law, the learned AO erred in issuing an order under section 144 of the Act without because the Appellant had submitted the details requested vide notice issued under section 142(1) of the Act issued by the learned AO. The appellant hereby prays that the order under section 144 of the Act be quashed.
3) On the facts and in the circumstances of the case and in law, the learned AO erred in making the addition of Rs 39,13,072/- under section 57 (iv) rws 145A(b) of the IT act. The appellant hereby prays that the addition of Rs 39,13,072/- may please be deleted.
4) The appellant hereby reserves the right to add, amend, alter, delete, or raise any additional ground/s on or before the hearing date.”
Submission of ld.AR : 2. The ld.AR for the Assessee filed a paper book containing orders of District Court, Hon’ble Bombay High Court, Copy of Bank Guarantee, Copy of Order of Hon’ble Bombay High Court.
2.1 The written submission filed by the ld.AR is reproduced here as under :
➤ The assessee Mr. Shivaji Vithalrao Narhare is resident of India and farmer and a senior citizen residing in Latur, Maharashtra. The assessee owned a land admeasuring 86 R at village Harangul (Bk), Taluka Latur, District Latur These lands were acquired by the Govt. of Maharashtra for MIDC Latur during the year 1992 for which an order was passed under section 18 of the Land Acquisition Act (LAA), 1894, awarding compensation of Rs 87,309/- Land compensation received by assesse 18/11/1992 ➤ Assesse filed appeal on 21-07-1999 against compensation paid by the Govt. of Maharashtra, MIDC Latur in district court Latur Honorable district court pronounced its order on 26-09-2012 enhancing the compensation by awarding additional compensation to the assessee of Rs. 1,56,52,289/- Exhibit -1 - District court order with consideration.
Compensation from MIDC on account of the acquisition of agricultural land on 07/05/1992 along with interest as per the district court order.
Details of compensation working are as follows: Particulars Amount Land Consideration 20,82,060 30% Land Premium 6,24,617 Total land Consideration 27,06,677 Interest on delay payment (18/11/1992 to 12,07,595 03/01/1998) Consideration with Interest as of 03/01/1998 39,14,272 Original land consideration received 87,307 Balance Land Consideration 38,26,965 Interest (18/11/1992 to 17/11/1993) 3,44,427 Interest (18/11/1993 to 17/11/2013) 1,14,80,897 Total Interest (18/11/1992 to 17/11/2013) 1,18,25,324 Due as per District Court Order 1,56,52,289 Received 78,26,144 Balance 78,26,145 Details of compensation working as per Honorable Bombay High Court Aurangabad Bench are as follows :
Particulars Amount Land Consideration 89,440/- 30% Land Premium 26,832/- Total land Consideration 1,16,272/- Interest on delay payment (07/05/1992 to 79,014/- 03/01/1998) Consideration with Interest as of 03/01/1998 1,95,286/- Original land consideration received 87,307 Balance Land Consideration 1,07,979/- Interest @9% from 04/01/1998 to 23/12/2021 2,33,102/- Total Amount Due With interest 3,41,081/- Received 78,26,144/- Deposit to be Refunded 74,85,064/- Against district court order, the State of Maharashtra through the Maharashtra Industrial Development Corporation filed a statutory appeal before THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD since it did not accept any portion of the award passed by the District Court. Maharashtra Industrial Development Corporation filed first appeal stamp No 10535 of 2013 and Civil Application No 7578 of 2013 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD in 2013 against order passed by honorable district court Latur.
In this appeal, an application for stay of the order of the District Court was also moved before THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD Subsequently, for grant of stay, THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD passed an interim order asking the applicant to deposit the entire amount payable as per the judgment and award by the District Court, within a period of three months from the date of the said stay order The High Court also permitted the assessee to withdraw the said amount, if deposited by the applicant, which was subjected to furnishing of adequate security for the said amount, to the satisfaction of the Court Honorable THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD Exhibit-2-Stay Order Oct 2013.
Pursuant to this order Assesee Mr. Shivaji Vithalrao Narhare and other filed civil application No. 3411 of 2014 in FA/2800/2013 before The High Court Of Judicature Of Bombay Bench At Aurangabad to allow withdrawal of award money which is deposited by the MIDC Latur as per The High Court Of Judicature Of Bombay Bench At Aurangabad interim order CA No 7578 of 2013. The Court had accept the applicant/claimant is allowed to withdraw 50% amount (ie 25% of total compensation awarded by Reference Court) deposited in this Court on 13.1.2014 without furnishing any surety and the remaining 50% amount ie (25% of total compensation awarded by Reference Court) is allowed to be withdrawn on the applicant/claimant furnishing Nationalized Bank/Scheduled bank guarantee to the satisfaction of the Registrar (Judicial) of this Court and by giving an undertaking that if in the final judgment/order, it is found that, the amount withdrawn by the applicant/claimant is in excess than the amount to which they are entitled to, they shall refund the said amount within a period of SIX WEEKS from the date of final judgment/order. The applicant/claimant is further directed to keep the bank guarantee alive till the disposal of appeal and for a further period of six weeks from the date of final judgment/order-Exhibit-3-CA 3411 Interim Order.
Consequently as per interim order passed by The High Court Of Judicature Of Bombay Bench At Aurangabad CA No 3411/2014 in FA No 3044/2013 assessee Mr. Shivaji Vithalrao Narhare provided Bank Guarantee of Rs. 40,00,000/- on 23-06-2014 Exhibit-4-Bank Guarantee Janata Sahakari Bank Ltd, Pune, Latur Branch.
As per Interim Order assesse Mr Shivaji Vithalrao Narhare received 25% amount of total compensation awarded by reference Court on 05- 06-2014 of Rs.39,13,072/- and Rs.39,13,072/- on 21-07-2014 ie 25% of total consideration awarded by reference court after submission of Rs. 40,00,000/- bank guarantee as per Exhibit-4.
For the year under consideration, the assessee filed his return of income on 24-03-2017, reporting total income at Rs.1,96,070/- In the said return, the assessee declared exempt income of Rs. 78.26.144/-on account of additional compensation received by him in view of the proviso to section 45(5)(b).”
2.2 Ld.AR admitted that these Court Orders, Copy of Bank Guarantee was not produced during assessment proceedings or before the ld.CIT(A). Ld.AR further submitted that Assessee is a Senior Citizen who does not understand Income Tax Act, hence, inadvertently these documents were not produced at the time of assessment proceedings. The ld.AR submitted that these may kindly be taken into consideration as additional evidences.
Submission of ld.DR : 3. The ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). However, ld.DR had expressed no objection for admission of additional evidence.
Findings & Analysis : 4. We have heard both the parties and perused the records. In this case, Assessee’s appeal in A.Y.2015-16 was heard ex-parte on 12.08.2024 and order was passed 12.08.2024. The Assessee filed a Miscellaneous Application No.14/PUN/2025. The MA was heard on 20.06.2025 and the order was pronounced on 23.06.2025. Vide the order in MA No.14/PUN/2025, the ex-parte order in was recalled.
4.1 Thus, the present hearing is with reference to the recalled matter. In this case, Assessee filed Return of Income for A.Y.2015- 16 on 24.03.2017 declaring total income of Rs.1,96,070/-. Assessee’s case was selected for scrutiny to verify the claim of exempt income. The Assessing Officer noted in the assessment order that Assessee has not filed the specific details called by the Assessing Officer. As a result, Assessing Officer passed an order u/s.144 of the Income Tax Act, on 27.12.2017 assessing the income of the Assessee at Rs.41,09,140/-. Aggrieved by the Assessment Order, assessee filed appeal before the ld.CIT(A).
4.2 The ld.CIT(A) issued three notices and then dismissed the appeal of the assessee for non-compliance without discussing the grounds of appeal raised by the assessee.
5. We have observed that Assessee has filed an elaborate submission before us. Assessee also filed copies of the orders of Hon’ble Bombay High Court, Decree issued by District Court, Copy of Bank Guarantee given by Assessee with reference to the Hon’ble High Court’s Order. It is a fact that none of these documents were filed before the AO & ld.CIT(A). However, in the interest of justice, as these documents goes to the roots of the issue involved, we, under Rule 29 of Income Tax Appellate Tribunal Rules-1963, admit the additional evidence.
5.1 However, in the interest of justice, we set-aside the order of ld.Assessing Officer to ld.Assessing Officer for denovo adjudication in the light of additional evidence filed by Assessee. The Assessee is directed to file all these documents and any other documents which assessee needs to rely upon, before the Assessing Officer. The Assessing Officer shall provide opportunity of being heard to the assessee. The Assessee shall file necessary documents before the Assessing Officer. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30 July, 2025.