SANDEEP GUJRATI,INDORE vs. ITO-5(1), INDORE, INDORE

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ITA 298/IND/2025Status: DisposedITAT Indore27 October 2025AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Assessing Officer's order was not sustainable. The Tribunal noted that the AO taxed the entire sale consideration of the property as capital gain without allowing the deduction of the cost of acquisition, which is contrary to the provisions of Section 48 of the Act. Considering the principle of natural justice and the fact that no prejudice would be caused to the revenue, the Tribunal decided to remand the matter back to the Assessing Officer for fresh adjudication. This was done at the risk and responsibility of the assessee, subject to the condition that the assessee pays a cost of Rs. 2,000/- to the 'Prime Minister National Relief Fund' and submits the receipt to the AO. The AO was directed to provide a necessary opportunity of hearing and pass an order uninfluenced by the earlier order. The assessee was also directed to remain vigilant and ensure participation in hearings, failing which the AO would be at liberty to pass an appropriate order. No issue was expressly left undecided.

What were the facts?

The assessee, Sandeep Gujrati, is in appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, against the order dated 05.03.2025 passed by the CIT(A)-NFAC, Delhi. This order arose from an assessment order dated 06.12.2019 passed by the ITO-5(1), Indore, under Section 147 read with Section 144 of the Income-tax Act, 1961, for Assessment Year 2012-13. The Assessing Officer (AO) initiated reassessment proceedings based on information from the Annual Information Return indicating the sale of an immovable property for Rs. 76,14,000/-. Despite issuing notices under Section 148 and Section 142(1), the assessee remained non-compliant, leading to an ex-parte assessment under Section 144. The AO taxed the entire sale consideration as capital gain. The assessee also remained non-compliant before the CIT(A). The assessee's representative admitted lapses in representation at lower levels but sought an opportunity to present relevant documents.

What were the issues?

1. Whether the ex-parte assessment order passed by the Assessing Officer under Section 144, taxing the entire sale consideration of Rs. 76,14,000/- as capital gain without allowing deductions, is sustainable in law, considering the assessee's non-compliance? Assessee's Contention: The assessee admitted lapses in representation before the lower authorities but submitted that all relevant details and documents for the transaction have been collected. The assessee prayed for an opportunity to present these before the Assessing Officer by restoring the matter for fresh adjudication in the interest of justice. Revenue's Contention: The Revenue's Senior Departmental Representative stated that they would have no objection against remanding the case to the Assessing Officer, provided the Tribunal gives stricter directions to the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 48

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri N.D. Patwa, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 14.10.2025Pronounced: 27.10.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first-appeal dated 05.03.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 06.12.2019 passed by learned ITO-5(1), Indore [“AO”] u/s 147 r.w.s. 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

2.

Ld. AR for assessee withdraws the adjournment application filed and prays that the case may be heard. Ld. DR does not have any objection.

Hence, the adjournment application is allowed to be withdrawn and hearing of case is proceeded.

3.

The orders of lower-authorities were perused and deliberated. It emerged during hearing that the orders of AO as well as CIT(A) are ex-parte.

The AO initiated proceeding u/s 147 for AY 2012-13 on the basis of information available in Annual Information Return revealing that the assessee sold an immovable property situated at Gram – Bardari, Tehsil – Dhar, Indore for Rs. 76,14,000/-. During proceedings, the AO issued notices u/s 148 followed by notices u/s 142(1) but finding no or vague response from assessee, the AO noted non-compliant attitude of assessee and made ex-parte assessments u/s 144. The AO assessed entire sale consideration of Rs. 76,14,000/- as taxable capital gain. Before CIT(A) also, the assessee has remained non-compliant. During discussions, Ld. AR for assessee admitted assessee’s lapse in representation at the lower level but, however, submitted that the assessee has collected all relevant details/documents of the transaction to enable a proper representation before AO. He prayed that in the interest of justice, an opportunity may be given to assessee by restoring this matter back to the file of AO for a fresh adjudication.

4.

Ld. DR for revenue submitted that he would have no objection against remanding these cases to AO but the bench must give stricter direction to assessee.

5.

We have considered submissions of both sides and carefully perused the orders of lower-authorities. We have already noted the precise facts in earlier paras. On perusal of assessment-order, we also find that the AO has taxed entire sale consideration of property as capital gain without giving deduction of cost of acquisition, which is not in accordance with the provisions of section 48 of the Act. Therefore, the AO’s order is not sustainable. After a careful consideration of facts; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of AO, we remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee and subject to the condition that the assessee shall pay a cost of Rs. 2,000/- to ‘Prime Minister National Relief Fund’ and submit receipt to AO. Needless to mention that the AO shall give necessary opportunity of hearing to assessee and pass appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

6.

Resultantly, this appeal is allowed for statistical purpose.

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