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Facts
The assessee filed an appeal against the assessment order for AY 2015-16. The Assessing Officer made an addition of Rs. 52,37,590/- on account of long-term capital gains on sale of land, leading to a total income of Rs. 54,47,080/-. The CIT(A) dismissed the assessee's first appeal.
Held
The Tribunal found that the issue of whether the agriculture land sold fell within the radius of Bhopal Nagar Nigam city limits was not properly considered by the lower authorities. The Tribunal noted that the Assessing Officer had sought information from the Tehsildar but did not discuss the reply, and the CIT(A) also did not base the order on merits.
Key Issues
Whether the lower authorities properly ascertained the location of the land and provided a proper opportunity of being heard to the assessee before confirming the addition on capital gains.
Sections Cited
253, 143(3), 246A, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
the order bearing Number ITBA/NFAC/S/250/2023- 24/1058995516(1) dated 22.12.2023 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2015-16
Page 1 of 10 - A.Y. 2015-16 and the corresponding previous year period is from 01.04.2014 to 31.03.2015.
FACTUAL MATRIX 2.1 That as and by way of an assessment order the total income of the assessee exigible to tax was computed and assessed at Rs.54,47,080/-. The income shown as per the Return of Income was at Rs.2,09,500/-. An addition of Rs.52,37,590/- was made. Aggregate total income came to Rs.54,47,080/-.
Agriculture income was at Rs.2,94,500/-. That the aforesaid assessment order made u/s 143(3) of the Act is dated 28.12.2017 which is hereinafter referred to as the “impugned assessment order”.
2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal on the grounds and reasons stated therein. The core ground and reason for dismissal of the 1st appeal was as under:-
Page 2 of 10 - A.Y. 2015-16
“7. The facts of the case as noted above are that the appellant has not pursued the appeal despite being granted opportunities as elaborated in paras above. No details, documents or submissions have been provided to come to any conclusion other than those arrived at by the assessing officer in the order. During the appellate proceedings the appellant was given opportunities to put forth his case, but he did not upload any response despite service of notice(s). Considering all the facts and the circumstances of the case no interference with the order of the AO is called for. The appellate proceedings cannot be allowed to be held hostage by dilatory tactics on the part of the appellant and a complete disdain for statutory notices. Therefore, I find no infirmity in the order passed by the assessing officer.
In the result, the appeal is dismissed”.
2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:-
“1 The assessment order passed by learned lower authorities is bad in law and facts.
2 That the assessment order passed is illegal and unlawful.
3 The long term capital gain on sale of land of Rs.5237580.00 was assessed by the learned AO and added to the total income of the assesse resulting in the demand of Rs. 1627310.00 which is not correct and needs to be deleted.
4 That value of property considered at Rs 17005000.000 being market value as against actual consideration of Rs 14400000.00 is not acceptable.
5 That the learned lower authorities were not justified in not allowing proper and meaningful opportunity of being heard. Also the Learned CIT (Appeals), National Faceless E-Appeal Centre, was also not justified in not allowing proper lawful opportunity before confirming the addition.
Page 3 of 10 - A.Y. 2015-16
6 That on the facts and in the circumstances of the case the order of the learned lower authorities are vitiated on several grounds hence the same may kindly be quashed. 7 The appellant craves leave to add, amend, alter, vary and or withdraw any or all the above grounds of appeal
8. That the above grounds are independent to each other”.
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 01.09.2025 when the Ld. AR for and on behalf of the assessee appeared before us and stated that the registry has pointed out the delay of 73 days in preferring the present appeal. That Ld. AR has placed on record of this Tribunal a condonation of delay application along with an affidavit in support. It was contended by him basis that the delay of 73 days be condoned as the assessee is a farmer by occupation and is uneducated person. The assessee lacks proficiency to independently navigate the complexities of the Income Tax e-filing portal. The assessee had engaged the service of Shri Mohan Lachwani who was his regular counsel before the Ld. A.O. That after passing of the “impugned assessment order” the assessee’s counsel informed him that an addition of Rs.52,37,580/- has been made in the Page 4 of 10 - A.Y. 2015-16 “impugned assessment order” and subsequently he filed an appeal before 1st appellate authority and gave his counsel’s e- mail address antar@lachhwani.in for the future correspondences.
That after filing the appeal Shri Mohan Lachwani used to inform the assesse as and when the assessee used to visit him as his bank account was attached by the Department of Income Tax since the year 2018. Every time the assessee was informed by said counsel that his first appeal is subjudice one and that it would be disposed off in due course. Thereafter Covid-19 broke out and the assessee could not visit counsel’s office and he received updates regarding status of appeal only through telephonic conversations with him.
3.2 That in April 2024, the Income Tax Department started recovery proceedings for the pending tax demand. The assessee then approached CA Shri Jai Sobhani who through his junior helped the assessee out and after checking the portal CA Jai Sobhani informed to the assessee that 1st appellate order dated 22.12.2023 had been passed and sought copy from the assessee but as the assessee had not received the copy. That the assessee new CA Jai Sobhani filed the appeal somehow or the other on Page 5 of 10 - A.Y. 2015-16 02.05.2024 before this Tribunal. It was submitted by the Ld. AR that since assessee’s earlier advocate Shri Mohan Lachwani had not informed the assessee about the passing of the first appellate order there was a delay of 73 days which are bonafide. That the Ld. AR finally attributed delay to two main reasons (i) e-mail address on the Form 35 was of an earlier counsel (ii) the earlier counsel did not check income tax portal and the e-mail. It was also pleaded that the assessee should not be penalized for the errors or negligence of his counsel. Affidavit in support is placed on record. The Ld. DR appearing for and on behalf of the revenue submitted that the department has no objection if the delay is condoned. After hearing both the parties we condone the delay of 76 days as in our considered view the delay is bonafide and also sufficient cause has been shown. Accordingly the delay is condoned and appeal is admitted and taken up for hearing.
3.3 The Ld. AR then submitted that in sum and substance both the “impugned assessment order” as well as the “impugned order” are bad in law, illegal and not proper. It was contended that in the “impugned assessment order” the Ld. Assessing Officer has taxed the capital gain component. The Ld. AR
Page 6 of 10 - A.Y. 2015-16 brought to our notice that the core area of dispute is whether the subject land which was agriculture falls within the radius of Bhopal Nagar Nigam city limit or not. Further how far it is located from Bhopal Nagar Nigam city limit. In this regard the Ld. AR has by paper book submitted a copy of letter dated 04.12.2017 written by Ld. Assessing Officer during the course of the assessment proceedings by virtue of Section 133(6) of the Act to the Tehsildar, Tehsil Huzur, Dist. Bhopal requesting him to furnish aforesaid status with documents in support. Our attention was drawn to paper book page 35 para 9 which was a submission of the assessee wherein it was averred that the agriculture land which was sold was beyond the boundary of Municipal Corporation by more than 8 Km. The Ld. Assessing Officer in the “impugned assessment order” has not considered either the report of the Tehsildar if any nor the assessee claim.
His satisfaction about location of land is therefore subjective.
Hence it was submitted that the matter should be relegated back to the file of Ld. A.O so that correct facts could be ascertained afresh basis records. The Ld. AR also stated that he is withdrawing Rule 11 application made in the paper book. Per
Page 7 of 10 - A.Y. 2015-16 contra Ld. DR submitted that he is going by the orders of the lower authorities.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case as presented to this Tribunal by both Ld. AR & Ld. DR to determine the legality, validity of the “impugned order” basis law and by following due process.
4.3 We basis records of the case and after hearing and upon examining the rival contentions canvassed before us by both the parties are of the considered view that both the “impugned assessment Order” and so also the “impugned order” are not meritorious in nature. The Ld. AR has demonstrated before us basis paper book that a letter dated 04.12.2017 was issued by the Ld. A.O to the Tesildar, Tehsil Huzur, Dist. Bhopal requesting him to certify basis revenue records as to whether the subject agriculture land admeasuring 3.5 acres is situated within how
Page 8 of 10 - A.Y. 2015-16 many kms from the Bhopal Nagar Nigam City limit. It appears to us basis “impugned assessment order” that reply if any of said Tehsildar is not discussed at all in the “impugned assessment order”. Further the “impugned order” of Ld. CIT(A) too is not based on merit of the case. While it is true that the assessee has remained non-compliant before Ld. CIT(A) but at least Ld. CIT(A) ought to have passed the meritorious order by gathering facts from the department in a meritorious manner. This tribunal desires meritorious disposal of both “impugned assessment order” as well as “impugned order” as income of the assessee must be determined on real time basis. In the circumstances, we set aside the “impugned order” and remand the case back to Ld.
A.O to pass a speaking order on merits after taking into consideration of report/reply of Tehsildar, Huzur, Bhopal if any.
It is expected that report of Tehsildar would be shared by Ld. Assessing Officer so that assessee can meet his case.
Order 5.1 In the premises set out herein above, “impugned order” is set aside as and by way of remand to Ld. A.O on denovo basis.
Page 9 of 10 - A.Y. 2015-16 5.2 In result, appeal of the assessed is allowed for statistical purpose.
Order pronounced in open court on 09.09.2025.