MOHAMMAD ZAHOOR QURESHI,BHOPAL vs. ITO-4(2), BHOPAL
Facts
The assessee sold an agriculture land for Rs. 82,00,000/- and purchased another for Rs. 47,65,865/-. The Assessing Officer (AO) treated the sale consideration as Rs. 1,16,00,000/- based on market value and added Rs. 68,34,135/- as Long Term Capital Gain. The AO also added Rs. 84,34,135/- as income from other sources on the purchase of another land.
Held
The Tribunal observed that the assessment order and the CIT(A)'s order were passed without giving the assessee a proper opportunity of being heard, violating the principles of natural justice. Therefore, both orders were set aside.
Key Issues
Whether the assessment order and the appellate order were passed in violation of the principles of natural justice due to lack of opportunity for the assessee to present their case.
Sections Cited
253, 143(1), 147, 148, 142(1), 144, 50C, 54F, 56(2)(vii)(6), 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI PARESH M JOSHI & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
Per Paresh M Joshi, J.M.:
This is an appeal filed by the Assessee Under Section 253 of
the Income Tax Act, 1961 (hereinafter referred to as the Act for
sake of convenience and ease) before this Tribunal. The assessee
is aggrieved by order bearing Number ITBA/NFAC/S/250/2023-
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 24/1058506259 (1) dated 06.12.2023 passed by CIT(A) Under
Section 250 of the Act which is hereinafter referred to as the
“Impugned order”. The Relevant Assessment Year is 2014-15
and the corresponding Previous year period is from 01.04.2013 to
31.03.2014. Delay of 176 days is pointed out by the Registry for
which sufficient cause is shown in the condonation of delay
application which is supported by an affidavit. The Ld. DR has
not objected to the same. Delay condoned. Appeal taken for
hearing.
FACTUAL MATRIX
2.1 That the assessee had filed his return of income on
26.02.2016 wherein a total income of Rs.2,14,400/- was
declared.
2.2 That the return of income was processed u/s 143(1) of the
Act.
2.3 That the Department of Income Tax had an information that
during the Financial Year 2013-14 the assessee had sold
immovable property (Agriculture land) with the boundaries of the
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 municipality for a sale consideration of Rs.82,00,000/- (Rupees
Eighty Two lakhs only) whereas the market value of the property
was Rs. 1,16,00,000/- (One Crore Thirty Two lakhs only).
2.4 That the assessee had purchased another agriculture land
situated at Basai, Tehsil Berasia, Bhopal for Rs.47,65,865/-
against market value of Rs.1,32,00,000/- (One Crore Thirty Two
Lakhs only).
2.5 That since the assessee did not filed return of Income (ROI)
the aforesaid facts/information formed the basis of satisfaction to
reopen the case Under Section 147 of the Act. That after taking
the necessary approval, under the Act, a notice U/s 148 of the
Act was accordingly issued to the assessee on 16.03.2019. This
notice was served upon the assessee though mail of ITBA, so
also by Speed Post on the last known address available in the
records of the Income Tax Department.
2.6. That in response to the above mentioned notice the assessee
neither filed Return of Income (ROI) nor filed any written reply to
the aforesaid notice issued u/s 148 of the Act.
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 2.7 That notice(s) issued Under Section 142(1) on 23.08.2019,
23.10.2019 & 09.11.2019 too were not complied by the assessee.
2.8 That a Show Cause Notice in terms of Section 144 of the Act
came to be issued to the assessee on 16.11.2019 whereby last
opportunity of being heard was afforded to the assessee for which
hearing was fixed on 16.11.2019, but on that date also nobody
attended the hearing nor any written submission was filed by the
assessee.
2.9 That in view of the aforesaid facts and circumstance the Ld.
A.O was left with no other option but to complete the assessment
as per best judgment by virtue of provisions contained in
Section 144 of the Act.
2.10 That basis information available with the department the
assessee had sold immovable property within municipal area for
a sale consideration of Rs.82,00,000/- whereas market value of
the property was Rs.1,16,00,000/-. The sale consideration as
per Section 50C of the Act was taken as Rs.1,16,00,000/- .
Further the assessee correspondingly had purchased another
land for a consideration of Rs.47,65,865/- against market value
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 of Rs.1,32,00,000/- on 05.10.2023. In view thereof exemption
u/s 54F to the tune of Rs.47,65,865/- was allowed and balance
amount of Rs.68,34,135/- (Rs.1,16,00,000/- (-) Rs.47,65,865/-)
was treated as undisclosed Long Term Capital Gain and added to
the total income of the assessee.
2.11 That assessee had purchased yet another piece of
agriculture land for Rs. 47,65,865/- against market value of Rs.
1,32,00,000/- on 05.10.2013 and that by virtue of Section
56(2)(vii)(6) of the Act the assessee ought to have shown Rs.
84,34,135/- (Rs.1,32,00,000/- (-) Rs. 47,65,865/-) as income
from other sources which was not done so. Therefore Ld. A.O
added Rs. 84,34,135/- to the total income of the assessee.
2.12 That Ld. A.O assessed and computed total income as
below:-
Total income as per return of income Rs.2,14,400/- (Return not filed) Add:- As per para 3 + Rs.68,34,135/- Add:- As per para 4 + Rs.84,34,135/- Total Income assessed u/s 144/147 Rs.1,52,68,270/-
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 2.13 That the aforesaid assessment order bears No.
20141070740 is dated 30.11.2019 which is hereinafter referred
to as the “Impugned Assessment Order” .
2.14 That the assessee being aggrieved by the aforesaid
assessment order prefers first appeal u/s 246A of the Act before
CIT(A) who by “Impugned Order” has dismissed the appeal.
2.15 That the assessee being aggrieved by the impugned order
has filed an appeal before this Tribunal and has raised following
grounds of appeal against the impugned order in Form 36 which
are as under:-
The Ld AO was not justified in passing the order. which is bad-in- law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. 2. The Ld CIT(A) was not justified in confirming the order, which is bad- in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. 3. The Ld CIT(A) was not justified in ex-parte dismissing the appeal of the appellant, without deciding the appeal on merits, and that a fair and meaningful opportunity was not available to the appellant to present his case. 4. The Ld CIT(A) was not justified in confirming the addition of Rs. 68.34.135/- as Long Term Capital Gain without considering the facts and circumstances of the case.
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 5. The Ld CIT(A) was not justified in confirming the addition of Rs. 84,34,135/-as Long Term Capital Gain without considering the facts and circumstances of the case. 6. The appellant carves leave to add, amend or modify any of the grounds of appeal”. 3. Record of Hearing
3.1 The hearing in the matter took place before this Tribunal on
03.03.2025 when the Ld. AR for and on the behalf of the
assessee appeared before us and interalia contended that
both the “Impugned Assessment Order “ and “Impugned
Order” are in violation of principle of natural justice, bad in
law and illegal. That the same should be set aside by this
Tribunal as no opportunity was afforded before impugned
orders came to be passed.
3.2 Per contra Ld. DR fairly conceded that orders of both the
lower authorities are indeed violative of principle of natural
justice and that they deserves to be set aside on ground of
violation of the principles of natural justice.
Observations,findings & conclusions.
4.1 We now examine the legality, validity and the proprietary of
the “Impugned Order” basis records of the case.
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 4.2 We have carefully perused records of the case and have
heard rival contentions.
4.3 We observe that “Impugned Assessment Order” is passed
u/s 144 of the Act. We observe that prior to the passing of
the “Impugned Assessment Order” the Ld. A.O had followed
due process of law u/s 148 & 142(1). In fact a show cause
notice u/s 144 too was issued. The assessee despite
opportunities after opportunities have remained non
complaint for reasons best known to him. In first appeal
u/s 246A of the Act the Ld. CIT(A) too seems to be have
given to the assessee following opportunities which are
tabulated as below:-
Date of Notice Date of Status compliance 17.03.2020 25.03.2020 No compliance 06.01.2021 21.01.2021 No compliance 03.11.2023 10.11.2023 No (Final opportunity) compliance
But assessee remained non complaint to the above
opportunities too. The Ld. CIT(A) in the impugned order
relying upon the judgment of Hon’ble Supreme Court of
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 India in case of CIT V/s BN Bhattacharya (1997) 118 ITR
461 (SC) and other decisions of ITAT wherein it is held that
preferring an appeal means more than formally filing it but
effectively pursuing it.
4.4 We basis records of the case and the rival submissions
made before us are of the considered view that there is no
doubt that there is no disposal of the assessment in
meritorious way and or on merits both before Ld. A.O and
Ld. CIT(A). We, therefore are of the considered view that
ends of justice requires one more opportunity be afforded to
the assessee as by way of final opportunity by the Ld. CIT(A)
to enable the assessee to present case on merits. This
Tribunal desires meritorious disposal of at least first appeal.
In the circumstances we set aside the impugned order and
remand back to the file of CIT(A) to pass a fresh order on
denovo basis. The assessee is simultaneously directed to
cooperate with the department and not to seek adjournment
unnecessary. Assessee is further directed to place on record
of CIT(A) all papers, documents, computation of income etc.
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Mohammad Zahoor Qureshi ITA No. 557/Ind/2024 – AY 2014-15 to enable CIT(A) to dispose off 1st appeal in meritorious way
by passing a reasoned order and that too as expeditiously as
possible.
Order
5.1 In the premises set out herein above the impugned order is
set aside as and by way of Remand on Denovo basis.
5.2 In result appeal of assessee is allowed for statistical
purpose.
Order pronounced in open court on 17.03.2025.
Sd/- Sd/-
(BIJAYANANDA PRUSETH) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक /Dated :17/03/2025 Dev/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore
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