KRISHAN KUMAR BHATNAGAR,GHAZIABAD vs. THE ITO WARD, 2(1)(3), GHAZIABAD, GHAZIABAD

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ITA 2585/DEL/2025Status: DisposedITAT Delhi06 February 2026AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal acknowledged the contentions raised by the assessee in the grounds of appeal regarding the lack of proper opportunity of being heard. Specifically, the short interval between the show cause notice and the order, and the alleged non-service of the Section 148 notice were noted. The Tribunal observed that the assessee had not participated in the proceedings before the NFAC. Considering the totality of the facts and circumstances, and in the interest of justice, the Tribunal decided to restore the issues to the file of the Assessing Officer. The AO was directed to grant one final opportunity to the assessee to substantiate its claims and then decide the issues afresh based on the facts and applicable law. The assessee was also directed to appear before the AO and cooperate with the proceedings. The grounds of appeal were allowed for statistical purposes. The issue of whether the Section 148 notice was served was not definitively decided, but the matter was remanded for a fresh opportunity.

What were the facts?

The assessee, Krishan Kumar Bhatnagar, is an individual whose income is derived from house property, profession, and other sources. The assessment year in question is 2016-17. Proceedings were initiated under Section 148 of the Income-tax Act, 1961, concerning cash payments for the purchase of immovable property, as flagged by the Investigation Wing. The Assessing Officer (AO) passed an assessment order under Section 144 read with Section 147, making an addition of Rs. 1,14,99,120/- to the total income, resulting in an assessed income of Rs. 1,31,66,780/-. The assessee appealed to the National Faceless Appeal Centre (NFAC), which dismissed the appeal. The assessee then filed this appeal before the Income Tax Appellate Tribunal (ITAT). The assessee did not appear before the NFAC or the ITAT.

What were the issues?

1. Whether the National Faceless Appeal Centre (NFAC) erred in confirming the action of the Assessing Officer (AO) by not providing a proper opportunity of being heard, considering that a show cause notice was issued on 29.3.2022 and the order was passed on 30.3.2022, which is a very short period. 2. Whether the NFAC erred in confirming the action of the AO by issuing a notice under Section 148 of the Act which was allegedly never served on the assessee, and the assessee did not receive any notice prior to the show cause notice, thus denying an adequate opportunity of being heard. Assessee's Contentions: The assessee contended that the NFAC erred in confirming the AO's action by not providing a proper opportunity of being heard. Specifically, the short period between the issuance of the show cause notice (29.3.2022) and the passing of the order (30.3.2022) was highlighted. Furthermore, the assessee argued that the notice under Section 148 of the Act was never served, and no prior notice was received, thus violating the principles of natural justice. Revenue's Contentions: The Departmental Representative (DR) submitted that the departmental authorities had passed reasoned orders. The DR also noted that the assessee had not participated in the proceedings before the NFAC and that the appeal was rightly rejected by the NFAC.

Which sections of the Income-tax Act were involved?

Section 148,Section 144,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI

Before: AND

Hearing: 03/02/2026Pronounced: 06/02/2026

Date of hearing: 03/02/2026 Date of Pronouncement: 06/02/2026 ORDER

PER SUDHIR KUMAR, JUDICIAL MEMBER:

1.

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 21.2.2025 pertaining to A.Y. 2016- 17 arising out the assessment order passed u/s.147 r.w.s.144 of the Income-tax Act, 1961, (in short ‘the Act’).

2.

The brief facts of the case are that assessee is an individual and fetching income from house property, profession and other sources. The proceeding for assessment year 2016-17 initiated under section 148 on the issue of cash payment to purchase of immovable property pointed out by the Investigation Wing and assessed the income of Rs. 1,31,66,780/- under section 144 read with section 147 by making the addition of Rs. 1,14,99,120/-.

3.

Aggrieved the order of the AO, the assessee preferred the appeal before the Ld. NFAC who vide his order dated 21.2.2025 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.

4.

None is present for assessee. Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the Ld. NFAC. The appeal was rightly rejected by the Ld. NFAC.

5.

We have heard the Ld. DR and perused the material available on record. It was the contention of the assessee in the grounds of appeal that Ld. CIT(A) has erred in confirming the action of the AO by not providing proper opportunity of being heard as show cause notice was issued on 29.3.2022 and order passed on 30.3.2022. It was further contended that CIT(A) erred in confirming the action of the AO by issuing notice under section 148 of the Act were never being served on the assessee. The assessee has not received any notice prior to show cause notice thus, opportunity of being heard is not provided. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issues to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its claim and decide the issues as per fact and law. The assessee is also directed to appear before the Assessing officer and co- operate in the proceedings. The grounds raised

by the assessee are accordingly allowed for statistical purposes.

6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court 06.02.2026.

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