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Facts
The assessee, a private limited company, failed to file its return of income, leading the Assessing Officer (AO) to issue notices under Sections 148 and 142(1) based on information about immovable property transfer. Although the assessee filed an ITR, it was not e-verified and thus treated as invalid, leading to an assessment under Section 147 r.w.s. 144/144B with significant additions. The CIT(A) confirmed these additions as the assessee did not respond to notices, prompting the assessee to appeal to the ITAT with a condoned delay.
Held
The Tribunal, in the interest of justice, restored the entire matter to the Assessing Officer (AO) for fresh consideration. The AO was directed to provide the assessee one final opportunity to present all necessary details and arguments concerning the validity of re-assessment proceedings and the merits of additions. The assessee's grounds of appeal were allowed for statistical purposes, implying a re-adjudication at the AO level.
Key Issues
Whether the re-assessment proceedings initiated under Section 148/147 were valid; Whether the additions made by the Assessing Officer, including under Section 50C and disallowance of expenditure, were sustainable; Admission of additional legal ground.
Sections Cited
Section 148 of the Income Tax Act, 1961, Section 142(1) of the Income Tax Act, 1961, Section 151 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961, Section 144B of the Income Tax Act, 1961, Section 50C of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the order dated 24.12.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2015-16.
There is a delay of 203 days in filing of the appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
Facts of the case, in brief, are that the assessee is a private limited company and has not filed its return of income. Information was available with the department that the assessee for the impugned assessment year was in receipt of Rs.12,84,65,000/- towards transfer of immovable property. The Assessing Officer, therefore, after obtaining approval from the competent authority issued a notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.03.2021. Since the assessee did not respond to the notice dated 27.03.2021 the Assessing Officer issued a notice u/s 142(1) of the Act dated 10.11.2021. The assessee filed its return of income on 06.08.2021 declaring total income of Rs.7,20,34,630/-. Since the assessee failed to e-verify the ITR filed on 06.08.2021 within the stipulated time, the Assessing Officer treated the return filed by the assessee on 06.08.2021 as invalid. During the course of assessment proceedings the Assessing Officer asked the assessee to furnish various details. After considering the submissions made by the assessee from time to time, the Assessing Officer completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act determining the total income at Rs.12,94,86,977/- by making various additions.
Since the assessee did not respond to any of the 4 notices issued by the office of the Ld. CIT(A) / NFAC, the Ld. CIT(A) / NFAC, following the decision of Hon’ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee and others reported in (1979) 10 CTR 354 (SC), proceeded to decide the appeal on the basis of material available on record and sustained the addition made by the Assessing Officer.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: On facts and in law, 1] The assessee requests for condonation of delay in filing the appeal since there is a reasonable cause on its part in not filing the appeal within the prescribed time limit as per enclosed copy of affidavit. 2] The assessee submits that the notice issued u/s 148 is bad in law since the approval obtained by the learned A.O. is not in accordance with the provisions of section 151 and accordingly, the reasst. order passed u/s 147 is bad in law and the same may be declared null and void. 3] The assessee submits that the reopening u/s 148 is based on reason to suspect and not reason to believe and therefore, the reopening u/s 148 is incorrect and the reasst. order passed u/s 147 be declared null and void. 4] The learned CIT(A) erred in confirming the addition of Rs.25,63,000/-made u/s 50C of the Act without appreciating that the addition was not warranted on the facts of the case. 5] The learned CIT(A) erred in confirming the disallowance of expenditure of Rs.5,48,89,347/- claimed by the assessee while computing the income under the head ‘capital gain' on sale of property. 6] The learned CIT(A) failed to appreciate that the claim of expenditure of Rs.5,48,89,347/- made by the assessee was justified and hence, there was no reason to make the disallowance of the said expenses while computing the income of the assessee. 7] The appellant craves leave to add, alter, amend or delete any of the above ground of appeal.
6. The assessee has also raised an additional ground challenging the validity of re-assessment proceedings which reads as under:
1] The assessee submits that the reopening u/s 148 is invalid in law since it is not in accordance with the provisions of section 148 and accordingly, the reasst. order passed u/s 147 be declared null and void.
The Ld. Counsel for the assessee referring to the above additional ground submitted that the additional ground raised is purely legal in nature which goes to the root of the matter and all the necessary facts are already available on record. Referring to the decision of Hon’ble Supreme Court in the case of the National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) and in the case of Jute Corporation Of India Ltd vs Commissioner Of Income Tax And Anr (1991) 187 ITR 688 (SC) submitted that the additional ground raised by the assessee should be admitted.
The Ld. DR on the other hand strongly objected to the admission of the additional ground raised by the assessee.
After hearing both the sides and considering the fact that the additional ground raised by the assessee is purely legal in nature and all the material facts are already available on record and no new facts are required to be investigated, therefore, in view of the decision of Hon’ble Supreme Court in the case of the National Thermal Power Co. Ltd. v. CIT (supra) and in the case of Jute Corporation Of India Ltd vs Commissioner Of Income Tax And Anr (supra), the additional ground raised by the assessee is admitted for adjudication.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case, in response to notice u/s 148 of the Act, filed its return of income on 06.08.2021 declaring total income of Rs.7,20,34,630/-. However, due to failure of the assessee to e-verify the return filed on 06.08.2021 within the stipulated time the Assessing Officer treated the return as an invalid return and completed the assessment determining the total income at Rs.12,94,86,977/-. We find due to non-submission of any details before the Ld. CIT(A) / NFAC despite 4 opportunities granted, the Ld. CIT(A) / NFAC decided the appeal on the basis of material available on record and sustained the various additions made by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to prove that the re-assessment proceedings are invalid and the additions are also not sustainable on merit. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to submit the requisite details before the Assessing Officer on the appointed date without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 19th January, 2026.
Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 19th January, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 08.01.2026 Sr. PS/PS 2 Draft placed before author 12.01.2026 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Office 9 Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order