Loading judgment…
Facts
Anand Kumar Bansal, the legal heir of Shri Vishnu Prasad Agrawal, filed an appeal against the Pr. CIT's order under Section 263 of the Income Tax Act, 1961, for the Assessment Year 2013-14. The Pr. CIT had set aside an assessment order, concluding it was erroneous and prejudicial to the revenue because the Assessing Officer (AO) had failed to inquire into the escapement of Short Term Capital Gain (STCG) amounting to Rs.7,54,202/- and the consequent under-levy of tax and interest. The appeal was filed with a delay of 299 days, for which a condonation petition was submitted.
Held
The Tribunal condoned the 299-day delay in filing the appeal, noting the lack of a counter-affidavit from the Revenue. However, despite multiple opportunities, the assessee largely failed to appear or represent their case on merits before the Tribunal. After reviewing the facts and legal precedents, the Tribunal upheld the Pr. CIT's order under Section 263, confirming that the AO's original assessment was erroneous and prejudicial to the revenue due to the lack of proper inquiry into significant escapement of income.
Key Issues
1. Whether there was sufficient cause to condone the 299-day delay in filing the appeal. 2. Whether the Pr. CIT's order under Section 263, setting aside the assessment for lack of AO inquiry into escapement of STCG and under-levy of tax and interest, was justified.
Sections Cited
Section 263, Section 147, Section 148, Section 144B, Section 142(1), Section 143(2), Section 50C, Section 139, Section 271F, Section 234A, Section 234B, Section 5 of the Limitation Act, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI ARUN KHODPIA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax, Raipur-1 (for short ‘Pr. CIT”) passed u/s.263 of the Income Tax Act, 1961 (for short ‘the Act’) dated 27.03.2024 for the assessment year 2013-14 as per the grounds of appeal on record.
At the very outset, it is noted that the present appeal is time barred by 299 days and in this regard, the assessee had filed condonation petition a/w. affidavit which is extracted as follows:
3. At the same time, the Revenue has not filed any counter affidavit challenging the said delay condonation petition. That going through the contents of the condonation petition a/w. affidavit filed by the assessee and as per parameters enshrined in the decisions viz. (i) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025; (ii) Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025 and (iii) Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025, we are inclined to condone the delay of 299 days. We order accordingly.
4. At the time of hearing, when the matter was call up for hearing, none appeared on behalf of the assessee. The hearing of the present case had started since 24th April, 2025 and as per the order sheet entries and in the entire span of time, the matter was posted for hearing on 24.04.2025, 17.06.2025, 25.06.2025, 15.07.2025, 01.08.2025, 19.08.2025, 03.09.2025, 17.09.2025, 25.09.2025, 03.10.2025, 23.10.2025, 30.10.2025 and finally today i.e. 12.11.2025, the matter is heard. In all these occasions, only twice there has been representation from the assessee i.e. on 25.06.2025 and on 01.08.2025, however, in all other dates of hearing, adjournment application had been filed by the assessee. Even when the matter was called for hearing today, there was none present from the assessee. That from record, it is amply clear that several opportunities have already been provided to the assessee which the assessee had not availed off and as per direction of the Hon’ble Apex Court in the case of Ishwarlal Mali Rathod Vs. Gopal and Ors., passed in Special Leave Petition (Civil) Nos. 14117-14118 of 2021, order dated 20.09.2021, wherein it has been held and observed that as on today the judiciary and the justice delivery system is facing acute problem of delay which ultimately affects the rights of the litigant to access to justice and speedy trial. It cannot be disputed that due to delay in access to justice and not getting timely justice it may shake the trust and confidence of the litigants in the justice delivery system. Therefore, the Hon'ble Apex Court has directed specifically that adjournments should not be granted in a routine manner and mechanically and such grant of adjournment by the Courts should not be a cause for delay in dispensing justice. The assessee cannot be allowed to take undue advantage of the legal process for deliberately delaying the process of law. In this case, the assessee deliberately did not represent his matter on merits from day one itself. There has been no efforts so to say that the assessee was conscious about the proceedings going on before the Tribunal. That any further adjournment would be against the directives of the Hon’ble Apex Court (supra.). The trust of the litigants in the judicial process needs to be upheld and thereby, considering the entire facts and circumstances, the submission of the Ld. CIT-DR are recorded and after careful consideration of the materials/documents available on record, the matter is heard.
In this case, assessment has been completed by the A.O u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 (for short ‘the Act’), dated 28.03.2022 and it would be pertinent to extract the assessment order for the sake of completeness:
Thereafter, the Ld. Pr. CIT had passed order u/s.263 of the Act dated, 27.03.2024 as per the following reasons:
“Order under section 263 of the Income Tax Act, 1961 The case was reopened u/s.147/148 of the Act for A.Y. 2013- 14 in the name of the legal heir of Shri Vishnu Prasad Agrawal. The assessment order was passed on 28.03.2022 u/s 147 read with section 144B of the Income Tax Act, 1961 and the total income of the assessee was assessed at Rs.292160/-as against the return income of Rs.292160/- filed on 23.12.2021 against the notice issued u/s.148 of the Act. "2. Perusal of reason recorded and other available documents reveal that deceased Shri Vishnu Prasad Agrawal expired on 12.03.2019. Erstwhile JAO has issued notice u/s 148 on 25.03.2019. When the facts came into his notice the proceedings so initiated was dropped with remarks the same would be initiated separately in the case of the legal heir of the assessee Shri Anand Kumar Bansal. Accordingly, notice u/s 148 of the 'Act' was issued on 31.03.2021. It was found that the deceased Shri Vishnu Prasad Agrwal has sold two immovable properties having value for the purpose of Sec.50C of Rs.31,91,000/- and Rs.298400/- respectively on 13.07.2012. The aforesaid properties were acquired by him on 13.12.2011 at the consideration of Rs.23,88,000/- and Rs.1,00,000/- respectively. As the transfer happens within the one year period from the date of purchase the Short Term Capital Gain to the tune of Rs.754202 (31,91,000- 2616345+298400-118853) arrives which has been escaped from assessment in the hands of the deceased Shri Vishun Prasad Agrawal. But perusal of the record reveals that instead of taking the income from STCG the deceased has considered it as business income of Rs.178902/-. Hence, the case was reopened u/s.148 in the case on the legal heir of the deceased Shri Anad Kumar Bansal as the STCG to the extent of Rs.754202/- has been escaped from assessment in his hand. However, it was found that during the course of assessment proceedings Shri Anand Kumar Bansal has filed his Return as an individual capacity rather than on the capacity of legal heir of the deceased Shri Vishnu Agrawal. Further, above issue vis-à-vis issue flagged in the reason recorded u/s 148(2) has not been examined properly and verbatim of the assessee has accepted without going through the material available on record and facts of the case. The omission of the above fact has led to escapement of income Rs.754202/- which tantamount to under levy of tax of RS,226529/- and interest u/s 234A and 234B of Rs.27183/- and Rs.244651/- respectively causing thereby under levy of aggregate tax and interest of Rs.271835/- in the hands of the legal heir of the legal of the deceased Shri Vishnu Prasad Agrawal for the A.Y. 2013-14. Further, NeFAC on various dates has prescribed that the cases of legal heir fall under the category of 144B(8) of the 'Act' . Thus assessment in such has to be made by the concerned jurisdictional Assessing Officer rather than the FAO. The above issue may please be looked into."
Upon perusal, it is found that the AO has not covered the above raised facts in the impugned Assessment Order for the A.Y. 2013-14 in the case of the assessee and the omission of the above fact has led to escapement of income of Rs.754202/- which tantamount to under levy of tax of R.226529/- and interest u/s 234A and 234B of Rs.27183/- and Rs.244651/- respectively causing thereby under levy of aggregate tax and interest of Rs.271835/- in the hands of the legal heir of the deceased Shri Vishnu Prasad Agrawal for the A.Y. 2013-14. Failure to the same has resulted under assessment of income of Rs.754202/- causing thereby under levy of tax of Rs.226529/- and interest u/s 234A and 234B of Rs.27183/- and Rs.244651/- respectively causing thereby under levy of aggregate tax and interest of Rs.271835/- .
Considering the facts narrated in the foregoing paras which have emanated from the case record, I am of the considered view that the order passed u/s 147 r.w.s 144B of the Income tax Act, 1961 vide order dated 28.03.2022 is erroneous and prejudicial to the interest of revenue and therefore, needs to be revised under the provisions of section u/s 263 of then IT Act, 1961.”
That a show cause notice u/s. 263 of the Act, dated 21.03.2024 was issued to the assessee asking to furnish his reply. However, there was no compliance made by the assessee or on behalf of the assessee. Left with no other option further, the Pr. CIT proceeded with the materials available on record and as per detailed order, held the assessment to be erroneous in so far it is prejudicial to the interest of the revenue.
That on perusal of the order of the Pr. CIT u/s. 263 of the Act, it is discernable that the revenue is aggrieved on two counts. Viz. (i) the omission of the A.O to consider relevant facts regarding the assessee which has been brought out in the order passed u/s.263 of the Act by the Pr. CIT which led to escapement of income of Rs.7,54,202/- and (ii) resultant under levy of tax of Rs.2,26,529/- and consequential interest u/s. 234A & 234B of the Act of Rs.27,183/- and Rs.2,44,651/- respectively causing thereby under levy of aggregate tax and interest of Rs.2,71,835/-. In these two areas, we find that there is no discussion by the A.O in the assessment order nor any enquiry has been conducted. That going through the assessment order, it is absolutely clear that such assessment has been done in a summary manner accepting the return income as well as the reply of the assessee. That on plain reading of Section 263 of the Act a/w. Explanation-2 of the said provision of the Act, since the assessment order has been passed without making inquiries or verification and the order is passed allowing relief without inquiring into the claim and also considering the deeming nature in Explanation-2, the assessment order, therefore, is erroneous in so far it is prejudicial to the interest of the revenue. That clearly the facts were not considered by the A.O as brought on record by the Pr. CIT in his order observing the assessment order therefore to be erroneous so as to be prejudicial to the interest of the revenue.
In the cases of Rampyari Devi Saraogi Vs. Commissioner of 8. Income-Tax, West Bengal, Calcutta, 67 ITR 84 (SC) and Smt. Tara Devi Aggarwal v. Commissioner of Income tax, West Bengal, 88 ITR 323 (SC), the Hon’ble Supreme Court upheld the Commissioners (CIT)’s revisional orders passed u/s. 263 of the Act where the A.O accepted the returned income without making any proper inquiry. The Hon’ble Apex Court held that the assessment order passed without any enquiry results in loss of revenue and makes the order erroneous and prejudicial to the interest of the revenue. In the case of Pr. CIT Vs. Paville Projects Pvt. Ltd. (2023) 453 ITR 447 (SC), the Hon’ble Supreme Court set-aside the High Court judgment and restored the order of the Commissioner of Income Tax u/s. 263 of the Act. The Hon’ble Apex Court found that the A.O’s original assessment order accepting the substantial deduction as “cost of improvement” without proper application of the relevant legal provision was both erroneous and prejudicial to the interest of the revenue. In the aforesaid judgment, on perusal of the assessment order and relying on the judgment passed in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC), it was held by the Hon’ble Apex Court that the order passed by the A.O was erroneous as well as prejudicial to the interest of the revenue and thus, the Hon’ble High Court had committed a very serious error in setting aside the order passed by the Commissioner of Income Tax u/s.263 of the Act. With the above observations, the Hon’ble Apex Court allowed the appeal and set-aside the impugned order passed by the Hon’ble High Court restoring the order passed by the Commissioner of Income Tax in exercise of powers u/s. 263 of the Act.
Reverting to the facts of the present case, the Pr. CIT in the order passed u/s. 263 of the Act has clearly made a case that there has been under assessment in the case of the assessee and subsequent under levy of tax a/w. applicable interest. However, these areas have neither been enquired into nor verified by the A.O during the assessment proceedings and the entire assessment order is silent on these aspects.
Considering the aforesaid examination of the facts on record as well as legal spectrum enshrined in the tax law jurisprudence as emanated from the aforesaid judicial pronouncements, we are of the considered view that the Pr. CIT is correct in passing order u/s.263 of the Act holding the assessment order to be erroneous in so far it is prejudicial to the interest of the revenue. The order passed by the Pr. CIT u/s.263 of the Act is upheld.
In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 13th November, 2025.