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Facts
A tax evasion petition against the assessee's husband led to the discovery that the assessee and her husband jointly sold two immovable properties for ₹ 65.00 lacs and ₹ 53.20 lacs, respectively, without offering capital gains for taxation. The Assessing Officer consequently added ₹ 22,93,775/- as long-term capital gains under sections 143(3), 147, and 144B, which the CIT(A) partly upheld.
Held
The Income Tax Appellate Tribunal (ITAT) remanded the case back to the CIT(A) for a fresh decision. The ITAT observed that the assessee was not afforded an adequate opportunity to present her case and supporting evidence before the CIT(A), emphasizing the need to provide such an opportunity for a fair adjudication.
Key Issues
Validity of initiation and procedure of reassessment proceedings; correctness of long-term capital gains computation on property sales; leviability of interest under sections 234B and 234D; and denial of adequate opportunity of being heard by the CIT(A).
Sections Cited
143(3), 147, 144B, 148, 148A, 151, 151A, 234B, 234D, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI SONJOY SARMA & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri K.N. Prasad, AR. Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 04/09/2025 Date of pronouncement 12/11/2025 O R D E R PER: RATNESH NANDAN SAHAY, A.M.
This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. NFAC/2017-18/10238192 dated 07/11/2024 for the A.Y. 2018-19.
Shri K.N. Prasad, ld. A.R. represented on behalf of the assessee and Shri Khubchand T. Pandya, ld. Sr. DR represented on behalf of the revenue.
Brief facts of the case are that a tax evasion petition in this case was received in the Investigation Wing of the Income Tax Department against Shri Konda Prabhakar Rao (Husband of the assessee) that the assessee had entered into a transaction for the sale of immovable property situated at Flat No/ G/4, Sharda Apartment, Sakchi, Jamshedpur for a sale consideration of ₹ 65.00 lacs and another Flat No.L1 SA Ghosal Para Road, Manikpur, West Bengal for a sale consideration of ₹ 53.20 lacs but no capital gains was paid P a g e 1 | 4
ITA 04/Ran/2025 Konda Karabi Vs DCIT to the Income Tax Department. Accordingly, a statement on oath of Shri Konda Prabhakar Rao was recorded, in which, he admitted that the said flat was purchased in the joint name of Shri Konda Prabhakar Rao and his wife Konda Karabi (assessee). However, no capital gain was offered for taxation. Accordingly, the matter was investigated by the Investigation Wing and detailed information was sent to the Assessing Officer who added the capital gains of ₹ 22,93,775/- as a long term capital gain on the two properties under Section 143(3) read with section 147 and Section 144B of the Income Tax Act, 1961 (in short, the Act).
4. Aggrieved by the order of Assessing Officer, the assessee preferred appeal before the ld. CIT(A), who vide the impugned order, partly allowed the addition made by the Assessing Officer.
5. Further aggrieved by the order of ld. CIT(A), the present appeal has been filed by the assessee before this Tribunal. In the appeal before us, the assessee has raised many grounds of appeal
as under: "1. For that the grounds of appeal hereto are without prejudice to each other.
2. For that the learned CIT(A) vide his order dated 07.11.24 had dismissed the appeal filed by the assessee. The assessee has filed a time petition on date fixed but the learned CIT(A) has passed order on merit by wrongly observing that the assessee has filed written submission along with documentary evidences. The case of the assessee has not been considered by learned CIT(A) in proper perspective. In absence of any representation and due to impugned non-appreciation of the facts and material on record, the learned CIT(A) has passed an order on merit which is great injury to the assessee. The order passed by the learned CIT(A) is fit to be set-aside.
3. For that in the facts and circumstances of the case initiation of proceeding u/s 147 rws 144B is arbitrary, unjustified, void ab-initio and bad in law. Since the very initiation of proceeding u/s 147 is ab-initio void and as such the further proceeding initiated at is void and bad in law.
P a g e 2 | 4
ITA 04/Ran/2025 Konda Karabi Vs DCIT
For that the order u/s 147 rws 144B of the I. T. Act, 1961 as passed by department on 25.03.2023 is bad in law. The order as passed is void ab-initio, bad in law and fit to set aside.
For that the sanctioning authority has not applied his judicial mind before according sanction u/s 151. The approval has been granted for reopening of the assessment in a mechanical manner and without due application of mind by writing the word "Approved". The reassessment proceedings initiated by the AO is arbitrary, unjustified, bad in law and fit to be quashed.
For that it was mandatory for the authorities concerned to initiate proceedings pertaining to re-assessment under Section 148A and issue of the notice u/s 148 of the Act in a faceless manner, rather than being proceeded by the local jurisdictional Assessing Officer, as is envisaged under Section 144B as also under Section 151A of the Act. The notices and order so issued and the procedure adopted being per se illegal, bad in law and fit to be set aside/quashed.
For that in the facts and circumstances of the case, the learned CIT(A) has erred in confirming the capital gain on account of alleged sale of Flat No. G/04, Sharda Apartment, Sakchi, Jamshedpur as Long Term Capital Gain as calculated by the Assessing Officer amounting to Rs. 21,99,091/-. The capital gain as calculated by department and sustained by the learned CIT(A) is arbitrary, unjust, void ab-initio and bad in law. In the facts and circumstances of the case no capital gain is called for in the impugned financial year 2017-18 relevant to Assessment Year 2018-19. 8. For that from perusal of the order of the learned CIT(A), the capital gains as worked out by the Assessing Officer on account of sale of flat at Flat No. L1, 5A, Projects South Winds, Ghosal, Kolkata, there is an enhancement to the extent of Rs. 1,09,146/-. Before enhancement made, no notice of hearing has been given. No opportunity of being heard is allowed which is violation of principal of natural justice so far the enhancement of impugned capital gain is concerned. In any case no capital gain is assessable as computed by the department. The addition /enhancement made in this respect is fit to be deleted. 9. For that in the facts and circumstances of the case, the charge of interest u/s 234B at Rs. 2,83,500/- and u/s 234D at Rs. 37,072/- is arbitrary, unjust and bad in law. In view of jurisdictional high court, the interest u/s 234B is chargeable on income returned. The interest as charged is fit to be deleted. 10. For that the assessee reserves her right to file detailed submission at the time of hearing. 11. For that the appellant craves leave to urge, add or alter any other ground or grounds at the time of hearing." 6. During the course of hearing before us, the ld. Authorised Representative reiterated the same. We have considered the order of the learned. CIT(A) P a g e 3 | 4
ITA 04/Ran/2025 Konda Karabi Vs DCIT and it is found that he has mentioned in the impugned order in para 4 as under: "4. Written submission: In response to various notices issued u/s 250 of the Act, the appellant filed written submission alongwith documentary evidence in support of the ground raised
. The written submission and documentary evidence provided by the appellant have been carefully perused and considered." Accordingly, we find that since the assessee was not able to represent its case before the ld. CIT(A) by providing necessary documents/evidences in support of her claim, it is in the interest of justice, to send the matter back to the file of ld. CIT(A) to decide the issue afresh by providing adequate opportunity of being heard to the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical for statistical purposes.
7. In the result, the appeal of the assessee is allowed for statistical purposes only. Order announced in open court on 12/11/2025.