SITARAM MUCHHALA,MARDANA vs. ITO KHARGONE, KHARGONE

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,[ herein after referred to as the Act for the

sake of brevity] before this Tribunal as & by way of second

appeal. The Assessee is aggrieved by the order bearing Number:-

ITBA/NFAC/S/250/2024-25/1074463840(1) dated 13.03.2025

passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after

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referred to as the “Impugned order”. The relevant assessment

year is 2018-19 and the corresponding previous year period is

from 01.04.2017 to 31.03.2018.

2.1 That as and by way of an “ Assessment order” made u/s 147

r.w.s. 144/144B of the Act, the total income of the assessee

was computed & assessed at Rs. 31,92,474/-. Variation in

respect of addition u/s 45 was at Rs. 24,79,657/- & variation in

respect of addition u/s 56 was at Rs. 7,12,817/-. That the

aforesaid “Assessment order” bears No. ITBA/AST/S/147/2022-

23/1050379287(1) & that the same is dated 03.03.2023 which is

herein after referred to as the “Impugned Assessment Order”.

2.2 That the assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal u/s

246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the 1st appeal of the Assessee on the

grounds & reasons specified therein. The core grounds & reasons for the dismissal of the 1st appeal was as under:-

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“5.1 During the course of appeal proceedings, the appeal

was posted giving an opportunity for making written

submission on various dates, the details of which are as

follows:

S.No. Date of Notice Date of Hearing Remarks

5.2 There was no response from the appellant to the above

notices of hearing and also no application for adjournment

or written submissions were submitted till the date of

disposal of this appeal. Hence, it has been decided to

discuss the subject matter of appeal on the material

available on record.

statement of facts and grounds of appeal were carefully

perused so as to decide the subject matter of appeal on the

material available on record.

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6.1 The assessment order pertains to the appellant, who

filed a return of income for AY 2018-19 on 22.05.2018,

declaring a total income of Rs.1,75,380 and claiming a

refund of Rs.3,90,530. Based on information received from

the Land Acquisition Officer, Maheshwar Hydro Electric

Project, it was found that the appellant received

compensation of Rs.24,79,657 for the compulsory

acquisition of land and interest of Rs. 14,25,633 for

delayed payment of compensation. However, these

amounts were not fully disclosed in the return, leading to

the issuance of a notice under Section 148, followed by

multiple notices under Section 142(1), none of which were

responded to by the appellant

6.2 A show-cause notice was issued proposing an addition

of Rs.24,79,657 under Section 45, treating it as long-term

capital gain, and Rs.7,12,816 under Section 56 as taxable

interest income, after allowing a 50% deduction under

Section 57(iv). As the appellant failed to furnish any

supporting documents, the assessing officer computed the

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capital gains with the cost of acquisition and Improvement

taken as nil and added Rs.24,79,657 to total income

under Section 45.

Rs.33,67,853, including:

2.Addition under Section 56 (Interest Income on Compensation) Rs.7,12,816

6.4 After due consideration of all the facts available on

record, the additions of Rs 31,92,473 are upheld as the

appellant has failed to explain the nature and source of

the credits and hence did not discharge the burden casted

upon him. The appellant's grounds are found to be

untenable due to the fact that specific findings in the

assessment order have not been controverted by the

appellant along with corroborative evidences. The

arguments advanced by the appellant in his statement of

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facts and grounds of appeal are also not supported by

tangible materials.

6.5 The appellant's contentions are not acceptable in the

absence of written submission to substantiate its

contentions made in the grounds of appeal and non-

submission of any material in the course of the appellate

proceedings to controvert the findings in the assessment

order by the AO to arrive at his decision on the issues.

6.6 Based on the facts mentioned above, and detailed

discussion in the assessment order by the AO, I am not

inclined to interfere with the decision of the AO on the

issues raised in the grounds of appeal.

delete all or any of the foregoing grounds of appeal.

However, No such option was exercised by the appellant

during appellate proceedings. Hence, this ground of appeal

is considered dismissed for statistical purposes.

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2.3 That the assessee being aggrieved by the “Impugned Order”

has preferred the instant second appeal before this Tribunal &

has raised the following grounds of appeal in the Form No. 36

against the “Impugned Order” which are as under:-

“1. On the facts and circumstances of the case and in law,

the Ld. NFAC erred in upholding the addition of Rs.

24,79,657/-under section 45, made to the income of

the appellant.

the Ld. NFAC erred in upholding the addition of Rs.

7,12,817/- under section 56, made to the income of the

appellant.

the NFAC Order dated 13.03.2025 is contrary to law,

facts and circumstances of the case and in any case is

opposed to the principles of equity, natural justice and

fair play.

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the reassessment order dated 03.03.2023 is bad in

law, without jurisdiction, and liable to be quashed.

the reassessment was completed without complying with

the statutory requirements of law.

the notice under section 148 dated 24.03.2022 is void

and illegal hence liable to quashed.

vary and OR withdraw any OR all the above grounds of

appeal.

vary and OR withdraw any OR all the above grounds of

appeal.”

3.1 The hearing in the matter took place before this Tribunal on

18.02.2026 when the Ld. AR for & on behalf of the Assessee

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appeared before us & inter alia contended that the “Impugned

Order” is bad in law, illegal & not Proper. It is passed in the

violation of the principles of natural justice. It therefore deserves

to be set aside. The Ld. AR then contended that the registry of

this Tribunal has pointed out the delay of 60 days in presenting

the instant second appeal & in this regard, it was submitted that

an application for the condonation of delay is placed on record of

this Tribunal with a prayer that the delay be condoned. It was

submitted that the “Impugned Order” is dated 13.03.2025

whereas the instant second appeal is filed on 30.07.2025

resulting in the delay. It was submitted that the assessee was

not aware of the “Impugned Order” dated 13.03.2025. The

assessee came to know of the passing of the “Impugned Order”

in the month of July, 2025 when the Income Tax Dept. made a

case for recovery of the tax amount. Immediately thereafter the

instant second appeal was filed. The delay in filling occurred due

to unawareness about passing of the “Impugned Order”. The

delay was neither intentional nor due to any negligence or mala

fide intention. Prima facie the assessee has a arguable case on

merit. A prayer was made for condonation of delay. Per Contra Ld.

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DR appearing for the revenue contended that in so far as

condonation of delay aspect is concerned, he leaves the issue to

the wisdom of this Tribunal. After hearing & perusing the

application for condonation of delay, we are of the considered

opinion that the delay should be condoned as sufficient cause is

shown as discussed & recorded above. Accordingly, the delay is

condoned. Appeal is admitted & taken up for hearing.

3.2 The Ld. AR then submitted that the assessee is not much

aware of the tax laws & proceedings connected with it. The

assessee is villager. The “Impugned Order” of the Ld.CIT(A) is

an ex-parte order. The Ld. CIT(A) had fixed total three hearings

in the matter on 20.03.2024, 27.02.2025 & 10.03.2025. Our

attention was invited to the paper book page 44 wherein a reply

dt. 20.03.2024 was placed on record requesting for extension of

time by 12 weeks as an RTI application is /was submitted to the

Land Acquisition Officer seeking documents as same were of

important for first appellate proceedings. Our attention was then

invited to page 45 of the paper book which was a reply dated

27.02.2025 wherein a request was made to set aside the

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“Impugned Assessment Order” as the same was u/s 144 of the

Act & in view of amendment made by Finance Bill 2024 the Ld.

CIT(A) are now empowered to remand those assessment order

which are passed u/s 144 of the Act. It was therefore requested

that since the “Impugned Assessment Order” is u/s 144,

same should be set aside & matter should be remanded to Ld.AO.

It was also submitted basis page 47 of the PB that on 11.03.2025

a request was again made for remand of the case back to the file

of the Ld. AO basis earlier reply dt. 27.02.2025. The Ld. CIT (A)

however on 13.03.2025 passed impugned order ignoring

submissions (supra). The Ld AR also submitted that the assessee

is an agriculturist & village. Cost of acquisition benefit has not

given. Cost of improvement has been taken as NIL. 50% of the

amount has been allowed u/s 57(iv) as compensation is taxable

u/s 53(2)(viii). It was stated that issue of non-taxability of

amount would be made before the Ld. AO if one last chance is

given to the assessee. The Ld. DR for the revenue has left the

issue to the wisdom of the Bench in so far as revenue is

concerned. Hearing was concluded.

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4.1 We have to decide the legality, validity and proprietary of the

“impugned order” basis records of the case & the rival submission

canvassed before us.

4.2 We have carefully perused the records of the case and have heard

the submissions.

4.3 We basis records of the case & after hearing & upon

examining the rival contentions of the Ld. AR & the Ld. DR

canvassed before us, are of the considered view that the

“Impugned Order” of the Ld. CIT(A) is an ex-parte order &

replies of the assessee has not been considered. The assessee

wanted time to produce documents on land acquisition & for

which RTI application was filed before concerned authorities. The

“Impugned Assessment Order” is u/s 144 of the Act too. The

Ld. AR has undertaken on behalf of the assessee that all

necessary reply, submissions, evidence, material would be filed

before the AO if an opportunity is given as last chance. Under

these facts & circumstances, we set aside the “Impugned Order”

& remand the case back to the file of Ld. AO on denovo basis. We

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direct assessee to co-operate with the Dept. & to file all

necessary material details before Ld. AO so that the Ld. AO can

pass suitable speaking order basis merit of the case.

5 Order

5.1 In the premises drawn up by us, the impugned order is set aside

as & by way of remand back to the file of the Ld. AO on denovo basis.

5.2. In result, appeal of Assessee is allowed for statistical purpose.

Pronounced in open court on 27.02.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 27/02 /2026 SN

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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