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Facts
The assessee filed a return of income declaring Rs. 1,75,380 and claiming a refund. Information revealed that the assessee received compensation of Rs. 24,79,657 for land acquisition and Rs. 14,25,633 for delayed payment. These amounts were not fully disclosed, leading to reassessment proceedings under section 147 of the Income Tax Act, 1961.
Held
The Tribunal observed that the impugned order of the CIT(A) was an ex-parte order and the assessee's replies were not considered. The assessee had sought time to produce documents and filed an RTI application. The Tribunal, considering these facts, set aside the impugned order and remanded the case back to the Assessing Officer for a de novo assessment.
Key Issues
Whether the CIT(A) order was justified given the ex-parte nature and non-consideration of assessee's replies? Whether the reassessment proceedings were conducted properly?
Sections Cited
253, 147, 144/144B, 246A, 148, 142(1), 45, 56, 57(iv), 53(2)(viii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
आदेश/ O R D E R
Per Paresh M Joshi, J.M.:
1. 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
Page 1 of 13 A.Y.2018-19 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.
Factual Matrix 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:-
“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
1. 13.03.2024 20.03.2024 No response
2. 21.02.2025 27.02.2025 No response
3. 03.03.2025 10.03.2025 No response
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.
6. The issues were considered. Relevant assessment order,
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.
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 Page 4 of 13
1. The final assessed income was determined at Rs.33,67,853, including:
Addition under Section 45 (Capital Gains on Compulsory Acquisition) -Rs 24,79,657
2.Addition under Section 56 (Interest Income on Compensation) Rs.7,12,816
3. Income originally declared by the appellant-Rs. 1,75,380
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 Page 5 of 13
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.
7. The appellant craves leave to add, alter, amend and/or 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.
In the result, the appeal is Dismissed.”
Page 6 of 13 A.Y.2018-19 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.
2. On the facts and circumstances of the case and in law,
the Ld. NFAC erred in upholding the addition of Rs.
7,12,817/- under section 56, made to the income of the appellant.
3. On the facts and circumstances of the case and in law,
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.
4. On the facts and circumstances of the case and in law,
the reassessment order dated 03.03.2023 is bad in law, without jurisdiction, and liable to be quashed.
On the facts and circumstances of the case and in law,
the reassessment was completed without complying with the statutory requirements of law.
On the facts and circumstances of the case and in law,
the notice under section 148 dated 24.03.2022 is void and illegal hence liable to quashed.
For that the appellant craves leave to add, amend, alter
vary and OR withdraw any OR all the above grounds of appeal.
8. For that the appellant craves leave to add, amend, alter vary and OR withdraw any OR all the above grounds of appeal.”
Record of Hearing 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
Page 8 of 13 A.Y.2018-19 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.
Page 9 of 13 A.Y.2018-19 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 Page 10 of 13 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.
Observations Findings & conclusions 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
Page 12 of 13 A.Y.2018-19 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.