PAWAN STHAPAK,JABALPUR vs. ACIT CENTRAL CIRCLE,, JABALPUR

ITA 104/JAB/2025Status: DisposedITAT Jabalpur28 August 2025AY 2016-178 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the assessee's primary contention was that the CIT(A) passed ex-parte orders without affording proper opportunities, violating principles of natural justice. The assessee argued for a remittance to the Assessing Authority. The revenue contended that opportunities were given and the assessee's negligence should not be condoned. The Tribunal, after hearing rival submissions and perusing the material, found that the facts in both appeals (ITA Nos. 104/JAB/2025 and 105/JAB/2025) were identical. The Tribunal deemed it expedient to set aside the impugned orders for the same reasoning as applied in the lead case (ITA No. 104/JAB/2025). The Tribunal allowed all grounds of appeal for statistical purposes. The operative direction was to set aside the impugned order and allow the appeals for statistical purposes, implying a re-adjudication or further consideration.

What were the facts?

The assessee, Pawan Sthapak, filed appeals against the orders of the Commissioner Income Tax (Appeals) - Raipur-3 (CIT(A)) for Assessment Years 2016-17 and 2017-18. The appeals were consolidated and heard together. The assessee's primary contention was that the CIT(A) passed ex-parte orders without proper appreciation of facts and without giving effective opportunities. The dispute involved additions made by the Assessing Officer (AO) under Section 69B of the Income Tax Act, 1961, concerning unaccounted investment in a hospital building. The AO had referred the valuation to the District Valuation Officer (DVO), who estimated the cost of investment higher than what was declared by the assessee, leading to the impugned additions. The assessee argued that the transfer of jurisdiction to the CIT(A), Raipur, was without proper intimation and that the CIT(A) dismissed the appeals mechanically due to pending disposals.

What were the issues?

1. Whether the CIT(A), Raipur-3, had the jurisdiction to pass orders when the assessee had filed appeals before the CIT(A), Bhopal-3, under which the assessee's jurisdiction lies, and if the case was transferred, whether it was done without affording an opportunity to the assessee, making the order void? 2. Whether the CIT(A) erred in dismissing the appeal without considering that the case transfer was without intimation under Section 129, and whether the dismissal was mechanical due to pending disposals, showing a lack of application of mind? 3. Whether the AO erred in issuing a notice under Section 148 dated 30.06.2021 under the old provisions, which were substituted w.e.f. 01.04.2021, rendering the notice and proceedings void? 4. Whether the notice under Section 148 was issued without jurisdiction as approval was taken from an incompetent authority, and whether approval should have been taken as per Section 151 after the amendment, making the proceedings void? 5. Whether the CIT(A) erred in confirming the addition under Section 69B without the AO recording his own satisfaction, and whether the addition was based solely on the DVO's report, which is an estimation? 6. Whether the CIT(A) erred in confirming the addition of Rs. 99,02,248 (for AY 2016-17) or Rs. 1,87,70,395 (for AY 2017-18) by relying on the DVO's report, which used rates applicable to big/metro cities, whereas the property is situated in a village near Jabalpur with lower construction costs? 7. Whether the AO erred in not considering the report of a Chief Commissioner of Income Tax approved valuer while framing the assessment order? 8. Whether the CIT(A) erred in confirming the addition under Section 69B without rejecting the assessee's books of accounts or bringing any material to show investment exceeding recorded amounts? 9. Whether the reference to the DVO was made before issuing notice under Section 142(1) and without complying with Section 142A, which requires the AO to record reasons for believing the value is undervalued, making the reference bad in law? 10. Whether the addition was confirmed by simply relying on the DVO's report despite the assessee's objections regarding high construction rates compared to government guidelines, similar locations, and market rates? 11. Whether the CIT(A) erred in applying Section 115BBE when Section 69B is not applicable due to lack of evidence of higher construction rates and does not apply to deemed additions or presumptions? Assessee's Contention: The CIT(A) passed ex-parte orders without proper appreciation of facts and without giving effective opportunities. The matter should be remitted to the Assessing Authority. The transfer of jurisdiction was without proper intimation and opportunity. The AO erred in issuing notice under Section 148 under old provisions and without proper approval. The addition under Section 69B was made without AO's satisfaction and relied on DVO's report which used inappropriate rates and was made without complying with Section 142A. The books of accounts were not rejected. Section 115BBE was wrongly applied. Revenue's Contention: Multiple opportunities were given to the assessee. The CIT(A) was justified in passing an ex-parte order due to the assessee's negligence. The assessee should not take advantage of its negligence.

Which sections of the Income-tax Act were involved?

Section 69B,Section 148,Section 151,Section 142A,Section 142(1),Section 115BBE,Section 129

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH “DB”, JABALPUR

Before: SHRI KUL BHARAT & SHRI, NIKHIL CHOUDHARY

For Appellant: Shri Sapan Usrethe, Adv, Ms Apoorva Agrawal, CA
For Respondent: Shri Alok Bhura, Sr. CIT(DR)

PER KUL BHARAT, VICE PRESIDENT.:

These two appeals, filed by the assessee, against the order of learned Commissioner Income Tax (Appeals), Raipur-3 [hereinafter referred as the “Ld.CIT(A)”] dated 10.02.2025, pertaining to the assessment year 2016-17 & 2017-18 respectively. For the sake of convenience, both the appeals were heard together and are being disposed off by this consolidated order. First, we will take up the appeal of assessee in ITA. No. 104/JAB/2025, pertaining to the A.Y. 2016-17 which is taken as a lead case. The assessee has raised following grounds of appeal:-

“1. The learne

The order continues below.

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