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Facts
The assessee sold four immovable properties, claiming a cost of acquisition of Rs. 7,85,000, of which Rs. 4,22,769 was allowed and the balance Rs. 3,62,231 was disallowed. The indexed cost of improvement of Rs. 16,53,975 was also disallowed entirely by the Assessing Officer. The assessee appealed to the CIT(A), who dismissed the appeal ex-parte due to non-appearance, despite several opportunities.
Held
The Tribunal noted that the assessee came from an agricultural background with limited knowledge of tax laws and had requested another opportunity to present their case before the CIT(A). Considering this, the Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication.
Key Issues
Whether the reassessment proceedings were validly initiated and whether the disallowances made by the AO and the ex-parte order by the CIT(A) were justified.
Sections Cited
147, 143(3), 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Date of Hearing 15.07.2025 Date of Pronouncement 15.07.2025 ORDER, PER BRAJESH KUMAR SINGH, AM, This appeal filed by the assessee is directed against an order dated 17.03.2025 of the National Faceless Appeal Centre, Delhi/Ld. CIT(A), relating to Assessment Year 2012-13 arising out of order u/s 147 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to ‘the Act’) dated 31.05.2019. The assessee has filed an adjournment petition, which was rejected and the appeal is being decided after hearing both the parties and on the basis of materials available on record.
The grounds of appeal raised by the assessee are as under:-
1. That the learned Assessing Officer has erred in law and on facts to initiate the proceedings u/s 147 r.w.s 143(3) treating the entire sale consideration as the income of the appellant without getting any efforts to verify the information or extracting the income which is factually incorrect.
2. That the learned Assessing Officer has erred in law and on fact in initiating the reassessment proceedings under section 147 read with section 143(3) of the Income-tax Act, 1961, based on a preset mind, without any independent application of mind or without extraction of the taxable income.
3. That the learned Commissioner of Income-tax (NFAC) has erred in law and on facts to uphold the impugned order passed by the learned Assessing Officer even when the assessing officer acted on borrowed satisfaction after relying on the mechanical information without verifying the same.
That the Ld. Commissioner of Income Tax (Appeals), NFAC erred in law and on facts to pass ex-parte order, without giving sufficient opportunity to the appellant.
5. That the learned authorities have erred in law and on facts in treating the land in question as a capital asset, without considering it being rural agricultural land.
6. That the learned Commissioner of Income-tax (NFAC) has erred in law and on facts to uphold the impugned order passed by the learned Assessing Officer without considering that the appellant comes from an agricultural background and lacks adequate knowledge of legal and tax requirements.
7. That the learned Commissioner of Income-tax (NFAC) has erred in law and on facts to complete the proceedings without adhering the principle of natural justice.
8. That the learned authorities have erred in law and on facts in making impugned addition without giving the benefit of indexed cost of acquisition of Rs. 3,62,231 as claimed by the appellant.
9. That the learned Commissioner of Income-tax (NFAC) has erred in law and on facts in disallowing the claim of cost of improvement, without considering the fact that the expenditure was duly incurred by the appellant and had also been accepted by the learned Assessing Officer, hence such disallowance is unjust and unsustainable.
That the learned Authorities has erred in law and on facts to affirm the impugned addition merely based on presumption, assumption and surmises basis.
That the learned Authorities has erred in law and on facts in wrongly charging interest u/s 234A, 234B and 234C.
That the order is bad in law and against the facts of the case.
That any other relief or reliefs deemed fit in the facts and circumstances of the case may be granted.”
Brief facts of the case:-The assessment in this case was completed u/s 147 r.w.s.
143(3) of the Act on 31.05.2019. As per the facts noted in para-5 of the assessment order, the assessee had sold four immovable properties and claimed cost of acquisition of Rs.7,85,000/- . Out of the same, the Assessing Officer allowed a sum of Rs.4,22,769/- and disallowed the balance amount of Rs.3,62,231/-. Further, the assessee had claimed indexed cost of improvement of Rs.16,53,975//-, which was disallowed in entirety by the AO.
4. Against the above order, the assessee filed an appeal before the ld. CIT(A). The Ld. CIT(A) vide its order dated 17.03.2025, dismissed the appeal of the assessee ex-parte as the assessee did not appear before the Ld. CIT(A) despite several opportunities given as per details noted in para 4.1 of the Ld. CIT(A)’s order. Further, in dismissing the appeal, the ld. CIT(A) also dismissed the matter on merits and stated that in absence of any additional evidence or details to substantiate his claim, the appeal of the assessee could not be allowed.
Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us.
In the appellate proceedings before us, the Ld. AR submitted that the assessee comes from an agricultural background and lacks adequate knowledge of legal and tax requirements and was ready to explain the facts before the ld. CIT(A) if another opportunity was given to the assessee.
The ld. DR relied upon the orders of the authorities below
We have heard both the parties and perused the material available on record. Considering the background of the assessee and his request for allowing one more opportunity to submit his facts before the Ld. CIT(A), we deem it fit to set-aside the order of the Ld. CIT(A) and restore the matter to his file for fresh adjudication on this issue as per law after giving reasonable opportunity of being heard to the assessee. Further, the assessee is also directed to appear before the Ld. CIT(A) during the course of hearing.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 15th July, 2025.