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Facts
The assessee filed an appeal against an ex-parte order from the CIT(A). The assessee contended that the assessment order was void ab initio due to non-service of notice under Section 148 and that the reasons recorded for reopening were invalid. The assessee also claimed to have already declared Long Term Capital Gain and paid tax.
Held
The tribunal noted that both the assessment and appellate orders were ex-parte. Given the procedural irregularities and the assessee's claims regarding notice and declaration of income, the tribunal is likely to remand the case for proper adjudication.
Key Issues
The key legal issues are the validity of the ex-parte assessment and appellate orders, proper service of notice under Section 148, and the adequacy of reasons recorded for reopening the assessment.
Sections Cited
Section 148, Section 250(6), Section 234A, Section 234B, Section 234C
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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN, ACCOUTANT MEMBER
The Assessee has filed this appeal against the order of ld CIT Commissioner of Income Tax (Appeals), letter dated 30th September 2025 Assessee has filed following grounds of appeal:-
BECAUSE, the order passed by the authorities below is erroneous both on facts and in law.
BECAUSE, while passing ex-parte order the ‘CIT(A); ought to have considered the merits of the case in the light of ground raised in the memo of appeal.
BECAUSE, even otherwise, an order appeal without effectively disposing of the grounds raised by the appellant is in infraction of section 250(6) of the Act and as such, order so made is otherwise too illegal, invalid and a vitiated order.
WITHOUT PREJUDICE TO THE ABOVE
BECAUSE, upon due consideration of facts and in the overall circumstances of the case ‘appellant’ denies its liability to be assessed in terms of Notice dated 30.03.2019 said to be issued under section 148 of the ‘Act’.
BECAUSE, No Notice under section 178 of the ‘Act’ was served upon the ‘appellant’ and ex-parte assessment was completed without serving any Notice under section 148 of the ‘Act’ render the Assessment Order void-ab-initio.
BECAUSE, the purported ‘Reasons’ as reproduced in the Assessment Order are No ‘Reasons’ in the eyes of Law. The so called ‘Reasons’ do not show any application of mind on part of the ‘AO’ to show that any Income liable for Tax has escaped Assessment warranting recourse to Notice under section 148 of the Act.
BECAUSE, the alleged escapement is based on incorrect assumption of fact that ‘appellant’ has not filed Return of Income and had not shown Long Term Capital Gain the Return of Income whereas due Return of Income was filed electronically and Income arising under the head Long Term Capital Gain amounting to Rs.9,02,439/- and due Tax of Rs. 1,80,488/- stood paid before filing Return of Income.
BECAUSE, upon due consideration of facts and in the overall circumstances of the case addition of Rs.36,00,000/- towards Long Term Capital Gain is wrong and illegal as the amount of Rs.36,00,000/ - represents deemed sale consideration and for arriving at ‘Long Term Capital Gain’ assessee is entitled to deduction of Rs.26,97,383/ - being the indexed cost of acquisition of the asset sold giving rise to Long Term Capital Gain.
BECAUSE, upon due consideration of facts and in the overall circumstances of the case addition of Rs. 36,00,000 /- towards Long Term Capital Gain is wrong and illegal s the assessee had duly shown Long Term Capital Gain of Rs.9,02,439 /- in Return of Income filed which was filed electronically. BECAUSE, in any case and in any view of the matter impugned addition and impugned assessment order is bad in law, illegal, unjustified, contrary to facts and law based upon incorrect assumption of facts and further without allowing adequate opportunity of hearing in violation of principals of natural justice and therefore, the additions made deserved to be quashed.
BECAUSE, the assessment order to the extent making addition is bad in law and against the fact of the case.
BECAUSE, assessee denies its liability against Interest charged under section 234A based on incorrect assumption of facts and Interest under section 234B and 234C is incorrectly charged.
The ‘appellant’ craves leave to add, alter or vary the grounds of appeal before or at the time of hearing.
2. At the time of hearing learned AR of the assessee submitted that the assessingofficer as well as the appellate order is ex parte. The case of the assessee was selected for scrutiny on the basis of information collected from the Registrar of stamp duty that the assessee has sold immovable property for sale consideration of Rs. 35 Lakhs whereas stamp duty under section 50C of the Income Tax Act 1961 (in short Act) amounting to Rs. 36 Lakhs, since, the assessee has not filed return of income and not disclosed the above sale transaction. The notice under section 133 (6) of the Act to ascertain the long term capital gains and other relevant details, the same was issued to the address available with the office. Since, there was no compliance from the assessee, notice under section 148 was issued and served on the assessee with prior approval.Still there was no response from the assessee, a show cause notice under section 144 was issued and assessment was also completed under section 144 of the Act. Since there was no response before ld CIT also the appeal preferred by the assessee was dismissed.
3. At the time of hearing ld (AR) submitted that no doubt the appeal was dismissed ex parte however assessee prefers to raise technical ground raised in the ground No 7 before ITAT since it is a jurisdictional issue he has requested to adjudicate this issue alone.
In this regard he brought to our notice page 6 of the paper book which is the return of the income filed by the asssessee for the year under consideration and the same is placed on record.Further, he brought to our notice page 7 of the paper book wherein assessee has filed the return of income on 31.07.2013 and he brought to our notice the computation as per stamp duty under section 50C of the Act i.e. 36 lakhs and duly declared the relevant capital gain which is placed at page 8 of the paper book. In this regard, further he brought to our notice page 76 and 77 of the paper book, which is the form for recording reasons for reopening and obtaining approval under section 151 of the Act, in the above cited notices, at Column No 8, wherein it was shown as the assessee has voluntarily not filed return of income, based on that approval under section 151(G) of the Act was obtained from Principal Commissioner of Income Taxon 13.3.2019. He submitted that the reasons recorded for obtaining the approval under section 151 is defective and as such defective approval proceedings under section 147 cannot be initiated.
On the other hand ld. DR objected to the submissions of the ld. AR and submitted that the assessment order and first appellate order is ex parte, he submitted that the same may be remitted back to the file of AO.
Considered the rival submissions and material placed on record. I observe that the case of the assessee was taken up for reassessment on the basis of the information that assessee has not filed his return of income even though there is capital assets was transferred. Since there was no response from the assessee the assessment was completed under section 144 of the Act and similarly no compliance was made before first appellate authority. Technically the issue may be sent back to the lower authorities however, it is brought to my notice that assessee, infact, filed his return of income and duly declared the relevant transactions in his return of income filed on 31.07.2013 which is much before the assessing officer came to know of the sale transaction from the stamp authorities. Since it is a jurisdictional issue all the relevant details are already brought on record submitted by the assessee it clearly shows that assessee has not only filed the return of income and also declared the transaction based on stamp duty valuation as per the Registered documents of Rs. 36 Lakhs and duly declared for taxation.
It does not serve any purpose to remit this issue back to the fileof lower authorities. HoweverI observed that the approval was granted to reopen the assessment with the impression that assessee has not filed his return of income even though assessee has filed his return of income. Since the reasons recorded for reopening of the assessment is factually error and void ab initio. Therefore,I am inclined to allow the ground No 7 raised by the assessee. In the result ground No 7 raised by the assessee is allowed and the othergrounds of appeal raised by the assesseeare not adjudicated at this stage.
In the result appeal filed by the assessee is partly allowed.