ATAR SINGH,DELHI V. ITO,WARD 70 (1)-DELHI, DELHI

ITA 186/DEL/2025

AI Insights

The case involves Atar Singh, who appealed against the reassessment order passed by the Income Tax Officer (ITO), Ward-70(1), Delhi, for the Assessment Year 2017-18. The reassessment was based on the allegation of undisclosed income and discrepancies in property transaction values. The primary legal contention was the jurisdiction of the FAO to conduct reassessment under the faceless assessment scheme before its official notification. The Tribunal admitted additional grounds of appeal concerning jurisdictional errors and found that the reassessment order was issued without proper authority, leading to its quashing. The Tribunal did not address other grounds of appeal as they became academic following the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716825 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 10-01-2025
• Other Referred Cases: National Thermal Power Corporation vs. CIT, VMT Spinning Co. Ltd Vs. CIT, Siksa O Anusadhan Vs. CIT, CIT Vs. Mohd. Ayyub Agency, CIT Vs. Cellulose Products of India Ltd, P.V.Doshi Vs.CIT, CIT Vs. Mahalaxmi Sugar Mills Co. Ltd, Taylor Instrument Co. (India) Ltd Vs.CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR; ADMITTING THESE LEGAL GROUNDS
• Assessee Lawyers: R. SAHU
• Keywords: Opportunity of being heard; Reassessment proceedings; Sale consideration of property below Jantri Value; TDS; FORM 26AS
• Section: 147; 148; 144; 142(1); 56(2)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 186/Del/2025 (Assessment Year: 2017-18) Atar Singh, C/o CA Mr. Sahu, House No. 651, 1st Floor, Sector-10A, Near G. D. Goenka Public School, Gurgaon-122001, Haryana Vs. ITO, Ward-70(1), Delhi PAN:BDDPS5583H Assessee by : Mr. R. Sahu, CA Revenue by: Shri Manoj Kumar, Sr. DR Date of Hearing 12/08/2025 Date of pronouncement 20/08/2025 O R D E R 1. The appeal in ITA No.186/Del/2025 for AY 2017-18 arises out of the order of the ld. Commissioner of Income Tax (Appeals), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. ITBA/NFAC/S/250/2024- 25/1070294796(1) dated 12.11.2024 against the order of assessment passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 dated 26.03.2022 (hereinafter referred to as ‘the Act’) by AO (hereinafter referred to as ‘ld. AO’). 2. The assessee has raised the original grounds of appeal as under:- “1. That on facts, and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs.2,79,200/- as undisclosed income u/s.69A being cash deposited in the bank account maintained with ICICI Bank without considering the fact that the assessee is a salaried class employee having no other source of income and cash deposited in the bank account was from past withdrawals including savings, thus the assessee prays that addition of Rs.2,79,200/- deserves to be deleted in full. 2. That on facts, and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs.2,79,200/- as undisclosed income u/s.69A and applying the higher tax rate u/s.115BBE @ 60% plus surcharge @25% without considering the fact that higher rate specified u/s.115BBE is applicable for the Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 2 transactions held w.e.f 1 April, 2017, thus the assessee prays that the higher rate of tax including the surcharge applied u/s.115BBE may kindly be not to be applied, accordingly the assessee prays that the undisclosed income of Rs.2,79,200/- deserves to be taxed @30% u/s.115BBE including surcharge as applicable to the normal income. 3. That on facts, and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs.15,90,000/- u/s.56(2)(vii) clause (b) being the difference between the stamp duty value and the actual consideration paid, without considering the fact the sale deed dated 15/09/2016 filed during the appellate proceeding is reflecting Co- Ownership, accordingly the assessee prays that addition of Rs.15,90,000/- confirmed by the CIT (A) may kindly be reduced to his share of 50% in the immovable property. 4. That without prejudice to the grounds of appeal raised at grounds of appeal no.3, that on facts, and in the circumstances of the case and in law, the CIT (A) having co-terminus power with that of the AO, erred in not referring the matter to DVO for valuation of the immovable property as specified in the Proviso 3 of the section 56(2) (vii) clause (b), even though the assessee is insisting that immovable property was purchased as per the market rate prevailing in the locality where the property is situated, thus the assessee prays that the matter of valuation of the property may kindly be referred to the DVO. 5.That the assessee is praying for TDS credit of Rs.4,000/- duly reflected in Form 26AS not allowed by the AO. 6. The above grounds of appeal are without prejudice to each other. The appellant may be allowed to add/amend/withdraw any grounds of appeal at the time of hearing or at any time before hearing with due permission of the Hon'ble Tribunal.” 3. The assessee has raised the following additional grounds of appeal :- 1. That on facts, and in the circumstances of the case and in law, the National Faceless Assessment Centre, Delhi (NFAC-Delhi) erred in having assumed jurisdiction u/s.151A r.w.s 1448 of the I.T Act, 1961 from 13/12/2021 by issuing notice u/s.142(1) for conducting faceless assessment prior to issuance of notification u/s.151A, dated 29/03/2022 for operation of faceless assessment, accordingly the reassessment order dated 26/03/2022 passed u/s.147 r.w.s 144 r.w.s 144B passed by the NFAC, Delhi in violation of the provisions of section 151A r.w.s 144B may kindly be held as null & void and to be quashed. 2. That on facts, and the circumstances of the case and in law, the ITO, Ward 70(1), Delhi [JAO] erred in transmitting the preliminary jurisdictional notice u/s.148 dated 31/03/2021 to an unrelated/wrong Email Id in contravention to section 282 r.w.r 127, thus the preliminary jurisdictional section 148 notice was not served upon the assessee, accordingly the basic jurisdictional requirement was not fulfilled, thus it is prayed that the whole reassessment proceedings Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 3 including the consequential reassessment order may kindly be held as bad in law and to be quashed. POA 3. That on facts, and in the circumstances of the case and in law, the JAO erred in recording reasons to believe with the wrong presumption that the assessee is the sole owner of the immovable property without even not considering the registered sale deed reflecting co- ownership, accordingly jurisdiction assumed for initiation of reassessment proceedings u/s.147 under the un amended provisions by recording incorrect reasons to believe may kindly be held as bad in law, accordingly it is requested to declare the reassessment order dated 26/03/2022 passed u/s.147 r.w.s 144 r.w.s 144B as unsustainable in the eyes of law. (4). That on facts, and in the circumstances of the case and in law, the both the lower erred in making/confirming the addition of Rs.15,90,000/- u/s.56(2) (vii) clause (b) without considering the fact that provisions of the section u/s.56(2)(vii) being deeming provision should be strictly construed, accordingly the addition of Rs.15,90,000/- solely in the assessee ignoring the registered sale deed filed which reflects co-ownership, may kindly be deleted in full. (B).Additional legal jurisdictional grounds of appeal raised above by the assessee are purely legal in nature goes to the root of the matter can be taken as additional grounds at any stage of proceeding and even before the Hon'ble ITAT for the 1st time and are emanating from the records available before the Tribunal. The legal grounds do not require any investigation and all materials are already on record before the Tribunal. (C). That no prejudice will cause to revenue by admitting these legal grounds, since, the revenue will be having a proper and reasonable opportunity of being heard on these issues. ('D). That in the absence of admission of above grounds, the assessee may suffer irreparable loss. (E).It is there humbly prayed before your honour to admit and adjudicate the additional legal jurisdictional grounds of appeal raised above. Reliance in this regard is placed upon the decisions in the cases of \"National Thermal Power Corporation vs. CIT (1998) 229 ITR 383 (SC)\",\"VMT Spinning Co. Ltd Vs. CIT (2016) 389 ITR 326 (P&H)\", \"Siksa O Anusadhan Vs. CIT (2011) 336 ITR 112) [Orissa.HC)\", \"CIT Vs. Mohd. Ayyub Agency (1992) 197 ITR '637 (AII.HC)\". \"CIT Vs. Cellulose Products of India Ltd [1985] 151 ITR 499 (Guj.HC)-(FB)\", \"P.V.Doshi Vs.CIT [ 1978] 113 ITR 22 (Guj.HC)\",\"CIT Vs. Mahalaxmi Sugar Mills Co. Ltd [1993] 200 ITR 275 (Del.HC)',\"Taylor Instrument Co. (India) Ltd Vs.CIT [1992] 198 ITR 1 (Del.HC)\". Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 4 4. I find that the facts relevant for adjudication of the aforesaid additional grounds are already placed on record and they go to the root of the matter. Hence we deem it fit to admit those additional grounds and take up the same first for adjudication. 5. I have heard the rival submissions and perused the materials available on record. I find that the Learned DR had placed the comments received from the Learned AO vide letter dated 4.8.2025 with regard to the additional grounds raised by the assessee. The following list of dates and gists would be relevant for adjudication of the additional ground no. 1 raised by the assessee:- a) Return of income for the Assessment Year 2017-18 was filed already by the assessee but the same was considered invalid due to non-validation or e-verification not done by the assessee. b) As per the information received from Directorate of Income Tax, Investigation and Criminal Intelligence, New Delhi wherein it was reported that assessee had purchased an immovable property for a consideration of Rs. 21 lakhs as against the circle rate of Rs. 36,90,000. The Learned AO concluded that a sum of Rs. 15,90,000 had escaped assessment and accordingly sought to reopen the case of the assessee. c) Notice under Section 148 of the Act stood issued to the assessee on 31- 3-21 as per the old provisions of Section 148 of the Act by the Jurisdictional AO (JAO). d) No return was filed by the assessee in response to notice issued under Section 148 of the Act. e) Notice under Section 142(1) of the Act dated 16-11-2021 together with the questionnaire was issued by the Learned JAO Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 5 f) Notice under Section 142(1) of the Act dated 13-12-2021 was issued by NeFAC Delhi i.e. issued by Faceless Assessing Officer (FAO). g) Show cause notice dated 21-3-2022 stood issued by the FAO to the assessee h) Reassessment stood framed under section 147 r.w.s. 144 read with section 144B of the Act on 26-3-2022 determining total income at Rs 20,92,400/-. i) Faceless scheme for income escaping assessment under section 151A of the Act stood notified on 29-3-2022 vide Notification No. 18/2022 by Central Board of Direct Taxes (CBDT). 6. Now the moot question that arises for my consideration is as to whether the Learned FAO could assume jurisdiction to frame the re-assessment proceedings before the issuance of Notification No 18/2022 dated 29-3-2022 under section 151A of the Act or not? In this regard, it would be relevant to reproduce the provisions of section 151A of the Act which reads as under:- “151A. Faceless assessment of income escaping assessment. (1)The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 10[or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A] or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by—(a)eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible;(b)optimising utilisation of the resources through economies of scale and functional specialisation;(c)introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction.(2)The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:Provided that no direction shall be issued after the 31st day of March, 2022.(3)Every notification issued under sub-section Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 6 (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.” 7. I find that the Notification suggested in section 151A(1) of the Act has been issued only on 29-3-2022. When the faceless regime for income escaping assessment stood notified only on 29-3-2022, the Learned FAO assuming jurisdiction by issuing notices under section 142(1) of the Act under faceless regime and framing reassessment order on 26-3-2022 would be clearly without jurisdiction and having any authority of law. In these circumstances, the reassessment order framed on 26-3-2022 would become non-est in the eyes of law. My view is further fortified by the Co-ordinate Bench decision of Delhi Tribunal in the case of Suresh Chand vs ITO in ITA No. 4110/Del/2024 dated 30- 7-2025 and decision of Kolkata Tribunal in the case of Nabiul Industrial Metal Pvt Ltd vs ITO in ITA No. 1328/Kol/2024 dated 15-10-2024. Accordingly, the additional ground no. 1 raised by the assessee deserves to be allowed in the abovementioned terms and reassessment proceedings framed on 26-3-2022 is hereby quashed. 8. Since the reassessment per se is quashed, the adjudication of other additional grounds and original grounds raised by the assessee become academic and they are left open. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 20/08/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 20/08/2025 A K Keot Copy forwarded to Printed from counselvise.com ITA No. 186/Del/2025 Atar Singh Page | 7 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "