HARSHA,JIWANA BAGHPAT V. INCOME TAX OFFICER WARD 1(5) BARAUT, BARAUT

ITA 3527/DEL/2023

AI Insights

The case involves an appeal by the assessee, Harsha, against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, which dismissed the assessee's appeal regarding the reassessment of income for the assessment year 2012-13. The reassessment was initiated due to the non-filing of income tax returns by the assessee, who had purchased agricultural land in auction. The Assessing Officer (AO) made an addition to the assessee's income, considering it as undisclosed investment. The CIT (A) did not admit additional evidences provided by the assessee to substantiate the sources of investment, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23591 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Kanpur Coal Syndicate
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: R.K. GAUR
• Keywords: Set aside; Additional evidence; Reassessment proceedings; Principle of natural justice
• Section: 148; 144; 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3527/Del/2023 (ASSESSMENT YEAR 2012-13) Harsha, Jiwana Baghpat-250611, Uttar Pradesh. PAN-ADLPH3085L Vs. Income Tax Officer, Ward-1(5), Baraut. (Appellant) (Respondent) Assessee by Shri R.K. Gaur, CA Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 24/02/2025 Date of Pronouncement 24/02/2025 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) vide order u/s 250 of the Income Tax Act, 1961 (in short “The Act”) dated 01/11/2023 for the Asst. Year 2012-13. 2. Brief facts of the case are that the Assessee is an individual and during this year had purchased an agricultural land measuring 8.8200 hectare in auction jointly with five other persons at a total sale consideration of Rs.1,50,82,200/-. Beside this a sum of Rs. 2 ITA No.3527 /Del/2023 Harsha vs. ITO 7,55,000/- was paid towards stamp duty making total cost of land was at Rs. 1,65,92,000/-. As the assessee has not filed any return of income, the reassessment proceedings were initiated by issue of notice u/s 148 on 29/03/2019. The assessee has not attended the reassessment proceedings and the finally the reassessment order was passed u/s 144/147 of the Act on 7/12/2019 wherein the AO had made the addition of Rs. 27,65,333/- being his share in investment in acquisition of the property from undisclosed sources. 3. Aggrieved by the said order, assessee preferred appeal before ld. CIT(A) and filed additional evidences U/R 46A of the IT Rules, 1962 in support of the sources of investment. The ld. CIT(A) despite of obtaining the remand report from the AO, had not admitted these additional evidences and dismissed the appeal of the assessee. Against such order of ld. CIT(A), assessee is in appeal before the Tribunal on the strength of following grounds of appeal. “1. On the facts and in the circumstances of the case as well as law on the subject, the CIT has erred in making an order u/s 250 as erroneous, arbitrary and bad in law and on facts. “2. On the facts and in the circumstances of the case as well as law on the subject, the Ld. CIT (A) erred on facts and in law in not allowing the appellant application filed under Rule 46A of the Income Tax Act, 1962 for admission of additional evidences and further erred in not considering the evidences filed before him before adjudicating the appeal of the appellant. “3. On the facts and in the circumstances of the case as well as law on the subject, the CIT (A) has erred in not deleting the additions by not considering the remand report submitted to him by Assessing Officer. The Ld. Assessing officer had clearly given a favourable report in his 3 ITA No.3527 /Del/2023 Harsha vs. ITO remand proceedings. Therefore, assessee must have got a relief from CIT (A). 4. On the facts and in the circumstances of the case as well as law on the subject, the learned officer was not justified in treating the invested amount in the property amounting to Rs.27,65,333/- as unexplained investment. The Ld. Officer ignored the fact that the assessee was a part of the AOP which took the auction of the land with other five people also. 5. The appellant reserves the right to add, alter, amend or modify any of the grounds or raise any further ground during the course of hearing of the appeal”. 4. At the outset from the perusal of the orders of the lower authorities, we find that the AO has passed the assessment order ex parte as the assessee has failed to make compliance of any of the notice nor the return of income was filed in response to notice u/s 148. During the course of appellate proceedings assessee claimed that the auction was finally cancelled as the officer who made the auction was not empowered to do so and further filed following documents as additional evidences and made a prayer under rule 46A in the Income tax Rules, 1962 for the admission of the same: 1. Auction Allotment letter annexed as Annexure- 2. Cancellation letter from Government annexed as Annexure 2. 3. Affidavit of Harsha annexed as Annexure 3 4. Affidavit & Other documents of Other Co-Owners of Harsha’s share a. Rajendra Singh annexed as Annexure-4 b. Sanjeev Kumar annexed as Annexure-5 c. Satyaveer annexed as Annexure-6 4 ITA No.3527 /Del/2023 Harsha vs. ITO d. Jaypal Singh annexed as Annexure-7 e. Ritu Devi annexed as Annexure-8 [ 5. From the perusal of the assessment order, we find that the AO has completed the assessment proceedings u/s 144 of the Act and thus all the evidences were filed by the assessee before the ld. CIT(A). All these details go to the root of the matter and thus the same should be admitted and not admitting the same is gross violation of principal of natural justice. Hon'ble Supreme Court in CIT vs. Kanpur Coal Syndicate reported in 53 ITR 225 (SC) held that first appellant authority has plenary powers in disposing of an appeal and he can do what Assessing Officer could do. 6. Ld. CIT (A) had all the powers as of Assessing Officer while considering the appeal of assessee. He had power to reduce/enhance the income. In such circumstances, in the interest of justice and equity, we hold that the CIT (A) should have admitted the additional evidences filed by the assessee and then dispose of the appeal of the assessee. Keeping these facts in consideration, we set aside the order of the CIT (A) and restore the appeal to the CIT (A) with the direction to admit the additional evidences which were filed before him and dispose of the case on merits, no doubt after providing an opportunity of being heard to the assessee. Since we are setting aside the order of CIT (A) to decide the issues on merits de novo, we are not adjudicating on the other grounds raised in the appeal. 5 ITA No.3527 /Del/2023 Harsha vs. ITO 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 24/02/2025. Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24/02/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "