INCOME TAX OFFICER , GURGAON V. MADHU YADAV, GURGAON

ITA 3894/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer (ITO), Gurgaon against Madhu Yadav concerning the assessment year 2015-16. The appeal was directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, which had deleted additions made on account of Long Term Capital Gain (LTCG) without a remand report from the AO on the additional evidence filed during the appellate proceedings. The Revenue contended that the CIT(A) had admitted additional evidence without giving the AO a chance to verify its veracity, thus violating the principles of natural justice. The Tribunal agreed with the Revenue's submissions, noting the infringement of Rule 46A(3) of the Income Tax Rules, 1962, which mandates a reasonable opportunity for the AO regarding additional evidences admitted by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34220 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Keywords: Set aside; Capital asset; Additional evidence; Principle of natural justice
• Section: 147; 144; 250; 2(14)

Judgement Text

"ITA No.3894/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA No.3894/Del/2024 [Assessment Year : 2015-16] ITO Gurgaon vs Madhu Yadav H.No.286, Sector 18 Sarhaul, Gurgaon-122001 PAN-AZIPM3872B APPELLANT RESPONDENT Appellant by Shri Amit Katoch, Sr. DR Respondent by None Date of Hearing 19.02.2025 Date of Pronouncement 27.02.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The instant appeal has been filed at the instance of the Revenue seeking to assail the First Appellate order dated 27.06.2024 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 30.03.2023 passed u/s 147 r.w.s 144 of the Act pertaining to assessment year 2015-16. 2. The Revenue has raised following grounds of appeal:- 1. “Whether on the facts and circumstances of the case and law, the CIT(A) is right in deleting the addition that the mother of the assessee had paid tax liability on sale consideration and not the assessee as tax liability is individual specific. 2. Whether on the facts and circumstances case and law the decision of Hon'ble CIT(A) is right in deleting of additions made of Rs. 25177500 on account of LTCG without calling for remand report on the additional evidence filed during the appellate proceedings. 3. Whether on the facts and circumstances of the case and law, additional evidence can be admitted without concurrence of AO & valid grounds and accepted without verification by AO and 3rd party verification.” ITA No.3894/Del/2024 Page | 2 3. When the matter was called for hearing, none appeared for the assessee. It is seen from the record that the assessee has not appeared in the earlier dates of hearing. Thus, having regard to the continued non-compliance, we are constraint to proceed ex-parte. 4. The Ld. Sr. DR for the Revenue pointed out that the assessment in the present case was carried out under s. 144 of the Act owning to failure of the assessee to substantiate her case that Long Term Capital Gain (“LTCG”) arising on sale of property do not fall within the definition of ‘capital assets’ under s. 2(14) of the Act and consequently no taxable capital gain arises. The assessee in the first appeal obtained relief from the CIT(A) based on additional evidences as referred to para 6.2 of the first appellate order. However, the additional evidences have been admitted by the CIT(A) without any corresponding opportunity to the AO to examine the veracity of the additional evidences. The Ld. Sr. DR thus submitted that the first appellate order has been passed in favour of the assessee by taking cognizance of the additional evidences without confronting those evidences to the AO in violation of principles of natural justice. 5. We straightway agree with the submissions made on behalf of the Revenue that CIT(A) has decided the issue based on evidences which were not placed before the AO either at the time of assessment or confronted in the course of appellate proceedings. Rule 46A(3) provides for reasonable opportunity to the AO qua the additional evidences if so admitted by the CIT(A). The relief granted by CIT(A) based on additional evidences, without opportunity to the AO is thus in direct infringement of Rule 46A(3) of the Income Tax Rules, 1962 and hence cannot be sustained in law. 6. The first appellate order is thus set aside. However, keeping in mind the circumstances, we consider it appropriate to restore the matter back to the file of the AO for denovo determination in accordance with law after giving reasonable opportunity to the assessee. It shall be open to the assessee to ITA No.3894/Del/2024 Page | 3 place such evidences and explanations thereon as may be considered expedient in support of her return of income. 7. In the result, the appeal of the Revenue is allowed for statistical purposes. Order pronounced in the open Court on 27th February, 2025. Sd/- Sd/- (YOGESH KUMAR US) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "