JAIDEV VINOD KUMAR GUPTA,MUMBAI V. CIRCLE 13(2)(2), MUMBAI, MUMBAI

ITA 6626/MUM/2025

AI Insights

This case involves an appeal by Jaidev Vinod Kumar Gupta against the order of the National Faceless Appeal Centre (NFAC), Delhi, which was passed in relation to an assessment order by the National Faceless Assessment Centre, Delhi, under sections 147 and 144B of the Income-tax Act for the Assessment Year 2017-18. The primary contention in the appeal was the dismissal of the assessee's appeal by the CIT(A) for non-prosecution, which the assessee argued was not in line with settled law. Additionally, the assessee contested the additions made to his income regarding the sale of immovable property, arguing that the transfer was completed in a previous financial year and that the applicable sections of the Income-tax Act were misapplied. The Tribunal noted the absence of effective representation at the first appellate stage and decided to remit the matter back to the Assessing Officer for a fresh assessment, providing the assessee an opportunity to present his case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 835552 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Appeal Filed On: 16-10-2025
• Other Referred Cases: PCIT v Swananada Properties, CIT v Neelkamal Realtors, Pankaj v NeAC, Vimal Trading
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Business income; Capital asset; Opportunity of being heard; Additional evidence; Reasonable cause; Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 147; 144; 43CA; 56(2)(vii)(b); 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 6626/MUM/2025 Assessment Year: 2017-18 Jaidev Vinod Kumar Gupta Ramsarovar, 1st Nadiadwala Colony, Malad West, MUMBAI - 400064 (PAN: AGOPG0611M) Vs. CIRCLE 13(2)(2), MUMBAI (Appellant) (Respondent) Present for: Assessee : Shri Hemant Sharma, CA Revenue : Shri Sushil B. Shende, Sr. DR. Date of Hearing : 09.02.2026 Date of Pronouncement : 11.02.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1073548806(1), dated 21/02/2025, passed against the assessment order by National Faceless Assessment Centre Delhi, u/s. 147 r.w.s. 144B of the Income-tax Act (hereinafter referred to as the “Act”), dated 31.03.2022 for Assessment Year 2017- 18. Printed from counselvise.com 2 ITA No. 6626/Mum/2025 Jaidev Vinod Kumar Gupta AY 2017-18 2. Grounds taken by assessee are reproduced as under: Ground 1 Order of CIT (A) – not decided on merits, despite so claimed a) On the facts and in circumstances of the case and in law, the ld. CIT (A) failed to realise that deciding the appeal on merits, requires determination & appreciation of the facts to apply the law, which is absent in his order. b) On the facts and in circumstances of the case and in law, the ld. CIT (A) failed to realise that merely rectifying the section misquoted by ld. AO, does not mean “the case…being decided on merits and on the basis of available facts on record”, more so when the facts adduced by additional evidence are uncontested. The dismissal of appeal is bad in law and deserves to be quashed. Ground 2 Order to be passed on merits; not to be dismissed for non-prosecution a) The dismissal of appeal by ld. CIT (A) primarily for nonprosecution by ‘YA’, as evident vide para 6.6 of the order, violates the law settled by Hon’ble SC in Chenniyappa Mudiliar. b) The ld. CIT (A) failed to realise that none of the cases relied upon for dismissal, were dismissed for non–prosecution, even as the documents on record are not disputed, denied or deprecated. The order deserves to be quashed. Ground 3 No inquiry, remand back, or set-aside 3.1. The failure of the ld. CIT (A) to: a) ‘make such further inquiry as he thinks fit’ empowered vide section 250 (4), or b) obtain a remand report, w.r.t. additional evidence admitted, renders the dismissal of appeal bad in law. 3.2. The failure of ld. CIT (A) to set-aside the order passed under section 144, by invoking the proviso to clause (a) of sub-section (1) of section 251, more so when the ld. AO also failed to provide sufficient opportunity, and additional evidence remaining uncontested, makes the dismissal bad in law. Ground 4 Sale of stock-in-trade in financial year 2011-12 (ie AY 2012-13) a) Transfer of gala – completed in FY 2011-12 The ld. AO failed to realise that when a transferor cannot enforce any rights in respect of an immovable property– on receiving part payment and handing over its possession, upon signing a written contract (though not registered then), and the transferee is willing to perform his part of the contract– transfer is complete u/s 53A of TOPA; transfer is accordingly effected in FY 2011-12. b) No provision at relevant time to attract stamp duty value Without prejudice, the ld. AO failed to appreciate that at the relevant time (ie AY 2012-13) there was no provision in the Act for deeming the consideration received on sale of stock-in- trade (ie asset other than capital assets) on the basis of stamp duty valuation, as held by hon’ble Bombay HC in PCIT v Swananada Properties. Printed from counselvise.com 3 ITA No. 6626/Mum/2025 Jaidev Vinod Kumar Gupta AY 2017-18 c) Sec. 43CA cannot be applied to transfer in FY 2011-12 Without prejudice, the ld. AO failed to appreciate that even section 43CA, applicable from AY 2014-15, cannot be applied to transfer in FY 2011-12 of stock-in-trade (ie asset other than capital assets) as it is not retrospective, as held by hon’ble Bombay HC in PCIT v Swananada Properties P Ltd. d) Sec. 50C does not apply to determine Business Income Without prejudice, the ld. AO failed to appreciate that section 50C does not apply to transactions determining 'Profits and gains of business or profession', as held by hon’ble Bombay HC in CIT v Neelkamal Realtors Ground 4 Sale of stock-in-trade in financial year 2011-12 (ie AY 2012-13) (a) Transfer of gala – completed in FY 2011-12 The ld. AO failed to realise that when a transferor cannot enforce any rights in respect of an immovable property– on receiving part payment and handing over its possession, upon signing a written contract (though not registered then), and the transferee is willing to perform his part of the contract– transfer is complete u/s 53A of TOPA; transfer is accordingly effected in FY 2011-12. (b) No provision at relevant time to attract stamp duty value Without prejudice, the ld. AO failed to appreciate that at the relevant time (ie AY 2012-13) there was no provision in the Act for deeming the consideration received on sale of stock-in- trade (ie asset other than capital assets) on the basis of stamp duty valuation, as held by hon’ble Bombay HC in PCIT v Swananada Properties. (c) Sec. 43CA cannot be applied to transfer in FY 2011-12 Without prejudice, the ld. AO failed to appreciate that even section 43CA, applicable from AY 2014-15, cannot be applied to transfer in FY 2011-12 of stock-in-trade (ie asset other than capital assets) as it is not retrospective, as held by hon’ble Bombay HC in PCIT v Swananada Properties P Ltd. (d) Sec. 50C does not apply to determine Business Income Without prejudice, the ld. AO failed to appreciate that section 50C does not apply to transactions determining 'Profits and gains of business or profession', as held by hon’ble Bombay HC in CIT v Neelkamal Realtors. Ground 5 Section 56(2)(vii)(b) applies to receiving an immovable property Without prejudice, the ld. AO failed to realise that there is no purchase of any immovable property; hence section 56(2)(vii)(b) lacks applicability. The order making addition under this section, on sale of property is bad in law. Ground 6 CIT (A) fails to set-aside the order Without prejudice, the reinstating of the power of the first appellate authority to set-aside an order passed under section 144 by ld. AO, in the interest of justice and fairness, warrants that the case be setaside for fresh assessment by AO. The order of ld. CIT(A) dismissing the appeal, in limine, deserves to be set-aside as warranted by proviso to section 251(1)(a). Ground 7 Denial of opportunity Printed from counselvise.com 4 ITA No. 6626/Mum/2025 Jaidev Vinod Kumar Gupta AY 2017-18 a) The ld. CIT (A) failed to realise that the order passed by ld. AO, prior to expiry of date given to file response to SCN-cum-draft assessment order, leads to breach of principles of natural justice resulting in grave civil consequences, as held by Hon’ble Delhi HC in Renew Power P Ltd. b) The ld. CIT (A) failed to realise that the SCN issued at 23.13 hrs on 30.3.2022 on the portal and not delivered on email of YA, requiring YA to file response by 23.59 hrs on 31.3.2022, denies sufficient and effective time & opportunity to respond, and is hence bad in law. c) The ld. CIT (A) failed to realise that the order passed by ld. AO, without granting proper and meaningful opportunity to respond to the show-cause notice violates the ratio decidendi of the law propounded by hon’ble Bombay HC in Pankaj v NeAC Ground 8 Order without granting a personal hearing illegal & non-est On the facts and in circumstances of the case and in law, the order of ld. CIT (A), violates the ratio of the law enshrined in the judgment of Bombay HC in Vimal Trading, that “an order passed without granting personal hearing to assessee was illegal and non-est”. Ground 9 No application of mind The ld. AO repeatedly refers, both in SCN & order, to section 56(vii)(2)(b)(ii), a non-existing section, demonstrating no application of mind, making the order bad in law. 3. There is a delay of 169 days noted by that Registry in filing the present appeal before the Tribunal for which application for condonation of delay along with affidavit is placed on record. We have considered the petition for condonation of the said delay. Upon perusal of the same and hearing both sides, we deem it fit to condone the delay on the ground that there was sufficient cause for the said delay. Accordingly, we condone the delay to take up the matter for adjudication. 4. At the outset, it was noted the first appeal before the ld. CIT(A) was dismissed by the ld. CIT(A) by observing that assessee after having granted several opportunities to represent his case failed to make any submissions in support of the grounds raised therein. Accordingly, he held appeal of the assessee as liable to be dismissed. Thus, the same was dismissed by upholding the addition made by the ld. Assessing Printed from counselvise.com 5 ITA No. 6626/Mum/2025 Jaidev Vinod Kumar Gupta AY 2017-18 Officer amounting to Rs.38,85,500/- on account of purchase of immovable property u/s.56(2)(vii)(b) of the Act. Assessee had not filed return of income for the year under consideration. Ld. Assessing Officer had received information through CCIT-5, Mumbai vide letter dated 15.05.2019, according to which assessee had sold immovable property by entering into an agreement dated 25.10.2016 for a consideration amounting to Rs.39,00,000/-. The stamp duty valuation was recorded at Rs.77,85,500/-. Accordingly, the difference of Rs.38,85,500/- towards the sale consideration shown in the documents and the value adopted by the Sub-registrar for the purpose of stamp duty was considered to be escaping assessment. Accordingly, notice u/s.148 was issued on 30.03.2021. Assessee filed his return in response to the said notice reporting total income at Rs.78,75,800/-. Assessment was completed u/s.147 r.w.s. 144B on 31.03.2022 with total income assessed at Rs.1,17,61,300/-. 5. We note that no representation has been made at the first appellate stage on the grounds raised by the assessee because of which ld. CIT(A) was constrained to dismiss the appeal for non-prosecution. We also take note of the explanations furnished by the assessee in the affidavit filed for the purpose of condonation of delay in filing the appeal before the Tribunal. It is discerned from the contents of the affidavit that assessee had reasonable cause to not able to furnish the required details in the hearings held for first appeal. In the absence of effective representation at the first appellate stage, we find it appropriate in the interest of justice and fair play to remit the matter back to the file of ld. Assessing Officer for denovo meritorious adjudication on the issue for which re-opening proceedings were initiated. Needless to say that assessee be given reasonable opportunity of being heard to make all the Printed from counselvise.com 6 ITA No. 6626/Mum/2025 Jaidev Vinod Kumar Gupta AY 2017-18 required submissions for substantiating his claim. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 6. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 11 February, 2026 Sd/- Sd/- (Anikesh Banerjee) (Girish Agrawal) Judicial Member Accountant Member Dated: 11 February, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai Printed from counselvise.com "