JYOTI CHAUHAN,NEW DELHI V. ASSESSING OFFICER WARD 6(1), DELHI

ITA 6368/DEL/2025

AI Insights

The case involves Ms. Jyoti Chauhan, who appealed against the order of the CIT(A) concerning the assessment year 2014-15. The primary contention was the assessment made under sections 147 and 144B of the Income Tax Act, 1961, which significantly increased her declared income from Rs. 5,95,360 to Rs. 2,01,23,938. The AO had disallowed a capital gains exemption and added the amount as income, citing non-compliance with the statutory requirements and lack of evidence to support the claims made by the assessee. The CIT(A) dismissed the appeal ex-parte due to non-compliance with multiple notices. The Tribunal, considering the circumstances presented by the assessee, decided to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832339 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 08-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: GAUTAM SWAROOP
• Keywords: Opportunity of being heard; Period of limitation; Capital Gains; Principle of natural justice; Rectification of order; Benefit of exemption; Penny stocks; Bogus
• Section: 147; 148; 154; 68

Judgement Text

"6368_DEL_2025_Jyoti Chauhan vs AO Ward 6(1) 1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT & MRS. RENU JAUHRI, HON’BLE ACCOUNTANT MEMBER ITA No. 6368/DEL/2025; Assessment Year: 2014-15 Ms. Jyoti Chauhan 17/12 First Floor Mall Road Tilak Nagar New Delhi- 18 Vs AO Ward 6(1) (APPELLANT) (RESPONDENT) PAN No. AACPC8456E Assessee by : Shri Gautam Swaroop, Advocate Revenue/Department by : Shri Ajay Kumar Arora, Sr. DR Date of Hearing: 20.01.2026 Date of Pronouncement: 20.01.2026 ORDER PER RENU JAUHRI : The above captioned appeal is preferred by the assessee against the order dated 30.09.2025, passed by Ld. CIT/NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as, “Act”) in Appeal No. NFAC/2013- 14/10295934 for A.Y. 2014-15. 2. The assessee has raised following grounds of appeal: “1.That the assessment framed is without jurisdiction and contrary to law. 2. That the Ld. AO has erred both on facts and on law in determining the total income of appellant at Rs. 2,01,23,938/- against the Printed from counselvise.com 6368_DEL_2025_Jyoti Chauhan vs AO Ward 6(1) 2 | P a g e declared income of Rs. 5,95,360/- in an order of assessment passed u/s 147 r.w. Section 144B of Income Tax Act, 1961. 3. That in any case and in any view of the matter, action of Ld. AO in framing the impugned assessment order u/s 147/143(3) of the Act is bad in law and against the facts and circumstances of the case. 4. That the Assessment order passed u/s 147 r.w. Section 144B is without the jurisdiction since the notice issued u/s 148 of the Act is beyond the period of limitation as prescribed under the provisions of Section 149 of the Act. 5. That without conducting any independent enquiry and without supplying the material documents and/or information which was a mandate condition prescribed u/s 148A(b) of the Act had issued a Show-cause notice u/s 148A(b) and consequentially passed an order u/s 148A(d) and subsequently issued notice u/s 148 of the Act. 6. That the action of the Ld. AO having drawn an adverse inference and passing an assessment order without supplying the material documents is against the principles of the natural justice. 7. That the Ld. AO has erred both on facts and law without complying with statutory conditions provided u/s 151A of the Act. 8. That the Notice issued u/s 148 of the Act is invalid in law as no DIN was generated while issuing notice for the AY 2014-15. 9. That having regards to the facts and circumstances of the case, the Ld. AO has erred in law and on facts in making an addition of Rs. 1,95,28,578/- u/s 68 of the Act on account of sale of shares of M/s Dayanand Singh & Life Line Securities Limited, by treating the same as bogus long term capital gain as credit in Appellant’s bank account and has further erred in not allowing the bonafide claim of exemption u/s 10(38) of the Act as claimed by the Assessee and that too by recording incorrect facts and findings and without providing the entire adverse material on record and without observing the principle of natural justice. 10.That the Ld. AO erred in not considering the replies and submission of the assessee filed during the assessment proceedings. 11.That in any case and in any view of the matter, action of Ld. AO in making the addition of Rs. 1,95,28,578/- u/s 68 of the Act on account of sale of shares of M/s Dayanand Singh & Life Line Securities Limited, by treating the same as bogus long term capital gain as credit in appellant’s bank account and not allowing the bonafide claim of benefit of exemption u/s 10(38) of the Act, is bad in law and against the facts and circumstances of the case. Printed from counselvise.com 6368_DEL_2025_Jyoti Chauhan vs AO Ward 6(1) 3 | P a g e 12. That the levy of interest is disputed and as such unsustainable in law. 13. That the Appeal has been decided by the Ld. CIT(A) without having any reference or consideration towards the revised demand raised on the Assessee pursuant to the rectification order under Section 154 of the Act. As such, the Impugned Order is bad and non est in law. 14. That the Ld. CIT(A) erred in failing to grant a reasonable opportunity of being heard to the Assessee before carrying out a rectification under Section 154 which had the effect of enhancing/increasing the liability on the Assessee. 15. That the Ld. CIT(A) has erred in law and on facts in assuming jurisdiction under Section 154 of the Income Tax Act, 1961 to levy a penalty, when the issue involved was highly debatable and beyond the limited scope of \"mistake apparent from record.\" 16. That the impugned rectification order is void ab initio, bad in law, and beyond the scope of Section 154, inasmuch as penalty proceedings are substantive and cannot be fastened through rectification of an alleged mistake. 17. That the Ld. CIT(A)/AO enhanced the liability on the Assessee by virtue of a rectification under Section 154 on 08.07.2025 and then hurriedly passed the order under Section 250 on 30.09.2025 without affording the Assessee a reasonable opportunity to place its objections on record. 18. That the Ld. CIT(A) has dismissed the grounds no. 2, 5, 6, 7, 9 and 11 raised by the Assessee in its Form No. 35 solely on the basis of lack of evidence. The Ld. CIT(A) ought to have appreciated that the addition purportedly made on the Assessee was even otherwise illegal, and contrary to facts and the position in law. 19. That the Assessee was aggrieved by the revision of the demand pursuant to the Ld. CIT(A)'s invocation of Section 154 on 08.07.2025 and that she was in the process of preparing the relevant submissions and objections when the order under Section 250 was passed by the Ld. CIT(A). 20. That the Ld. CIT(A) erred in law and on facts in not affording the appellant an opportunity to amend or file additional grounds of appeal arising out of the rectification order under section 154, thereby violating the principles of natural justice. Printed from counselvise.com 6368_DEL_2025_Jyoti Chauhan vs AO Ward 6(1) 4 | P a g e 21. That the Ld. CIT(A) erred in merely endorsing the findings of the Assessing Officer without independent application of mind, contrary to the quasi-judicial function vested in the appellate authority. 22. That the order passed under section 250 within a short span after rectification u/s 154 indicates pre-determination and lack of fair consideration, vitiating the appellate process. ” 3. Brief facts of the case are that the assessee filed return for A.Y. 2014-15 on 27.03.2025, declaring total income of Rs. 5,95,355/-. Based on information available with the department, Ld. AO issued a notice u/s 148 on 26.07.2022 on the ground that the assessee had traded in penny stocks and failed to offer the resultant income for taxation. The assessee filed return in response on 05.08.2022, declaring income of Rs. 5,95,360/-. As the assessee submitted only partial details during the assessment proceedings, Ld. AO disallowed the entire capital gains exemption of Rs. 1,95,28,578/- claimed u/s 10(38) and added it u/s 68 r.w.s 115BBE of the Act vide order u/s 147 r.w.s 144B dated 29.05.2023. Aggrieved, the assessee preferred an appeal before Ld. CIT(A). As no compliance was made to multiple notices issued by the Ld. CIT(A), the appeal was dismissed ex-parte vide order dated 30.09.2025. Further aggrieved, the assessee has filed an appeal before the Tribunal. 4. Before us, Ld. AR has submitted that proper compliance before the lower authorities could not be made by the assessee due to the fact that she was preoccupied with the medical treatment of her spouse who was very ill during the period from 01.10.2021 to 24.09.2025. In support, the assessee has filed the Printed from counselvise.com 6368_DEL_2025_Jyoti Chauhan vs AO Ward 6(1) 5 | P a g e medical reports of her spouse, Shri Raj Bahadur Chauhan, in the form of a paperbook. In the light of these facts, Ld. AR has requested that the matter may be restored back to Ld. AO for fresh consideration. Ld. DR has not objected to the said proposition. 5. We have heard both the parties and perused the material placed on record. In the interest of justice, we deem it appropriate to restore the matter to Ld. AO for fresh consideration on merits after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to be vigilant to make requisite compliance before the Ld. AO. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 20-01-2026. Sd/- Sd/- (MAHAVIR SINGH) (RENU JAUHRI) VICE PRESIDENT ACCOUNTANT MEMBER Dated:27.01.2026 Pooja Mittal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "