KAILASH BHIL,AJMER V. ITO WARD 2(3), AJMER, AJMER

ITA 175/JPR/2025

AI Insights

The case involves an appeal by Shri Kailash Bhil against the order of the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi, concerning the assessment year 2012-13. The primary issues revolved around the legality of the assessment order under sections 144/148 of the Income Tax Act, the jurisdiction of the AO, and the adequacy of the opportunity provided to the assessee to present his case. The ITAT noted that the assessee had not responded to several notices and had not filed his return of income, leading to a default assessment under section 144. The ITAT found that the assessee was ex-parte before the AO and could not adduce the submission/arguments to settle the dispute in question, leading to the decision to restore the matter to the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782270 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 10-02-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV AWASTHI
• Assessee Lawyers: HEMANG GARGIEYA
• Keywords: Capital asset; Opportunity of being heard; Corroborative evidences; Cost of acquisition; Capital Gains; Principle of natural justice; Competent authority
• Section: 147; 148; 144; 142(1); 133(6); 234B

Judgement Text

"1 vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 175/JPR/2025 fu/kZkj.ko\"kZ@Assessment Year : 2009-10 Shri Kailash Bhil Village: PIPROLI (THAKRAN) Tehsil: SARWAR, SHOKALIYA NASIRABAD Distt: AJMER 302 019 (Raj) cuke Vs. The ITO Ward -2 (3) Ajmer LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: JCJPK 3066 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Hemang Gargieya, Advocate jktLo dh vksjls@Revenue by: Shri Gaurav Awasthi, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 09/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 28 /10/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated 28.01.2025 for the assessment year 2012-13 raising therein following grounds of appeal. ‘’1. The impugned order u/s 144/148 dated 03.12.2019 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. The impugned additions and disallowances made in the order u/s 147 r.w.s. 144 dated 03.12.2019 are bad in law and on facts of the case, Printed from counselvise.com 2 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER for want of jurisdiction and various other reasons and hence the same kindly be deleted. 3. The Id. AO erred in law as well as on the facts of the case in framing the asst. u/s 144 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law The impugned order having been framed in gross breach of natural justice, kindly be quashed. 4. The very action taken u/s 147 r/w 148 is bad in law without jurisdiction and being void ab-initio, the same kindly be quashed. Consequently, the impugned assessment framed u/s 143(3)/148 dated 03.12.2019 also kindly be quashed. 5. The Id. CIT(A) erred in law as well as on the facts of the case in confirming the addition made by the Id. AO without properly considering the cost of conversion of land. The addition so made and confirmed by the Id. CIT(A) is contrary to the provision of law and facts of the case and may kindly be deleted in full. 6. 28,40,427/-: The Id. AO erred in law as well as on the facts of the case in charging interest u/s 234A & 234B of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 7. The appellant prays your honour to add, amend or alter any of the grounds of appeal on or before the date of hearing. 2.1 During the course of hearing, the ld.AR of the assessee vide letter dated 8-10-2025 has prayed to accept the following modified grounds of appeal. ‘’8. Rs.55,71,875/-.The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs.55,71,875/- made by the AO as unexplained short term capital gain on the subjected agricultural property. Hence, the addition so made and confirmed being contrary to the provisions of law and facts kindly be deleted full.’’ Printed from counselvise.com 3 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER Besides the above grounds i.e. 1 to 7, the Bench has also taken into consideration the Ground No. 8 of the assessee for adjudication of the appeal of the assessee. 3.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has party allowed the appeal of the assessee by observing as under:- ‘’5.2 From the perusal of the remand report, it is evident that Ld AO had information that the appellant has sold immovable property for Rs. 57,21,825/- during the year under consideration. Accordingly, the case of the appellant was reopened and notice u/s 148 of the I.T. Act was issued on 28.03.2019 after obtaining necessary approval from the competent authority as per law. After examining the evidence available with the AO and finding that return of income is not filed by the appellant, the Ld AO had come to the prima facie belief that this is a fit case for reopening of the assessment. Thus, there is a clear application of mind by the Ld AO. There is a live link or close nexus between the material obtained and formation of belief. It is not a case where the reasons recorded by the Ld. A.O. are not germane and the Ld. A.O. wanted to simply verify and make fishing enquiries. The Ld. A.O. has applied his mind. After the receipt of the information, AO verified the record. Subsequently, reasons were recorded for reopening the assessment u/s 147 Of the Act and approval was sought from the competent authority. Thereafter, the notice u/s 148 was issued. The notice was sent through registered post on 28.03.2019 vide No. ER637829097IN on the address available as per sale deed, since PAN is not mentioned by the appellant in the said sale deed. This amounts to valid service of notice. Further, I find that the appellant has not responded to the several notices Issued by Ld AO Printed from counselvise.com 4 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER u/s 142(1) and served by registered post and physically served by Inspector. Therefore, I find that the appellant did not cooperate in the assessment proceeding although reasonable opportunity of being heard was provided to him. Thus, in my view, the reopening of the assessment is a valid reopening, and Ld AO was justified in completing the order u/s 144 r.w.s 147 of the Act. Accordingly, I find no merit in the argument of the appellant and this ground of the appellant is dismissed. 6.0 Second ground of the appellant relates to the addition of Rs 55,71,825/- after deduction of Rs 1,50,000/-as cost of acquisition of the land without considering the fact that assessee got it converted to industrial land after incurring expenses. Therefore, it is argued that the acquisition cost has not property considered. During the F.Y. 2011-2012, the assessee has entered in immovable property transactions on 17.11.2011. I find that as per the value adopted by the Sub Registrar for the purpose of Stamp was taken at Rs 57,21,825/-, Therefore, Ld AO has rightly adopted the sale consideration as Rs 57,21,825/- for computation of capital gains. Further, I also note that the appellant has not made any request before assessing officer for referring the matter to departmental valuation officer for getting the valuation done for the Impugned property. As per sale deed above said land is an Industrial Plot situated at Khasra No. 1065 Rakba 10-05-00 Bigha Total Area 16585 Square Meter (also converted from SDM, Sarwar vide order No. 74 dated 24.08.2011). Therefore, the contention of the appellant that the said land is not a capital asset cannot be accepted. Under the circumstances, I agree with the computation of capital of capital gain in respect of the sale of the impugned industrial plot. However, I note that the cost of conversion and other expenses related to improvement of plot has not been considered by Ld AO in the assessment order as the supporting evidence for the same was never produced before assessing officer. Under the circumstances, I direct the appellant to produce Printed from counselvise.com 5 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER supporting evidence in respect of the cost of conversion and other expenses related to improvement of plot. Further, Ld AO is directed to examine the documents submitted and allow the claim of appellant in respect of the cost of conversion and other expenses related to improvement of plot, if satisfied with the supporting evidences produced. Thus, the ground of the appellant is partly allowed. 7.0 Grounds no 3 and 4 relate to charging of interest. This ground is consequential in nature. The AO is directed to verify and charge the correct amount of interest u/s 234A/234B/234C as per law. 8.0 In result, the appeal is partly allowed. 3.2 During the course of hearing, the ld. AR of the assessee prayed to restore the matter to the file of the AO being ex-parte order and the assessee may be provided one more opportunity to adduce the documents required by the AO so that the issue in question could be settled. Further, the ld.AR of the assessee has filed the following paper book to support his submissions. S.N. Particulars Page No. 1. Copy of Notice u/s 148 dated 28-03-2019 1 2. Copy of reasons recorded by AO u/s 148 dated 19-03-2019 2-5 3. Copy of purchase deed dated 24-04-2009 6-11 4. Copy of sale deed dated 17-11-2011 12-21 5. Copy of letter by Sarpanch (Sarana) dated 29-11-2021 22 6. Copy of photos of the subjected lan dated 29-11-2021 (i.e. after the conversion) showing that the subjected land is still being used for agriculture purpose only 23-24 7. Copy of conversion order dated 24-08-2011 alongwith supporting 25-33 Printed from counselvise.com 6 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER documents showing cost of conversion 8. Copy of written submission dated 27-04-2024 filed before the CIT(A) 34-46 9. Copy of Rejoinder filed before the CIT(A) dated 09-09-2024 47-49 3.3 On the other hand, the ld DR objected to such submission of the ld.AR of the assessee and relied upon the orders of the lower authorities. It is also pertinent to mention that the ld. DR vide his letter dated 4-08-2025 filed report received from AO alongwith its enclosures in respect of Shri Kailash Bhil. The ld. DR further submitted that the assessee had received the letter dated 04-09-2019 alongwith copy of notice u/s 148 of the Act on 09-09-2019 which contains the signature of the assessee Shri Kailash. 3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the Department as per information received from DIT (I&CI), Jaipur gathered that during the F.Y. 2011-12 the assessee had entered into immovable property transactions of Rs.57,21,825/- on 17-11-2011. The Department on perusal of ITD system found that the assesee had not filed his return of income for the assessment year under consideration. Hence, the Department after obtaining prior approval gathered information u/s 133(6) of the Act from Tehsildar, Sarwar, Ajmer. In the registered deed, PAN was not mentioned. Thus the Department treated that the assessee has not filed the return of Printed from counselvise.com 7 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER income for the year under consideration. As the assessee had not filed the return of income, therefore, the assessee has not shown the capital gain on the above property transaction. The Department on perusal of registered deed noticed that the assessee had purchased the land and registered in his name on 20-05-2009 but no cost is mentioned. Thus according to the Department it is evident that short term capital gain income chargeable to tax amounting to Rs.57,21,825/- has escaped assessment for the year under consideration by reason of failure on the part of the assessee to disclose fully and truly all materials facts necessary for assessment within the meaning of Section 147 of the Act. Thus the AO noted that that the assessee is having taxable income for the year under consideration but the assessee has not filed his return of income as per provision of Section 139(1) of the Act. It is noted that the Department after recording reasons initiated proceedings u/s 147 of the Act by issuing notice u/s 148 of the Act for which approval was obtained by the Department from the Pr. CIT,Ajmer. The assessee had not filed his return of income in spite of the Notices sent by the Department u/s 142(1) of the Act but the assessee had not responded in any manner and thus the AO had no option except to complete the assessment proceedings u/s 144 of the Act. A final show cause vide dated 4-11-2019 was issued by the Department to the assessee Printed from counselvise.com 8 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER to comply it by 08-11-2019 but the assesee did not respond to it. Hence, the AO assessed the short term capital gain of Rs.55,71,825/- by observing as under:- ‘’The assessee has not responded in any manner. Looking to the above facts and circumstances of the case, the unexplained short term capital gain is assessed at Rs.55,71,825/- after giving benefit of cost of purchase amounting to Rs.1.50,000/-‘’ In first appeal, the ld CIT(A) has partly allowed the appeal of the assessee as mentioned above. The Bench noted that the assessee was ex-parte before the AO and could not adduce the submission / arguments to settle the dispute in question. The Bench considers the prayer of the ld. AR of the assessee that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus, the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any Printed from counselvise.com 9 ITA NO. 175/JPR/2025 SHRI KAILASH BHIL VS ITO, WARD 2(3), AJMER reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 4.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 28/10/2025. Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28 / 10/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Kailash Bhil, Ajmer 2. izR;FkhZ@ The Respondent- The ITO, Ward -2(3), Ajmer 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No. 175/JPR/2025) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar Printed from counselvise.com "