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Judgment
ORDER
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 26.12.2025 arising from the assessment order dated 14.02.2024 passed by the NFAC, Delhi under Section 147 r.w.s 144 of the Income Tax Act, 1961 (‘the Act’) concerning Assessment Year (A.Y.) 2016-17.
The grounds raised by the assessee are as under :
1.The Appellate order dated 26.12.2025 as passed by National Faceless Appeals Centre (in short "Ld. CIT(A)") under section 250 of the Income-tax Act, 1961 (in short "the Act") in upholding the assessment order dated 14.02.2024 as passed by the Assessment Unit, Income Tax Department (in short "Ld. AO") under section 147 r.w.s. 144 of the Act is bad at facts and on law hence, the same is void ab initio and liable to be quashed.
2.That on facts and in law, the ld. CIT(A) has grossly erred in endorsing the Ld. Assessing Officer in exercising the jurisdiction u/s 148A/147/148 of the Act.
3.That on facts and in law, the Ld CIT(A) has grossly erred in upholding the additions of Rs. 80,00,000/- as Unexplained investment made u/s 69 r.w.s 11SBBE of the Act.
4.That on facts and in law, the Ld CIT(A) has grossly erred in upholding the order of the Ld AO wherein the lncome was assessed at Rs.80,00,000/-.
5.That on the facts and in taw, the Ld. CIT(A) has erred in not Legal Ground providing the fair, proper and meaningful opportunity of being heard and passed the Appellate Order in gross violation of cardinal rules of natural justice.
5.1That on the facts and in circumstances of the case, the Ld.CIT(A) has erred in not considering / accepting the Appellant's Request to keep the Appeal in abeyance till the receipt of certified Copies of requested information / Documents under Right To lnformation Act (RTI),2005 on the ground that "....the appellate proceedings cannot be kept in abeyance indefinitely; the Act does not contemplate keeping the appeal pending for want of RTI response.
6.That on facts and in law, Ld CIT(A) has grossly erred in holding that the Ld. AO was correct in levying interest under section 234A & 2348 of the Act of Rs. 22,49,520/- & Rs 23,48,400/- respectively.
7.All the above grounds are independent and without prejudice to one another That the appellant craves lea.ve to add, amend or alter any or all grounds of appeal, with the proper permission of the Hon’ble Bench.”
Brief facts of the case are that according to information available on the insight portal, the assessee had purchased immovable property valued at Rs.80,00,000/- being 4 Bigha of land situated at Khasra No. 191, Laxmipur, Kattai Rampur Road, Moradabad during the financial year 2015-16. On verification of the e-filing records, it was noticed that the assessee had not filed the return of income for the relevant assessment year and, accordingly, the Assessing Officer formed a belief that income to the extent of Rs.80,00,000/- had escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. The re-assessment proceedings were initiated after following the procedure under section 148A, and an order under section 148A(d) was passed on 12.04 2023, followed by issuance of notice under section 148 on the same date.
In absence of any explanation or evidence regarding the source of investment in the immovable property and non-compliance by the assessee, the assessment was completed ex parte under section 144 read with sections 147 and 144B of the Act, wherein the investment of Rs.80,00,000/- in purchase of immovable property was treated as unexplained investment under section 69 and added to the total income of the assessee, to be taxed under section 115BBE of the Act. Aggrieved by the said order the assessee filed the appeal before CIT(A) who confirmed the addition. Aggrieved by the order of CIT(A), assessee is now in appeal before the ITAT.
At the outset, learned AR of the assessee submitted by the learned AR that the case was re-opened on the basis of information that the assessee had purchased a property worth of Rs.80,00,000/-and no return of income is filed for A.Y. 2016-17. It is submitted by the learned AR that the property was purchased for Rs. 20,00,000/- only. The assessee filed the agreement for purchase dated 25.06.2015. Learned AR stated that there is no material on record or documents, which states that property had been purchased for Rs.80,00,000/-.
Per contra, learned DR relied on the orders of the AO.
We have heard the rival submissions and perused the material available on record. We find that the value of investment in said property as per the agreement submitted, which remains uncontroverted, is only Rs.20,00,000/-. The ld DR could not point out any document or evidence to show that the value of the property involved is Rs 80,00,000/-. We further find that the notice u/s 148 has been issued on 12.04.2023, beyond 3 years from the end of relevant assessment year, as per the provision of section 149(1)(b) of the Act. We find that the income chargeable to tax, represented in the form of asset, which has escaped assessment, in the instant case is only Rs.20,00,000/- which does not fulfill the criteria of Rs 50,00,000/- as laid down u/s 149(1)(b) of the Act. In such factual matrix of the instant case, the notice u/s 148 therefore, is held as bad in law and accordingly, quashed. Appeal is allowed.
In the result, appeal of the assessee is allowed.