Smt. Poonam Rathore Vs ITO (ITAT Indore)
The Income Tax Appellate Tribunal, Indore Bench, allowed the assessee’s appeal concerning Assessment Year 2011-12 and set aside the order passed by the CIT(A). The dispute arose from an assessment framed under sections 144/147 of the Income-tax Act, 1961, in which the Assessing Officer treated ₹46,78,800 as unexplained investment under section 69. The assessee was a non-filer and the reassessment proceedings were initiated on the basis of Non-PAN AIR information relating to an immovable property transaction.
The Assessing Officer issued notice under section 148 on 20.03.2018 and subsequent statutory notices. According to the supplied material, the assessee did not comply with the notices and did not file an income-tax return in response to section 148. Further opportunities were provided through letters dated 06.08.2018 and 14.11.2018, but these were also not complied with. The assessment was accordingly completed ex parte under sections 144/147 on 21.12.2018, determining total income at ₹46,78,800.
In the first appellate proceedings, the assessee produced additional evidence, including the sale deed, bank account details, agricultural land records and other documents. The CIT(A) called for a remand report. On examination of the sale deed, the Assessing Officer reported that the assessee was one of three co-owners and therefore had a one-third share in the property. The Assessing Officer consequently proposed that the unexplained investment attributable to the assessee should be restricted to ₹15,59,600, being one-third of ₹46,78,800.
The CIT(A) accepted this aspect of the remand report and restricted the addition from ₹46,78,800 to ₹15,59,600. The CIT(A) nevertheless did not accept the assessee’s explanation regarding the source of investment and held that the additional evidence did not establish the claimed agricultural income. The first appeal was accordingly partly allowed.
Before the ITAT, the assessee challenged the reassessment proceedings, the addition under section 69, the adoption of ₹46,78,800 as the property value, and the treatment of the additional evidence. The assessee contended that the agricultural land had actually been purchased on 28.03.2011 for ₹24 lakh and that her share of the purchase consideration was approximately ₹8,66,737. The assessee also submitted that the source of investment was agricultural income arising from ancestral agricultural land holdings of approximately 45 acres.
The assessee further relied upon the sale deed and agricultural land records contained in the paper book, along with agricultural produce receipts issued by Krishi Mandi Astha, Sehore, in the name of her husband, Anil Rathore. It was submitted that the relevant evidence supported the agricultural source of the investment.
The Revenue supported the impugned order but submitted that the agricultural landholding and agricultural receipts could be verified by the CIT(A). The Revenue ultimately left the issue to the Tribunal’s consideration.
The Tribunal first noted that the original assessment under sections 144/147 had been made ex parte and that the matter had not originally been examined on merits. It also considered the sale deed dated 28.03.2011, which recorded the purchase of 3.33 acres of agricultural land for ₹24 lakh by three co-owners, including the assessee.
The Tribunal specifically considered the statutory position concerning section 56(2)(vii)(b). It noted that the relevant amendment providing for consideration of stamp duty value where the consideration was lower than such value was brought into force with effect from 01.04.2014. On the facts and statutory position recorded in the order, the Tribunal held that the purchase price of ₹24 lakh, rather than ₹46,78,800, was to be considered.
Accordingly, the Tribunal determined the assessee’s one-third share at ₹8 lakh. It further observed that sufficient evidence concerning the agricultural landholding and agricultural income had been placed on record in the paper book and that the Revenue had not questioned the veracity of those documents.
In view of these findings, the Tribunal set aside the impugned CIT(A) order. The appeal of the assessee was allowed and the amount attributable to the assessee was determined with reference to the actual purchase price of ₹24 lakh, resulting in a one-third share of ₹8 lakh.
The order was pronounced in open court on 10.07.2026.
FULL TEXT OF THE ORDER OF ITAT INDORE
This is an Appeal filed by the Assessee under section 253 of the income tax Act 1961,[ herein after referred to as the Act for sake of brevity] before this tribunal as and by way of a second appeal. The Assessee is aggrieved by the order bearing no: – ITBA/APL/S/250/2025-26/1083000495(1) dated 26.11.2025 passed by the Ld. CIT (A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year is 2011-12 and the corresponding previous year period is from 01.04.2010 to 31.03.2011.
2. Factual Matrix
2.1 That as and by way of an Assessment order made u/s 144/147 of the Act, the total income of the Assessee was computed & assessed at Rs. 46,78,800/-. The assessee was a non-filer. That the aforesaid assessment order is dated 21.12.2018, which is hereinafter referred to as the “Impugned Assessment Order”.
2.2 That the assessee was a non-filer.
2.3 That basis “non PANAIR data and information” it was revealed to the department that the assessee had purchased an immovable property of Rs. 46,78,800/-.
2.4 That a notice dated 20.03.2018 u/s 148 was issued on 20.03.2018 by speed post to the assessee. A notice dated 27.04.2015 u/s 142(1) was issued for 14.05.2018. On 14.05.2018 there was a total non-compliance by the assessee.
2.5 That by a letter dated 06.08.2018 one last opportunity was given for 17.08.2018 to the assessee but same was not complied with.
2.6 That by a letter 14.11.2018 one more last opportunity was afforded to the assessee for 28.11.2018 but same was not complied with.
2.7 No ITR was filed in response to the notice u/s 148. Since the assessment was getting time barred on 31.12.2018 and therefore basis material on record the “Impugned Assessment Order” was passed on 21.12.2018 by the Ld. AO.
2.8 That the assessee being aggrieved by the aforesaid “Impugned Assessment Order” prefers the first appeal u/s 246A of the Act before the Ld. CIT (A) who by the “Impugned Order” has dismissed [partly allowed] the first appeal of the assessee on the grounds and the reasons stated therein. The core grounds and reasons for the dismissal of the first appeal [partly allowed] were as under:-
07. Observations, findings and Decision:-
7.1 The appellant – Poonam Rathore, an individual, failed to file the return u/s 139 of the I.T. Act. Further the case was re-opened for escapement of income and the AO made an addition of Rs. 46,78,800/- u/s 69 of the I.T. Act, 1961. Being aggrieved with the order, the appellant preferred an appeal.
7.2 I have carefully considered the facts of the case and the submission of the appellant. I have perused the order dated 21/12/2018 passed by the AO for A.Y. 2011-12 u/s. 144 of the Income-tax Act as well as the grounds of appeal, statement of fact and written submission filed by the appellant.
7.3 All the grounds are identical in nature and related to addition u/s 69 of the I.T. Act, 1961. Hence, all grounds are taken up together for adjudication.
7.4 In the instant case, I have gone through Form No. 35, submission of the assessee, grounds of appeal, statement of facts and assessment order u/s 144. On going through the facts, it is seen that the AO had made an addition u/s 69 of the I.T. Act, 1961. Assessee’s contention was to the effect that addition for the relevant financial year as applicable in terms with the Finance Act.
7.5 In this instant case the assessee failed to file the return u/s 139 of the I.T. Act. Further the case was re-opened for the escapement of income. Subsequently, the AO sent notices u/s 148 of the Act to assessee to explain the source of the investment. Further, statutory notices were issued but the assessee failed to submit or compliance with the assessment proceeding. In the assessment order the AO clearly mentioned that the assessee has failed to file any submission in response to the various notices were issued by the AO.
7.6 It is evident from the assessment order that the assessee failed to produce the documentary evidences during assessment proceedings for the claims made by him. Further, as per AO, in his assessment order it is mentioned that the assessee has not submitted any supporting documents in support of its source of income. The assessee has failed to furnish the copy of supporting documents to substantiate the genuineness of source investment.
7.7 As the assessee submitted additional evidence in the stage of appeal in accordance with Rule 46A of the I.T. Act, 1961, the AO was directed to submit remand report and the same is appended below.
Sub: Remand Report in the case of POONAM RAJ… for AY 2011-12 with reference to Appeal Number CIT(A), Bhopal- 210308/2018-19-Regarding.
Kindly refer to this office remand report submitted on 01/05/2025 vide DIN No. ITBA/APL/F/25/2025/205… and 20/05/2025 vide DIN No. ITBA/APL/R/2025-26/1763258571, the same is resubmitted as under for kind consideration.
Kindly refer to the direction to submit remand report.
It is submitted that in the case assessment order u/s 144/147 of the IT Act was passed on 21/12/2016 for AY 2011-12. During the course of assessment proceedings, sufficient opportunities of being heard were provided to the assessee and the rule of natural justice was duly followed. In the assessment order, following addition was made:
| Issue/ground on which addition was made | Amount of addition in Rs. |
| Return Income | Nil |
| Unexplained income | Rs. 46,78,800/- |
| Total Assessed Income | Rs. 46,78,800/- |
It is further submitted that as per directed of CIT(A) to go through the additional Evidence and examine/verify the documents, the desired report of this office is as under:
As per Non PAN AIR information, the assessee had sold out an immovable property at Rs. 46,78,800/- during the financial year 2010-11. Accordingly, after recording the reasons, a notice under section 148 for the AY 2011-12 was issued to the assessee on 20/03/2018. But no compliance was made by the assessee. During the course of assessment proceedings deliberately, accordingly, assessment order was passed as ex-parte assessment under sections 144/147 of the IT Act. On going through the assessment order, it is found that the assessee had made investment to purchase an immovable property during FY 2010-11. Market value of the purchased property was Rs. 46,78,800/-. As per information available on record with the then AO, the said information had been received through AIR Non PAN. As the assessee had not made any compliance to the notices issued by the then AO, accordingly, assessment order was passed and total investment of Rs. 46,78,800/- was treated accordingly.
Comments of the Assessing Officer
In this context, as per Rule 46A, the assessee-appellant may not be entitled to produce before your Honour any evidence, since during the assessment proceedings in this case the assessee was afforded sufficient opportunities. Further, it is submitted that as per direction of the Ld. Faceless Appellate Unit, the submissions made by the assessee have been examined and the additional documents have been considered. The desired report of this office is as under:
A remand notice was issued to the assessee on 06/03/2025 vide DIN No. ITBA/COM/S/191/2024-25/1074149885(1) and the case was fixed for hearing on 17/03/2025. In compliance with the aforesaid notice, the assessee requested, “Please give me 07 days’ time as I have not received my bank statement from bank, hence I am not able to appear before you.” Through e-mail, on the request of the assessee, a further notice was issued to the assessee on 17/03/2025 vide DIN No. ITBA/COM/F/SS/2024-25/1074574987(1) to submit her reply on or before 24/03/2025.
In compliance with the aforesaid notice, the assessee submitted a copy of Form No. 35, copy of sale deed, copy of bank account details of her husband Shri Anil Rithore, copy of assessment order and Form P-II Khasra/Bahi etc. through the ITA portal.
In the written submission before your Honour, the sale deed has been submitted. On perusal of the sale deed, it is found that the property was purchased by the assessee with two co-owners, i.e. Smt. Aarti Malviya and Smt. Chintani Meena. As per the sale deed, the assessee was 1/3 investor in the purchase of immovable property worth Rs. 46,78,800/-.
The assessee stated that the source of investment in the purchased agricultural land was from the ancestral agricultural land, which is about 45 acres, and the assessee’s husband accrued the income from this land by agricultural activities. The assessee has failed to submit documentary evidence regarding agricultural activities and the agricultural income claimed by her, which is also cleared from the bank statement of the husband of the assessee.
On examination of the documents and reply of the assessee, I am of the opinion that the investment made by the assessee should be taken as 1/3 of the total investment of Rs. 46,78,800/-, and total investment from undisclosed sources may be treated as Rs. 15,59,600/-, if deemed fit, as the source of investment could not be explained. Further, the Ld. Appellate Unit is requested to decide the matter on the basis of merits of the case while passing the appellate order.
The AO has mentioned in his remand report that the assessee has not submitted any cogent evidence for the source of investment and failed to submit any document in support of its agricultural income. The appellant has not submitted any details to
prove that he was prevented by convincing reason for not submitting the evidence during the original assessment proceedings. However, the AO mentioned in his remand report that the assessee is the owner for the one-third part of the total investment. Hence, the total investment proposed as undisclosed is Rs. 15,59,600/-. The AO has provided fair and sufficient opportunity to the appellant to present the submissions during the assessment proceedings. Thus, adhering to the condition of Rule 46A the additional evidence filed by the appellant and considering the remand report submitted by the AO the addition is made in the assessment order is restricted to Rs. 15,59,600. Therefore, the additional evidence furnished by the assessee is not accepted in light of Rule 46A. The appellant’s share in the investment is only one-third of the purchase value. Hence, AO in his remand report has rightly considered it and submitted that the investment in the form of purchase value should be one-third. Hence the contention made by the appellant in additional evidence in the stage of appeal is duly addressed and hence acceptable.
To sum up, it is held that the addition mad by the AO is restricted to the actual ownership of the assessee. It is also held that as per remand report submitted by the AO, addition is restricted to Rs. 15,59,600/- is confirmed. The contention made by the appellant is not acceptable.
08. In the result, the appellant’s appeal is partly allowed.
2.9 That the assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this tribunal and has raised the following grounds of appeal in the form no. 36 against the “Impugned Order” which are as under:-
GROUNDS OF APPEAL
Grounds of Income-Tax appeal before the Hon’ble Income-Tax Appellate Tribunal, Indore Bench, Indore, against the Appellate Order passed under s.250/144/147 of the Income-Tax Act, 1961 by the learned Addl. / Joint Commissioner of Income-Tax (Appeals)-1, Nashik, pertaining to the A.Y. 2011-12 in response to the appeal filed against the Assessment Order under s. 144/147 of the Act, passed by the Income-Tax Officer, Sehore.
1. (i). That, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in assuming the jurisdiction under s. 147 of the Income-Tax Act, 1961, by issuing notice under s. 148 of the Act on 20.03.2018, and framing the assessment in consequence thereof, without there being any tangible material or objective reason to believe that the income of the appellant had escaped assessment for the relevant assessment year.
1 (ii). That, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in assuming the jurisdiction for framing the assessment under s. 147 of the Act merely on the basis of Non-PAN AIR information, without having any independent application of mind and without recording any objective reason to believe as regard to the escapement of any income chargeable to tax in the hands of the appellant.
2 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in sustaining the addition to the extent of Rs.15,59,600/- by partly confirming the action of the AO in framing an ex-parte Assessment Order under s. 147 r.w.s. 144 of the Income-Tax Act, 1961, determining the total income of the appellant at Rs. 15,59,600/- as against NIL income, which is quite unjustified, unwarranted and bad-in-law.
3. That, without prejudice to the above, the learned CIT(A) grossly erred, both on. facts and in law, in sustaining the addition of Rs. 15,59,600/- made by the AO on the allegation of unexplained investment by invoking the provisions of s. 69 of the Act, without properly considering and appreciating that the actual purchase consideration for the agricultural land purchased jointly on 28.03.2011 was only Rs.24,00,000/-, and the appellant’s share therein was merely Rs.8,66,737/-, and not the market value of Rs.46,78,800/- as erroneously adopted by the AO.
4 (1). That, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO in adopting the market value of the immovable property (Rs.46,78,800/-) as the basis for invoking s. 69 of the Act, in place of the actual purchase consideration of Rs.24,00,000/-, without appreciating that the provisions of s. 56(2)(vii) mandating adoption of stamp duty value for the purchaser were introduced only with effect from A.X. 2014-15 (by the Finance Act, 2013), and s. 50C of the Act is a deeming provision applicable exclusively to the computation of capital gains in the hands of the seller, having no bearing whatsoever on the purchaser’s investment for the purposes of s. 69 of the Act.
4 (ii). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in sustaining the addition based on the market value of Rs. 46,78,800/- without appreciating that neither the AO nor the learned C11(A) had made any reference to the Departmental Valuation Officer under s. 142A of the Income-Tax Act, 1961, for the purpose of ascertaining the fair market value of the agricultural land in question, and in the absence of any such independent valuation, the adoption of the market value as reflected in the AIR information, without any corroborative material, is wholly arbitrary, unsustainable and contrary to the settled principles of law.
5. That, the learned CIT(A) further grossly erred, both on facts and in law, in not accepting and in disregarding the verifiable explanation furnished by the appellant that the source of investment for the purchase of the agricultural land was from the agricultural income derived from the ancestral agricultural land holdings of approximately 45 acres belonging to the family of the appellant’s husband and brothers-in-law, which income is wholly exempt under s. 10(1) of the Income-Tax Act, 1961.
6. That, the learned CIT(A) grossly erred, both on fads and in law, in refusing to admit and consider the additional evidence produced by the appellant in the appellate proceedings, including the Sale Deed, Agricultural Receipts, Purchase Registry, Form P-II / Khasra Bahl of the family members, and Bank Account details, on the ground of alleged noncompliance with Rule 46A of the Income-Tax Rules, 1962, without properly appreciating that the appellant, being a housewife residing in the remote area of Doraha village, Sehore, was prevented by sufficient cause from producing the said evidence during the original assessment proceedings, inasmuch as the notices issued by the AO were not received by the appellant.
7. That, the learned CIT(A) grossly erred, in law, in not appreciating that the assessment order passed ex-parte under s. 144 of the Act, without affording a reasonable and effective opportunity of hearing to the appellant, is vitiated by breach of the principles of natural justice, and the same deserved to be set aside on this ground alone.
8. That, even assuming without conceding that any addition was warranted, the learned C.11 (A) grossly erred, both on facts and in law, in restricting the addition to Rs.15,59,600/- being one-third of the market value of Rs.46,78,800/-, by relying upon the remand report of the AO, without appreciating that the said addition ought to have been computed, if at all, only with reference to the actual purchase consideration of Rs.24,00,000/-and not on the basis of the inflated market value, and that the appellant’s proportionate share of the actual purchase consideration was only Rs.8,66,737/- (approximately), the source whereof stood satisfactorily explained.
9. That, the appellant further craves leave to add, alter or amend the foregoing ground of appeal as and when considered necessary.
3. Record of Hearing
3.1 The hearing in the matter took place before this Tribunal on 06.07.2026 when the Ld. AR for & on the behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside. It was next contended that the registry has pointed out the delay of 24 days in filing the instant second appeal. A condonation of delay application along with an affidavit dated 04.07.2026 is placed on the record. After carefully perusing both “COD and an affidavit” and after hearing both the Ld. AR and the Ld. DR we condone the delay and admit the appeal for hearing, as “sufficient cause” is shown. The Ld. AR has placed on the record of this tribunal a paper book containing pages 1 to 53. The Ld. AR then submitted that the assessee is house wife. The Ld. AO in the “Impugned Assessment Order” has computed the total income at Rs. 46, 78,800/- The assessee along with her two close relatives was owners of certain agriculture land. The assessee share therein is 1/3rd. The “Impugned Assessment Order” was an ex-parte order u/s 144/147 of the Act. The first appeal before the Ld. CIT (A) was filed along with an application for bringing the additional evidence on record since the “Impugned Assessment Order” was an ex-parte order. The Ld. CIT (A) then during the course of the first appellate proceedings called for a remand report from the Ld. AO which was partially accepted by the Ld. CIT (A) and remaining were not considered. The assessee share to the extent of Rs. 15, 59,600/- i.e. 1/3rd Rs. 46,78,800/- was recognised and accepted. The first appeal was partly allowed. It was submitted that the remand report and comments of the Ld. AO are at internal pages 8 and 9 of the “Impugned Order”. The Ld. AR then briefly stated that the assessee is co-owner to the land which was purchased on 28.03.2011 as agriculture land for Rs. 24 Lakh. It is situated in remote area. The purchase amount to be paid by the assessee was at Rs. 8, 66,737/- and not Rs. 46, 78,800/- as assessed by the Ld. AO in the “Impugned Assessment Order”. The source of investment of the purchased agriculture land was from the ancestral agricultural land [Agriculture income] which was exempted u/s 10(1) of the Act. If price of land is considered as Rs. 24 Lakh (purchase price of 2011) then the assessee 1/3rd share comes to Rs. 8 Lakh only. The Ld. AR then canvassed the arguments on the “sources” of assessee income as “agriculture income” from the “ancestral agriculture land” where her husband along with other family members are co-owners. Our attention was invited to PB pages 21&22 which was agriculture land “Rid Pustika” of Anil Rathore the husband and so also of Sunil Rathore and Kamlesh Rathore [PB pages 23 to 26]. Arguments on section 56 of the Act were too canvassed. In support of source of the agriculture income our attention was invited to PB pages 46,47,48 which were receipts of agriculture produce issued by Krishi Mandi Astha, Dist.-Sehore, MP all in the name of Anil Rathore husband of the assessee. It was submitted that remand report is at internal page 8&9 of the “Impugned Order” where no finding is given by the Ld. AO [remand report] on documents produced in support of agriculture income i.e. ownership of ancestral agriculture land of 45 Acre. Per contra the Ld. DR appearing for the revenue has contended that “Impugned Order” does not call for any interference and evidences of the agriculture holding and agriculture receipts needs verification at the end of the Ld. CIT (A), provided these documents are placed before him. He however in final analysis left the issue to the wisdom of the tribunal to take appropriate call. Hearing was then over and concluded.
4. Observations Findings & conclusions
4.1 We have to decide the legality, validity and proprietary of the “Impugned Order” basis records of the case & the rival submission canvassed before us.
4.2 We have carefully perused the records of the case and have heard the submissions.
4.3 We basis records of the case & after hearing & further upon examining the rival contentions of the Ld. AR & the Ld. DR canvassed before us are of the considered opinion that the “Impugned Assessment Order” is u/s 144/147 of the Act and the matter originally was not examined basis merits. In the “Impugned Order” basis remand report of the Ld. AO the total income of the assessee (addition) was determined at Rs. 15,59,600/- from Rs. 46,78,800/- [the Ld. AO order]. However as per the Ld. AR the 1/3rd share of the assessee if calculated from purchase value of Rs. 24 Lakhs comes to Rs. 8 Lakh only with source being agriculture income as her husband owns agriculture land. The necessary evidence in this regard is placed in the paper book as discussed (supra). The sale deed is dated 28.03.2011 PB pages 12 to 20, which is for 24 Lakhs for 3.33 Acres, village, Kajuri, Tehsil- Huzur, Dist.- Bhopal. Seller is Devi Prasad (Devi Singh) S/o Shri Nathuram (through PoA holder Rakesh Rathore) and buyers are Arati Malviya, Chintamani Meena and Mrs. Poonam Rathore w/o Anil Rathore of village Doraha, Dist.-Sehore. The value of this land was determined by the Ld. AO at Rs. 46,78,800/- which was reduced to Rs. 15,59,600/- [1/3rd share]. [By CIT (A)] At the material time i.e. 28.03.2011, provision of section 56 (2) (vii) (b) was not in the act as it came in force on 01.04.2014. Prior thereto section 56(2)(vii)(b) read as under “any immovable property without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property” whereas by finance act 2013 wef 01.04.2014 section 56(2)(vii)(b) was amended which reads as under:-
56(2)(vii)(b) any immovable property.
(ii) For a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees the stamp duty value of such property as exceeds such consideration”.
In view of the above we hold that purchase price of Rs. 24 Lakhs holds the field and not Rs. 46,78,800/- as quantified and later reduced to 1/3rd value at Rs. 15,59,600/- by “Impugned Order”. We therefore in light of above determine purchase price at Rs. 24 Lakhs and accordingly 1/3rd share of the assessee at Rs. 8 Lakhs.
4.4 In view of the premises laid drawn by us we quantify amount of Rs. 8 Lakhs (supra). In so far source of Rs. 8 Lakh is concerned we hold that sufficient evidence is placed on record with regard to agriculture holding and agriculture income in the paper book and the Ld. DR has not questioned the veracity of such documents. Under these facts and circumstances also we set aside the “Impugned Order” of the Ld. CIT (A).
4.5 In view of the above, we set aside the “Impugned Order”.
5. Order
5.1 In the result the Appeal of the Assessee is allowed.
Pronounced in open court on 10.07.2026.
