Case Law Details
Nirmal Kishore Jain Vs Addl./Joint/ Dy. /ACIT (ITAT Delhi)
In a recent decision, the Income Tax Appellate Tribunal restored a matter to the Assessing Officer for fresh adjudication after observing that the lower authorities had failed to properly consider the assessee’s submissions and documentary evidence.
The appeal was filed against the order dated 25.08.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi. The assessee challenged the denial of relief under Section 54F and also disputed the enhancement of property value from Rs. 40,00,000 to Rs. 53,06,500. The assessee argued that the authorities had wrongly applied the proviso to Section 54F and failed to appreciate evidence showing that the property in question constituted a single building. According to the assessee, several factual submissions and documentary evidences were ignored without any objections, adverse findings, or comments from the authorities, and the appellate order had been passed mechanically in violation of principles of natural justice.
Before the Tribunal, counsel for the assessee submitted that the CIT(A) had dismissed the appeal without properly examining the submissions and material available on record. It was contended that the appellate authority merely upheld the Assessing Officer’s action without adjudicating the issues on merits. The assessee further argued that despite filing various facts and evidences to establish that the building was a single unit, the same were not considered. The assessee therefore requested that the impugned order be set aside and the matter be remanded for fresh adjudication.
The Departmental Representative relied on the orders passed by the lower authorities.
After examining the record, the Tribunal observed that the Assessing Officer had passed the assessment order without duly considering the details and documents furnished by the assessee during the proceedings. The Tribunal also found that the CIT(A) upheld the Assessing Officer’s action without adjudicating the issues on merits or properly appreciating the material available on record, which was held to be not in accordance with law.
The Tribunal further stated that lower authorities are duty-bound to pass orders based on the material available on record and after due consideration of the merits of the case. Since this had not been done, the Tribunal held that the assessee should be given another effective opportunity to present the case in the interest of natural justice.
Accordingly, the Tribunal set aside the impugned orders and restored the matter to the file of the Assessing Officer for fresh adjudication on merits after considering the submissions, evidences, and material on record. The Assessing Officer was directed to provide adequate opportunity of hearing to the assessee, while the assessee was directed to extend full cooperation during the remand proceedings. The Tribunal clarified that all legal grounds and contentions remained open. Since the matter had been remanded, the Tribunal did not adjudicate the remaining grounds raised in appeal. The appeal was therefore allowed for statistical purposes. The order was pronounced on 30 April 2026.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is filed by the Assessee against the order 25.08.2025 of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 25.08.2025
2. Grounds of appeal raised by the Assessee are as under:
1. Ground No. 1 relates to the Ground No. 1 of appeal filed/order received dated 25/08/2025.
(Issue of relief u/s 54F).
That order passed by Ld. CIT (Appeals), NFAC, Delhi dated 25/08/2025 is bad in law and has been passed without appreciating the facts and circumstances of the case and alleging wrongly on the assessee that the assessee reiterated the same facts again whereas the fact of the matter is that various facts has been submitted by the assessee to prove that the building was a single building but unfortunately has not been considered at all and impugned order has been passed.
The proviso of section 54F itself has been wrongly applied and has been mistakenly not accepted.
The various facts submitted by the assessee has not been objected, denied, no adverse view pointed out nor commented upon, ie. documentary evidences completely ignored, yet mention in the order that after “careful consideration” but factually it is mentioned only in a mechanical manner and impugned order has been passed without considering various facts given by the assessee, yet order passed against the principal of natural justice.
2. This Ground No. 2 relates to the Ground No. 2 of appeal filed/order received dated 25/08/2025.
Regarding enhancement of Property Value by Rs. 13,06,500/- (from Rs. 40,00,000/- to Rs. 53,06,500/-):
That order passed by Ld. CIT (Appeals), NFAC, Delhi dated 25/08/2025 is bad in law and has been passed without appreciating the facts and circumstances of the case and alleging wrongly on the assessee that the assessee reiterated the same facts again whereas the fact of the matter is that various facts has been submitted by the assessee to prove that the building was a single building but unfortunately has not been considered at all and impugned order has been passed.
The various facts submitted by the assessee has not been objected, denied, no adverse view pointed out nor commented upon, i.e. documentary evidences completely ignored, yet mention in the order that after “careful consideration” but factually it is mentioned only in a mechanical manner and impugned order has been passed without considering various facts given by the assessee, yet order passed against the principal of natural justice.
That the assessee reserves the right to amend, delete, add, substitute, modify or alter any one or more of the grounds of appeal at the time of hearing.
Note: That the assessee has also filed appeal before your honour (ITAT Delhi) against the order of PCIT dated 31/03/2021. (appeal filed vide acknowledgement No. 1634628847 dated 19/10/2021) on the same issue, which may kindly be clubbed for precise hearing purpose and oblige.
4. At the outset, the ld. Counsel for the Assessee submitted that the main grievance of the Assessee is that the Ld. CIT(A), without properly considering the submissions and the material available on record and adjudicating the issues on merits, dismissed the appeal by merely upholding the action of the Assessing Officer. It has further been submitted that the order passed by Ld. CIT (Appeals), is bad in law wherein it was mentioned that the assessee reiterated the same facts again whereas the fact of the matter is that various facts has been submitted by the assessee to prove that the building was a single building but unfortunately has not been considered at all and impugned order has been passed. Furthermore, the contention of the Assessee is that various facts submitted by the assessee has not been objected, denied, no adverse view pointed out nor commented upon, i.e. documentary evidences completely ignored and the order has been passed in mechanical manner which is against the principal of natural justice. Accordingly, the Assessee made a prayer to quash/set aside the impugned order of the Ld. CIT(A) and to remand the matter to the file of the lower authorities for fresh adjudication.
5. Per contra, the Ld. DR relied mostly on the orders of the authorities below.
6. We have carefully considered the findings recorded by the Ld. Assessing Officer in the assessment order as well as those of the Ld. CIT(A) in the appellate order, and have also taken into account the submissions advanced by the Ld. Departmental Representative. It is observed that the assessment order has been passed by the Assessing Officer without duly considering the details and documents furnished by the Assessee during the proceedings before the lower authorities, as well as the material available on record and the facts and circumstances of the case. The Ld. CIT(A), in turn, has upheld the action of the Assessing Officer without adjudicating the issues on merits or properly appreciating the material available on record, which is not in accordance with law.
7. The lower authorities are duty-bound to pass orders on the basis of material available on record and after due consideration of the merits of the case, however, the same has not been done in the present case. In these circumstances, and in the interest of the principles of natural justice, we are of the considered view that the Assessee deserves to be afforded one more effective opportunity to present its case.
8. Accordingly, we set aside the impugned orders and restore the matter to the file of the Assessing Officer for fresh adjudication de novo on merits, after duly considering the submissions and evidences that may be furnished by the Assessee, as well as the material available on record. Needless to add, the Assessing Officer shall afford adequate and reasonable opportunity of being heard to the Assessee. The Assessee is also directed to extend full cooperation in the remand proceedings. All grounds and contentions available under law are kept open. Ordered accordingly.
9. Since we have remanded the matter back to the file of the AO, therefore, we are not giving any findings on other grounds of appeal raised by the Assessee. Therefore, the appeal of the Assessee stands allowed for statistical purposes.
10. In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open court on April, 2026
Order pronounced in the open court on 30th April, 2026
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