ITAT Nagpur Quashes Additions Triggered by AIR Property Information When Assessee’s Documents Stand Unrebutted

Background of the Dispute

The case of Sangeeta Sunil Kadoo Vs ITO reached the ITAT Nagpur as an appeal against the order dated 21.02.2024 passed by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (A.Y.) 2013–14.

The assessee questioned both:

  • the validity of the reassessment initiated under Section 148 of the Income Tax Act 1961, and
  • the additions made during such reassessment, particularly sums of ₹10,00,000 and ₹40,95,000.

While multiple legal and procedural objections were initially raised, the Tribunal ultimately granted relief on the substantive merits of the additions, rendering several technical grounds academic and not pressed by the assessee’s side.

Grounds of Appeal Before ITAT

The assessee filed a series of grounds challenging the reassessment and the appellate order. In essence, the contentions were:

1. Challenge to Reassessment Under Section 148

The assessee asserted that the entire reassessment process was invalid, arguing:

  • No opportunity of being heard was afforded prior to issuance of notice under Section 148.
  • The notice under Section 148 issued for reopening did not specifically disclose the reasons for reopening the assessment.

According to the assessee, this procedural lapse vitiated the reopening itself.

2. Transactions Not Pertaining to A.Y. 2013–14

The assessee maintained that the transactions relied upon by the Assessing Officer (AO) were wrongly mapped to A.Y. 2013–14. The position taken was:

  • The impugned transactions actually belonged to A.Y. 2012–13 (Financial Year 2011–12).
  • Consequently, reopening and addition in A.Y. 2013–14 were erroneous in law.

3. Issuance of Two Separate Notices Under Section 142(1)

Another serious objection was directed at the method adopted by the AO in issuing two different notices under Section 142(1) for the same assessment year:

  • One notice dated 25.09.2020 referring to a transaction of ₹10,00,000, duly replied to by the assessee on 12.10.2020.
  • A subsequent notice dated 01.09.2021 concerning a transaction of ₹40,95,000, issued only after the assessee had responded to the earlier notices.

The assessee argued that the second notice was an afterthought, allegedly intended to:

  • aggregate the amounts to cross the monetary threshold of ₹50,00,000,
  • thereby justify initiation of proceedings under Section 148 within limitation.

This, according to the assessee, revealed a predetermined approach rather than an objective exercise of jurisdiction.

4. Breach of Natural Justice by NFAC / CIT(A)

The assessee also attacked the appellate order on the ground that it violated basic principles of natural justice:

  • A partial submission was filed by the assessee on 13.02.2024 (acknowledgement no. 111444871130224).
  • Without affording sufficient time or awaiting the balance submissions, the CIT(A) proceeded to dispose of the appeal.

The assessee contended that deciding the appeal on the basis of an incomplete record was unfair and denied a full and fair opportunity to present the case.

5. Burden to Produce Non-Existent Documents