VISHNU REDDY KUNDOOR,HYDERABAD vs. ITO, INT TAXN-1, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD A-BENCH, HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA Nos.308 & 309/HYD/2026 �नधा�रण वष�/Assessment Year: 2022-2023 VISHNU REDDY KUNDOOR ITO, [INT TAXN]-1 H.NO.6-1-101/17, HYDERABAD-500004, PADMARAO NAGAR,, TELANGANA Vs. SECUNDERABAD-500025, TELANGANA अपीलाथ� Appellant ��यथ� Respondent Permanent Account Number of CJZPK3765L Assessee: अपीलाथ� �वारा/Appellant CA G Srinivasa Rao represented by: ��यथ� �वारा/Respondent SR-AR Mohan Babu represented by: सुनवाई क� तार�ख / Date of conclusion 13.07.2026 of hearing: घोषणा क� तार�ख / Date of pronouncement: 22.07.2026

2 ITA.Nos.308 and 309/Hyd./2026 आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT: These two appeals by the Assessee are directed against the two separate Orders of Ld. CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, both dated 10.11.2025 arising from assessment order passed u/sec.144 of the Income Tax Act [in short "the Act"], 1961 and penalty order passed u/sec.270A of the Act respectively for the assessment year 2022-2023.

“That on the facts and circumstances of the case and in law, 1) the Learned CIT(Appeals), National Faceless Appeal Centre, Delhi, erred in passing the impugned ex-parte appellate order without setting aside the impugned assessment order passed u/s 144 of the Act and referring the matter back to the Assessing Officer u/s 251(1)(a) of the Act for fresh adjudication on the merits. 2) That on the facts and circumstances of the case and in law, the Learned CIT(Appeals), National Faceless Appeal Centre, Delhi, erred in sustaining the addition of Rs.1,12,07,800/- wrongly made by the Learned Assessing Officer towards short term capital gain.

3 ITA.Nos.308 and 309/Hyd./2026

3) That on the facts and circumstances of the case and in law, the Learned CIT(Appeals), National Faceless Appeal Centre, Delhi, and the Learned Assessing Officer, erred in not accepting the appellants method of calculating capital gains arising from sale of flats allotted to him under the joint development agreement (Short-term capital gain of Rs.9,30,370/- and Long term capital gain of Rs.81,52,130/- as disclosed by the appellant in the revised ITR). 4) That on the facts and circumstances of the case and in law, the Learned CIT(Appeals) and the Learned Assessing Officer, erred in not allowing the appellants claim of long- term capital gain exemption of Rs.81,52,130/-u/s 54F of the Act. 5) The appellant craves leave to add/alter/ modify the grounds of appeal as may be required for proper adjudication of the case.

4 ITA.Nos.308 and 309/Hyd./2026 The learned Authorised Representative of the Assessee has submitted that since the assessee is a NRI residing in US therefore, the email of his grandmother was given to the department. However, in the year 2021 the grandmother of the assessee expired and therefore, the assessee could not get communication during the assessment proceedings resulting an ex-parte order passed by the Assessing Officer. He has submitted that the Assessing Officer has not granted the deduction on account of cost of acquisition and improvement of the properties in question while making the addition of short-term capital gain. The learned Authorised Representative of the Assessee has further submitted that though in Form-35 email-ID was given, however, the Authorised Representative could not track the proceedings before the learned CIT(A) and therefore, the appeal filed by the assessee was also dismissed by passing the impugned order ex-parte for want of supporting evidence. The learned Authorised Representative of the Assessee has thus submitted that the assessee may be given one more opportunity to present his case before the Assessing Officer

5 ITA.Nos.308 and 309/Hyd./2026 by filing the supporting evidence in respect of the cost of acquisition of the properties in question and pleaded that the matter may be remanded to the record of the Assessing Officer for fresh adjudication.

6 ITA.Nos.308 and 309/Hyd./2026 record. The Assessing Officer has made the addition inter alia, on account of short-term capital gain by estimating the cost of acquisition of Rs.42,200/- and benefit of indexation was not allowed for want of documentary evidences. Thus, the Assessing Officer has assessed the capital gain by his own estimation of cost of acquisition whereas undisputedly, the flats in question were newly constructed and therefore, the cost of acquisition of the flats being cost of land and construction and indexed cost of the same was to be allowed for assessing the real income on account of short term capital gain. The learned Authorised Representative of the Assessee has explained the reasons for non-participation on behalf of the assessee before the Assessing Officer which were also considered by the learned CIT(A) while condoning the delay in filing the appeal before the learned CIT(A) specifically the peculiar facts that the assessee is a resident of USA and was depending upon the relatives as well as Tax Consultant for attending the tax matters before the Tax Authorities. The learned Authorised Representative of the Assessee has further explained that the grandfather who was only family

7 ITA.Nos.308 and 309/Hyd./2026 member staying in India also expired in 2021 and therefore, the assessee was not having proper communication of the notices and orders passed by the authorities below. Since the Assessing Officer has assessed the short term capital gain by allowing the cost of acquisition based on his own estimation and without any proper basis and also not allowed the indexed cost of acquisition therefore, by considering the facts and circumstances of the case and in the interest of justice, we allow one more opportunity to the assessee to present his case and file the supporting evidence for verification and examination of the Assessing Officer. Accordingly, the impugned order of the learned CIT(A) passed in quantum appeal is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after giving one more opportunity to the assessee to present his case before passing the fresh order.

8 ITA.Nos.308 and 309/Hyd./2026 7. In the penalty appeal ITA.No.309/Hyd./2026, the assessee has raised the following grounds:

“That the Learned CIT(Appeals), National Faceless Appeal 1) Centre, Delhi erred in upholding the penalty order u/s 270A of the Act dt.01-07-2024, as the AO failed to record satisfaction specifying the charge under clauses (a) to (f) of section 270A(9) in the SCN/Order, rendering it bad-in-law and liable to be quashed.

2) That the Learned CIT(Appeals), National Faceless Appeal Centre, Delhi has erred in not quashing the impugned penalty order as bad-in-law, since the Learned Assessing Officer initiated the penalty proceedings u/s 270A(9) for misreporting of income but finally concluded them u/s 270A(2) for under reporting of income, rendering the charges vague and non-specific.

That the Learned CIT(Appeals), National Faceless Appeal 3) Centre, Delhi erred in sustaining the penalty of Rs.15,35,267/- imposed u/s 270A(2) of the Act without appreciating the fact that the addition made in the assessment order was arbitrary and liable to be deleted.

4) The appellant craves leave to add/alter/ modify the grounds of appeal as may be required for proper adjudication of the case.”

9 ITA.Nos.308 and 309/Hyd./2026 the matter in quantum appeal is remanded to the record of the Assessing Officer therefore, the penalty levied u/sec.270A of the Act, has no legs to stand. Accordingly, the penalty levied by the Assessing Officer is set aside and remanded to the record of the Assessing Officer for taking appropriate action as per the outcome of the quantum appeal remand proceedings.

Order pronounced in the open court on 22.07.2026.

Sd/- Sd/- MANJUNATHA G. VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, dated 22nd day of July, 2026 VBP

10 ITA.Nos.308 and 309/Hyd./2026

Copy to: VISHNU REDDY KUNDOOR, H.NO.6-1-101/17, 1 PADMARAO NAGAR, SECUNDERABAD-500025, TELANGANA 2 ITO, [INT TAXN]-1, 5TH FLOOR, AAYKAR BHAVAN, HYDERABAD - 500004, TELANGANA 3 THE PR.CIT-[IT & TP], HYDERABD. 4 THE D.R., ITAT, HYDERABAD A-BENCH, HYDERABAD. 5 GUARD FILE TRUE COPY VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO ASSISTANT REGISTRAR/ Date: 2026.07.22 I.T.A.T., HYDERABAD RAO 13:18:50 +05'30'