PRAVALIKA NAREDDY,BENGALURU vs. INCOME TAX OFFICER, WARD-5(3)(3), BENGALURU

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ITA 3066/BANG/2025Status: DisposedITAT Bangalore16 July 20265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in the interest of justice, granted one final opportunity to the assessee before the AO to submit documentary evidence for claiming deduction under Section 54. The assessee was cautioned to cooperate fully.

What were the facts?

The assessee did not file a return of income for AY 2020-21. Information revealed sale of an immovable property for Rs. 59 lakhs. Despite multiple notices from the AO and CIT(A), the assessee remained non-compliant.

What were the issues?

Whether the assessee should be granted another opportunity to submit evidence for capital gains exemption, despite prior non-compliance with notices from tax authorities.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148A,Section 148,Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI KESHAV DUBEY

For Appellant: Shri. Mahesh G T - Advocate
For Respondent: Shri. Pradeep S - Addl. CIT(DR)(ITAT), Bengaluru
Hearing: 01.07.2026Pronounced: 16.07.2026

N THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.3066/Bang/2025 Assessment Year : 2020-21 Pravalika Nareddy Vs. Income Tax Officer, Flat No 2303, Burgundy Block, Brigade Ward-5(3)(3) Exotica, Ramapura, Virgonagar, Bmtc Building, Bengaluru-560049, Karnataka Koramangala PAN : BFDPM9475G Bangalore-560095, Karnataka APPELLANT RESPONDENT Assessee by : Shri. Mahesh G T - Advocate Revenue by : Shri. Pradeep S - Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 01.07.2026 Date of Pronouncement : 16.07.2026 O R D E R Per Balakrishnan S, Accountant Member : This appeal filed by the assessee against the order of learned CIT(A) (NFAC, Delhi], vide DIN and Order ITBA/NFAC/S/250/2025- 26/1083318469(1) dated 04.12.2025, for the Assessment Year 2020-21 arising out of the Order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, dated 10.02.2025.

2.

Briefly stated facts of the case are the assessee did not file return of income for the Assessment Year 2020-21. As per the information available in the insight portal, in Form 26AS it was noticed that during the Financial

ITA No.3066/Bang/2025 Page 2 of 5

Year 2019-20, the assessee has sold an immovable property for a consideration of Rs.59 lakhs. Thereafter, the learned AO issued a show cause notice under section 148A(b) of the Act, on 01.01.2024 requiring the assessee to submit reply on or before 12.01.2024. The assessee did not respond. Thereafter, the learned AO passed the Order under section 148A(d) of the Act with the approval of Pr.CIT, Bangalore, and issued notice under section 148 of the Act on 29.01.2024. Subsequently, statutory notices and reminder letters were issued and served on the assessee to submit the documentary evidences. Assessee never responded. Finally, a show cause notice under section 144 of the Act dated 09.12.2024 was issued and served on the assessee. In response, the assessee submitted a copy of the sale deed of immovable property for Rs.50 lakhs. Further, the AO on 18.01.2025 issued a final show cause notice proposing the additions to be made. Assessee failed to comply with the notice. The learned AO, based on the information available on record, made an addition of Rs.59 lakhs as short-term capital gain of the assessee for the Assessment Year 2020-21.

3.

On being aggrieved by the order of the learned AO, assessee filed appeal before the learned CIT(A). Before the learned CIT(A), the assessee was non-compliant for any other notices issued by the learned CIT(A). The learned CIT(A), therefore, dismissed appeal of the assessee.

4.

On being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us by raising following grounds:

ITA No.3066/Bang/2025 Page 3 of 5

1.

The Order of the Authorities below, in so far as these are against the assessee, is opposed to law, weight of the evidence, probabilities, facts and circumstances of the Appellant’s case. 2. The learned authorities erred by not considering the submission made in respect of proof of reinvestment made after the sale of the immovable property. 3. The learned Authorities erred by not considering the documents submitted in support of grounds of appeal made along with Form 35 while filing the appeal. 4. The learned Authorities erred in law without verifying the records available on record and sustained the addition and dismissed the appeal. 5. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed, and the addition made by the Assessing Officer and sustained by the Commissioner of Income Tax (Appeals) be deleted in the interest of equity and justice.

5.

The only issue contested by the assessee is with regard to non- consideration of cost of acquisition of the immovable property by the assessee during the impugned Assessment Year and further investment made in new residential property which was claimed as exemption under section 54 of the Act. The learned AR submitted that assessee could not comply with the notice issued by the learned AO and the learned CIT(A), based on the sole belief that the assessee is not subjected to tax after claiming exemption under section 54 of the Act. He also submitted that copy of the sale deed and the investment in the new house property was submitted before the AO on 15.12.2024. He further stated that the learned AO failed to consider the documentary evidences furnished by the assessee.

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He, therefore, prayed for one more final opportunity before the learned AO to substantiate the deduction claimed under section 54 of the Act.

6.

Per contra, the learned DR strongly objected to the remanding back of the issue stating that both the AO and the learned CIT(A) have provided multiple opportunities whereas the assessee did not comply with any of the notices except seeking adjournments. He therefore prayed that the Order of the learned CIT(A) be upheld.

7.

We have heard the rival contentions and perused the material available on record. It is an admitted fact that assessee has filed the return of income for the impugned Assessment Year declaring net capital gains and the deduction claimed under section 54 of the Act. It is also a fact that assessee has not complied with various notices issued by the learned AO and the learned CIT(A). However, in the interest of justice, considering the prayer of the learned AR, we are inclined to grant one more final opportunity before the learned AO to consider the documentary evidences furnished by the assessee. At the same breath, we also caution the assessee to co-operate in the assessment proceedings and furnish all the documentary evidences before the learned AO without seeking unnecessary adjournments failing which the learned AO is at liberty to decide the issue on merits based on the material available on record. Thus, the grounds raised by the assessee are partly allowed for statistical purposes.

ITA No.3066/Bang/2025 Page 5 of 5

8.

In the result, appeal of the assessee is allowed.

Pronounced in the open court on the date mentioned on the caption page.

Sd/- Sd/- (KESHAV DUBEY) (BALAKRISHNAN S) Judicial Member Accountant Member Bangalore. Dated: 16.07.2026. /NS/*

Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order

Assistant Registrar, ITAT, Bangalore.

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