JANARDHAN PRAMODH,RACHENAHALLI SRK POST, BANGALORE vs. INCOME TAX-WARD-4(2)(1), BMTC BUILDING, KORAMANGALA

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ITA 1374/BANG/2025Status: HeardITAT Bangalore18 May 2026AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that while the assessee did not respond to notices, principles of natural justice require that benefits available to the assessee be considered. The AO should have considered the cost of acquisition and selling expenses when computing capital gains.

What were the facts?

The assessee, a non-filer, failed to respond to notices from the AO regarding the purchase and sale of immovable property and rent received. The AO treated the entire sale consideration as short-term capital gains with nil cost of acquisition and the purchase as unexplained investment. The CIT(A) also dismissed the assessee's appeal due to non-response.

What were the issues?

Whether the AO correctly computed short-term capital gains without considering the cost of acquisition and selling expenses, and whether principles of natural justice were followed given the assessee's non-response.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 142(1),Section 144,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.

For Respondent: Shri Balusamy .N, JCIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE

BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA No. 1374/Bang/2025 Assessment Year : 2015-16

Shri Janardhan Pramodh, The Income Tax Rachenahalli SRK Post, Officer, Bangalore - 560 077. Ward – 4(2)(1), PAN: BZSPP5575R Bangalore. Vs. APPELLANT RESPONDENT

Assessee by : None

Revenue by : Shri Balusamy .N, JCIT-DR

Date of Hearing : 26-02-2026 Date of Pronouncement : 18-05-2026

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 10/07/2024 in respect of the A.Y. 2015-16.

2.

The brief facts of the case are that the assessee is an individual and not filed his return of income. Based on the information that the assessee had purchased an immovable property and also sold an immovable property, the revision proceedings has been initiated by issuing notice u/s.

Page 2 of 4 ITA No. 1374/Bang/2025 148A(b) of the Act. The assessee had not furnished any response to the said notice and therefore the order u/s. 148A(d) as well as notice u/s. 148 was issued to the assessee. Subsequently, notices u/s. 142(1) were issued in which the AO had sought for the details about the purchase of immovable property as well as the sale of immovable property. The assessee had received the said notices but no reply has been filed. Thereafter a show cause notice u/s. 144 was issued, even for the said notice, no reply has been filed by the assessee. Another show cause notice was issued proposing to levy the short term capital gains on the sale of immovable property and proposing to treat the purchase of the property as unexplained investment u/s. 69 of the Act. The AO had also proposed to treat the rent received as the income of the assessee. Since the assessee had not responded to the various notices, the AO had treated the entire sale consideration as short term capital gains by taking the cost of acquisition of the immovable property as Nil. Similarly, the purchase of property has been treated as unexplained investment u/s. 69 of the Act. The rent received by the assessee has been treated as income from other sources. As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had also sent four notices and the assessee had responded to one notice and sought for an adjournment. The Ld.CIT(A) having no other way had decided the appeal based on the materials available with him and dismissed the appeal.

3.

As against the said order, the present appeal has been filed by the assessee before this Tribunal.

4.

At the time of hearing, none appeared on behalf of the assessee even though the notices were duly served on the assessee. We, therefore decided to complete the appeal based on the records available before us and also based on the arguments made by the Ld.DR.

5.

The Ld.DR submitted that the assessee is a non-filer and also not responded to any of the notices issued by the AO as well as the Ld.CIT(A).

Page 3 of 4 ITA No. 1374/Bang/2025 6. The Ld.DR further submitted that even before this Tribunal, the assessee had not represented and therefore prayed to dismiss the appeal filed by the assessee.

7.

We have heard the arguments of the Ld.DR and perused the materials available before us.

8.

As seen from the assessment order, the AO had treated the entire sale consideration as a short term capital gains and taxed under the provisions of the Act. While computing the short term capital gains, the AO had not considered the cost of acquisition and other cost incurred in selling the property. No doubt, the assessee had not responded to the notices but the natural justice requires that the benefits available to the assessee has to be granted by one way or another. Having got the details of the sale of property, the AO could have addressed the Sub-Registrar and got the earlier documents to find out the cost of acquisition of the property and could have granted the deduction and thereafter could have estimated the short term capital gains. As per the provisions of the Act, the method of estimating the short term capital gain is not correct.

9.

Further, the AO had treated the purchase of the immovable property as unexplained investment u/s. 69A of the Act. In the present case, there are two events one the assessee had disposed of his immovable property and the other one is that the assessee had purchased an immovable property. Therefore there could be a chance for the assessee to invest the part of the sale consideration received from the sale of immovable property into the purchase of the new property. In that case, the purchase of the immovable property could not be treated as unexplained investment u/s. 69A of the Act. But unfortunately, the assessee had not appeared before any of the authorities and therefore the said assessment has been framed by the AO. In the grounds of appeal, the assessee had raised so many grounds including the deduction claimed u/s. 54F of the Act. Similarly, the assessee had also raised a plea that the AO could have referred this to the valuation

Page 4 of 4 ITA No. 1374/Bang/2025 officer as per section 55A of the Act for ascertaining the cost of acquisition of the immovable property. But no such exercise was done by the authority. Equally the assessee has also not discharged his duties by producing the details before the authorities. In such circumstances, and also to render justice, we are of the view that one more opportunity may be granted to the assessee to appear before the AO and explain the case before the AO. Considering the attitude of the assessee, we are inclined to impose a cost of Rs. 10,000/- on the assessee and the said cost should be deposited in the account of the Prime Minister’s National Relief Fund within a period of 90 days from the date of receipt of this order. If the assessee had not deposited the said cost amount within the stipulated time and produce the receipt to the AO, the benefit of remitting this issue to the AO should automatically go and the earlier orders of the authorities would revive automatically without any notice to this Tribunal.

10.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 18th May, 2026.

Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice President Judicial Member

Bangalore, Dated, the 18th May, 2026. /MS /

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

Assistant Registrar, ITAT, Bangalore

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