CHANNE GOWDA,BENGALURU vs. INCOME TAX OFFICER, WARD-6(2)(1), BANGALORE

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ITA 2720/BANG/2025Status: DisposedITAT Bangalore18 May 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and restored the matter to the CIT(A). The CIT(A) was directed to issue fresh notices to the correct email address and decide the appeal on merits after providing a reasonable opportunity of hearing.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-appearance on multiple occasions. The assessee claimed the notices were sent to incorrect email addresses and were not received. The original assessment involved additions for unexplained cash deposits and denial of deduction under Section 54F.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-appearance without ensuring proper service of notices, and whether the additions and denial of deduction were justified.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 44AD,Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.

For Appellant: Shri Narendra Sharma, Advocate, Shri Balusamy N – JCIT

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 2720/Bang/2025 Assessment Year:2017-18

Shri Channe Gowda, Old No. 98, New No. 114, The Income Tax Officer, Karekallu, Kamakshipalya, Ward – 6(2)(1), Vs. Bengaluru – 560 079. Bengaluru. PAN: AIDPG4313P APPELLANT RESPONDENT

Assessee by : Shri Narendra Sharma, Advocate : Shri Balusamy N – JCIT Revenue by

Date of Hearing : 24-02-2026 Date of Pronouncement : 18-05-2026

ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1. ITA No. 2720/Bang/2025 for Assessment Year 2017-18 is filed by Shri Channe Gowda against the Appellate Order passed by the National Faceless Appeal Centre, Delhi dated 07.08.2025 wherein the Appeal filed by the Assessee against the Assessment order passed u/s. 143(3) of the Income Tax Act, 1961 dated 19.12.2019 passed by the Income Tax Officer, Ward – 6(2)(1), Bengaluru (the Ld. Assessing Officer) was dismissed as on 4 occasions notices were issued to the Assessee which did not get any response and accordingly the Appeal of the Assessee was dismissed. The Ld. CIT(A) further stated that in absence of any further information furnished by the Assessee to satisfy the Appellate Authority the merits of the case are also not required to be interfered.

ITA No. 2720/Bang/2025 Page 2 of 5 2. Before us, the Appeal was filed late by 26 days as the Appellate Order was received by the Assessee on 07.08.2025 wherein the Appeal filed on 26.11.2025 thereby causing a delay of 26 days. For this, the Assessee submitted affidavit as well as an application for condonation of delay. The claim of the Assessee that he did not check the e-filing portal regularly and was not aware of the Appellate Order passed until the month of September, 2025 when he received a notice on 08.09.2025 for recovery of the disputed demand from the Ld. Assessing Officer. On receipt of such notice, he contacted the Authorized Representative and consequently the Appeal was to be filed. Subsequently, the Chartered Accountant of the Assessee directed to file an Appeal before the ITAT, he has to contact another practitioner who was contacted and immediately the Appeal was filed. Thus, it caused a delay of 26 days.

3.

On hearing from both the parties, we find that delay is nominal and is for sufficient cause and hence the Appeal of the Assessee is admitted.

4.

The fact of the case shows that Assessee is an individual engaged in the business of executing contracts reported his income on presumptive basis u/s. 44AD of the Act. The case of the Assessee was selected for scrutiny for verifying the cash deposit during demonetization period. The notice u/s. 142(1) was issued. The Assessee was found to have deposited Rs. 53,00,000/-. The Assessee explained the same by submitting partition deed, sale deed copy, agreement and certified deed copy along with the bank statement. But the Ld. Assessing Officer held that Assessee has not explained the cash deposit of Rs. 53,00,000/-. Further with respect to the deduction or exemption from capital gain, it was found that Assessee has claimed exemption u/s. 54 of Rs. 1,60,00,000/-. It was stated that Assessee has not fulfilled the provisions of that section. The Assessee submitted that he has entered into an agreement on 02.10.2016 wherein it was stated that due to difference in the family members of the purchaser it was conveyed that immediately after the execution of the sale deed, it was agreed that the seller would convey the scheduled property back to the Assessee. The Ld. Assessing Officer issued notice u/s. 133(6) being buyer of the property

ITA No. 2720/Bang/2025 Page 3 of 5 whodenied the transaction. After verification of the information and in absence of any documentary evidence, the Ld. Assessing Officer noted that proof of cash deposit is available only for Rs. 5,00,000/- and balance cash deposit of Rs. 48,00,000/- out of Rs. 53,00,000/- remains unexplained. Thus, the net addition of Rs. 48,00,000/- is made to the returned income of the Assessee of Rs. 10,69,570/- by an Assessment Order dated 19.12.2019 and also denying the exemption claimed u/s. 54F of Rs. 1,60,00,000/-. Thus, total income of the Assessee was computed at Rs. 2,18,69,570/-.

5.

Aggrieved with the same, the Assessee preferred an Appeal before the Ld. CIT(A). However, on 4 occasions, none appeared before the Ld. CIT(A) and therefore the Appeal of the Assessee was dismissed.

6.

The Ld. Authorized Representative stated that as per form no. 35 it was stated that all the notices were sent to one puttaswamyandcompany@gmail.com and copy was marked to nh.associates12345@gmail.com and therefore none of the notices were received by the Assessee. It was submitted that even the notices sent to the nh.associates12345@gmail.com is also not the email address of the Assessee and therefore the Assessee could not remain present before the Ld. CIT(A). It was further stated that the notices were also sent in the span of 3 months and thus Assessee could not remain present or respond to such notices. It was otherwise submitted that in the statement of facts, the Assessee has narrated the complete facts. Even those facts are not considered by Ld. CIT(A). He referred to the statement of facts exhaustively.

7.

The Ld. Departmental Representative submitted that the Assessee did not remain present before the Ld. CIT(A) on all the 4 notices despite being served and the Assessee were not responded to and therefore the statement of facts now carried upon by the Ld. Authorized Representative could not be attended to. He submitted that the Assessee must be delegated to the file of the Ld. CIT(A). 8. We have carefully considered the rival contentions and perused the orders of the Ld. lower authorities. In this case, the addition is made to the extent of Rs.

ITA No. 2720/Bang/2025 Page 4 of 5 48,00,000/- on account of cash deposit and further the deduction claim of Rs. 1,60,00,000/- u/s. 54F of the Act is also denied. The claim of the Assessee is that Assessee has executed a sale deed on 02.09.2016 in respect of a factory shed in favour of Shri Manoj Kumar for a sale consideration of Rs. 1,60,00,000/- out of which a sum of Rs. 5,00,000/- was received in cash which was deposited into the bank account and thus out of the total deposit of Rs. 53,00,000/- the Ld. Assessing Officer accepted Rs. 5,00,000/- as explained. A further sum of Rs. 1,05,00,000/- was received through DD and a cheque of Rs. 50,00,000/-. As the impugned property was received by the Assessee as per partition deed dated 20.11.2015 from the father of the Assessee the impugned property belonged to the joint family. After the sale deed dated 02.10.2016, serious disputes arose and the Assessee immediately repaid Rs. 1,00,00,000/- to the buyer of the property. It is further stated that the buyer agreed to cancel the sale deed on receipt of the entire sale consideration of Rs. 1,60,00,000/- out of which Rs. 1,00,00,000/- was already paid on 02.10.2016. The claim of the Assessee u/s. 54 of the Act also becomes redundant in view of the cancellation of the said agreement as all these issues have not been discussed by Ld. First Appellate Authority, the notices were also sent to puttaswamyandcompany@gmail.com, Thus, in fact assessee did not receive the notices for hearing of appeal. Therefore we restore the whole Appeal back to the file of the Ld. CIT(A) with a direction to the Assessee to respond to the Appeal before the Ld. CIT(A). The Ld. CIT(A) is also directed to issue notices at channegow1981@gmail.com which is the address of the Assessee submitted in form no. 36. The Assessee is also directed to intimate the same with the respective authorities change in email in accordance with the law. Assessee is directed to avail the opportunity of hearing, submit necessary details to the ld. CIT (A) may decide the issue on merits of the case, after affording reasonable opportunity of hearing.

ITA No. 2720/Bang/2025 Page 5 of 5

9.

The Appeal of the Assessee is allowed for statistical purposes.

Order pronounced in the open court on 18th May, 2026.

Sd/- Sd/- (SOUNDARARAJAN K.) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 18th May, 2026. *TNTS* Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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