ABDUL RAWOOFWASEEM UR REHMAN,AREHALLY POST vs. ITO WARD 1 & TPS, HASSAN

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ITA 1988/BANG/2025Status: DisposedITAT Bangalore18 June 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the AO did not refer the matter to the DVO for valuation and also failed to examine the existence of the constructed building. Therefore, the matter was remitted back to the AO for re-examination of the construction and the estimate provided by the assessee.

What were the facts?

The assessee, a non-filer, filed a return of income in response to a notice under section 148, claiming a deduction under section 54 for the construction of a residential house. The Assessing Officer made an addition of Rs. 45,13,141/- for lack of proper bills/vouchers and documentary evidence for construction. The CIT(A) upheld the AO's order.

What were the issues?

Whether the addition made by the AO for lack of proper bills/vouchers and documentary evidence for house construction is justified, and whether the valuation report from a chartered engineer is sufficient evidence for claiming deduction under section 54.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 148A(b),Section 143(2),Section 142(1),Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K

For Appellant: Shri. Ramesh BR, Retd. IRS
For Respondent: Shri. Manikandan S, Addl. CIT(DR)(ITAT), Bengaluru
Hearing: 02.06.2026Pronounced: 18.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER ITA No.1988/Bang/2025 Assessment Year : 2018-19 Shri. Abdul Rawoof Waseem Ur Rehman, Vs. ITO, S/o Abdulraof, Tholalu Road, Arehally Ward – 1 & TPS, Post, Hassan. Belur Taluq, Hassan District, Hassan – 573 101. PAN : AGXPV 6899 F APPELLANT RESPONDENT Assessee by : Shri. Ramesh BR, Retd. IRS Revenue by : Shri. Manikandan S, Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 02.06.2026 Date of Pronouncement : 18.06.2026 O R D E R Per Balakrishnan S, Accountant Member :

This appeal is filed by the assessee against the order of learned Commissioner of Income Tax – Appeals (NFAC, Delhi) [in short “CIT(A)”] vide DIN & order No. ITBA/NFAC/S/250/2025-26/1078450113(1) dated 14.07.2025 for the Assessment Year 2018-19 arising out of the order passed under section 147 r.w.s. 144 of the Income tax Act, 1961, dated 09.02.2023.

2.

Briefly stated facts of the case are assessee is a non-filer but has filed the return of income for the Assessment Year 2018-19 in response to notice under section 148 of the Act declaring a total income of Rs.4,96,350/- on 28.04.2022. The assessee was issued a show cause notice under section 148A(b) of the Act

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on 16.03.2022 for which assessee failed to respond. Therefore, the learned Assessing Officer [in short ‘AO’] passed an order under section 148A(d) of the Act on 31.03.2022 and issued notice under section 148 of the Act dated 31.03.2022. Thereafter, notices under section 143(2) and 142(1) of the Act were issued on various dates. Assessee submitted response to the above notices. Further, a show cause notice dated 17.01.2023 was issued and served on the assessee for which assessee furnished reply on 27.01.2023. Considering the replies furnished by the assessee, the learned AO not being satisfied since the assessee has not produced any proper bills / vouchers towards the expenses made against the construction of the house property and did not also provide documentary evidence in support of construction of new residential house which was claimed as deduction under section 54 of the Act, made an addition of Rs.45,13,141/-.

3.

On being aggrieved by the order of the learned AO, assessee filed appeal before the learned CIT(A). Similar submissions were made before the learned CIT(A). Therefore, the learned CIT(A) upheld the order of the learned AO by dismissing the appeal of the assessee.

4.

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

ITA No.1988/Bang/2025 Page 3 of 5

5.

The assessee has challenged the issuance of notice by the jurisdictional AO [in short ‘JAO’] instead of Faceless AO [in short ‘FAO’] and also the additions made by the learned AO amounting to Rs.45,13,141/-.

6.

The learned Authorized Representative [in short ‘AR’] submitted that assessee has produced a valuation certificate from HMS Constructions whereas the learned AO did not consider the same since the covering letter was unsigned. However, the estimate of the valuation of the property was signed by the chartered engineer. Further, he also submitted that the expenses are paid by cash and hence no proper bills and vouchers are collected for the purpose of

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construction of the house. He also referred to written submissions furnished before us wherein the valuation report was enclosed along with the signature of the chartered engineer. He also submitted that the photos of the house are also enclosed for reference as documentary evidences to prove that there exists building which was constructed for the purpose of claiming deduction under section 54 of the Act. He therefore pleaded that the additions made by the learned AO be deleted.

7.

Per contra, the learned Departmental Representative [in short ‘DR’] relied on the orders of the Revenue authorities and submitted that unsigned estimate for the construction of house could not be accepted as valid documentary evidence for the purpose of claiming deduction under section 54 of the Act. Further he also submitted that the photos of the house does not have geo-tag for identification. He therefore pleaded that the issue may be remitted to AO for examination of evidences.

8.

We have heard the rival submissions and perused the material available on record. It is an admitted fact that assessee has not filed the return of income, but has filed the return of income in response to notice under section 148 of the Act disclosing the capital gains. The contention of the assessee is that construction of the house property could not be established by producing vouchers / bills but valuation report of the chartered engineer has been submitted as documentary evidence to prove the fact that residential property has been constructed by the assessee for claiming deduction under section 54 of the Act. The learned AO disbelieved the estimate provided by the chartered engineer however failed to refer the matter to DVO for valuation of property constructed by the assessee. Further, the learned AO has also not examined the existence of the building constructed by the assessee which was claimed as deduction under section 54 of the Act. In these circumstances, we consider it

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fit to remit the matter to the file of the learned AO to examine construction and the estimate provided by the assessee towards cost of construction before allowing any deduction under section 54 of the Act. The assessee should be provided opportunity of being heard. Thus, the grounds raised by the assessee on merits are allowed for statistical purposes. The other grounds raised by the assessee regarding JAO/FAO are not adjudicated and are left open.

9.

In the result, appeal of the assessee is partly allowed for statistical purposes.

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

Sd/- Sd/- (SOUNDARARAJAN K) (BALAKRISHNAN S) Accountant Member Judicial Member Bangalore. Dated: 18.06.2026. /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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