BASALINGAPPA,GULBARGA vs. INCOME TAX OFFICER, WARD-1 , YADGIR

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 7.10.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1081526583(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2015-16.

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3.1 We have heard both the parties on admission of additional grounds. The Lucknow bench of the Hon’ble Allahabad High Court in the case of CIT Vs. Sahara India (2012) 347 ITR 331 held that a legal issue can be raised at any stage but there shall be good reason for admitting the additional ground. In our Opinion all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above grounds.

ITA No.2860/Bang/2025 Basalingappa, Gulbarga Page 4 of 6 Further we are also of the opinion that the additional grounds raised in the present case are purely legal in nature & therefore these are critical for a fair adjudication of the matter. The Hon’ble Madras High Court in the case of CIT Vs Indian Bank (2015) 230 Taxman 635 (Madras) held that Rule 11 of the I.T. Rules makes it clear that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal.

3.2 Further, the Hon’ble Karnataka High Court in the case of Gundathur Thimmappa & Sons vs. CIT, Mysore, reported in (1968) 70 ITR 70 held that when the point raised by the assessee is a point which went to the root of the matter and affected not merely his liability to pay tax but also jurisdiction of the Tribunals and Authorities themselves to subject the amount concerned to tax, the Appellate Tribunal had the discretion to permit point of law to be raised for the first time in appeal because the question went to the root of the case. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 held that undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Accordingly, we are inclined to admit the additional legal grounds for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and these are critical for a fair adjudication of the matter.

ITA No.2860/Bang/2025 Basalingappa, Gulbarga Page 5 of 6 the assessee prayed that one more opportunity may be granted before the ld. CIT(A)/NFAC. The ld. D.R. although fairly conceded that assessee could not represent his case before the ld. CIT(A)/NFAC, however, submitted that some cost may be levied owing to the negligence shown by the assessee before the first appellate authority.

4.1 On perusal of the order of ld. CIT(A)/NFAC, we observed that the ld. CIT(A)/NFAC had provided 3 numbers of opportunities to the assessee to make his submission in support of the grounds of appeal, however, the assessee did not file any submissions/response before the ld. CIT(A)/NFAC. Before us, the ld. A.R. of the assessee submitted that there was miscommunication between the assessee and his ld. Counsel and for this reason the assessee could not represent his case. This being so, in the interest of justice, equity and fair play and as requested by the ld. A.R. of the assessee we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(A)/NFAC to decide afresh in accordance with law.

4.2 While remitting the matter to the file of ld. CIT(A)/NFAC, we also consider it necessary to impose a token cost of Rs.5,000/- to the assessee in aggregate owing to the negligence shown to the statutory notices before the first appellate authority. The assessee shall deposit the cost warranted in favour of Prime Minister Relief Fund and the receipt thereof shall be furnished before the ld. CIT(A)/NFAC. With these terms, the appeal of the assessee is restored to the file of ld. CIT(A)/NFAC for de-novo adjudication in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the relevant document/records/submissions/information in support of his claim. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.

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Order pronounced in the open court on 30th June, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 30th June, 2026. VG/SPS

Copy to:

Asst. Registrar, ITAT, Bangalore.