SANT TUKARAM MADHYAWARII GHAUKA VA KIRKOL SAHAKARI BHANDAR LTD.,MAHARASHTRA vs. INCOME TAX OFFICER, WARD-1 RATNAGIRI, MAHARASHTRA

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ITA 2789/PUN/2025Status: DisposedITAT Pune21 May 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file. The CIT(A) is directed to decide the appeal afresh after giving due opportunity of hearing to both parties, considering the assessee's challenge to the validity of the reassessment notice.

What were the facts?

The assessee, a cooperative society, failed to file its income tax return for AY 2018-19. The Assessing Officer (AO) reopened the case and made additions of Rs. 77,00,000/- under Section 50C and Rs. 40,49,322/- as long-term capital gain due to the assessee's failure to provide evidence for property sale consideration and cost of improvement.

What were the issues?

The key issues were the validity of the reassessment proceedings initiated by a notice allegedly not in accordance with the signature manual, and the merits of the additions made under Section 50C and for long-term capital gain due to lack of substantiating evidence.

Which sections of the Income-tax Act were involved?

Section 50C,Section 147,Section 148,Section 143(2),Section 142(1),Section 144B,Section 270A,Section 194IA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Respondent: Smt Saumya Pandey

आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER

आयकर अपील सं. / ITA No.2789/PUN/2025 धििाारण वर्ा / Assessment Year : 2018-19 Sant Tukaram Income Tax Officer, Madhyawari Ghauka Va Ward-1, Ratnagiri Vs. Kirkol Sahakari Bhandar Ltd., Pat Panhale Shringartali Guhagar, Ratnagiri- 415724 Maharashtra PAN-AAAJS2233D अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : None Department by : Smt Saumya Pandey Jain-Addl. CIT Date of hearing : 21-05-2026 Date of Pronouncement : 25-05-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 22.09.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2018-19.

2.

Although a number of grounds have been raised by the assessee, however all these grounds relate to the order of the Ld. CIT(A)/NFAC in sustaining the addition made by the Ld. Assessing

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Officer (“AO”) of Rs. 77,00,000/- u/s 50C of the Income Tax Act, 1961 (the “Act”) in respect of immovable property sold by the assessee during the A.Y. 2018-19 and Rs. 40,49,322/- towards long term capital gain (“LTCG”) rejecting the assessee’s claim of indexed cost of improvement. Apart from the aforesaid additions the assessee has also challenged the validity of the re-assessment proceedings by way of a legal ground raised before this Tribunal.

3.

The facts of the case are that the assesse is a Consumer Co- operative Society and engaged in the business of Retail Department Store for end-users with its Talawali, Guhagar branch. For A.Y. 2018- 19, the assessee did not file its return of income. Based on the specific information flagged through Insight Portal that the assessee has sold immovable property of an amount of Rs. 7,00,00,000/- and as per the TDS statement TDS of Rs. 1,35,00,000/- was paid /credited as per the provisions of section 194IA of the Act during the financial year 2017-18 relevant to A.Y. 2018-19, the case of the assesse was re-opened u/s 147 of the Act vide issue of notice u/s 148 of the Act dated 31.03.2022. Accordingly, statutory notice(s) u/s 143(2) and 142(1) and show cause notice were issued to the assessee in response to which the assessee filed certain details /documents. However, the reply of the assessee was not found to be satisfactory by the Ld. AO and he proceeded to complete the assessment determining the total income of the assessee at Rs. 1,17,49,322/- (comprising of Rs. 77,00,000/- u/s 50C and Rs. 40,49,322/- towards LTCG), vide his order dated 21.03.2023 passed u/s 147 r.w.s. 144B of the Act by drawing the following conclusion:-

4.6 Conclusion drawn

A In the instant case, the assessee has sold the property for a consideration of Rs.98,00,000/-, however on verification of the registered deed, the stamp valuation of the property is Rs.1,75,00,000/-, Here, the assessee has failed to report the correct value u/s.50C and thus by suppressed/misrepresented the fact of "deemed sale consideration" Therefore, the provisions of section

3 ITA No.2789/PUN/2025 50C of the I.T.Act is applicable in this case. The working of provisions of section 50C of the Act is as under:

Value of the property as per stamp valuation 1,75,00,000/-

Less : Sale consideration as per dead

98,00,000/-

Taxable U/s 50C of the I.T. Act

77,00,000/

Accordingly addition of Rs. 77,00,000/- under section 50C of I.T. Act initiated separately for under reporting of income. (Addition of Rs. 77,00,000/-)

B. The assessed has claimed indexation of cost of improvement made during F.Y. 2002-03 and F.Y. 2013-14. During the course of assessment proceedings, the assesse was asked to submit the details with supporting documentary evidences to prove its claim of cost of improvement made in various years, however, the assesses has not submitted any details in connection with cost of improvement. The onus upon the assessee to prove the genuinenous of the cost of improvement as claimed by the assesses during various years. In the instant case the assessee has not offered the correct working of capital gain along with supporting documentary evidences. The working at the long term Capital Gain is as under:-

Sale consideration shown by the nan

Rs. 98,00,000/-

Less Indexed cost of acquisition of the property

Rs. 57,50,678/-

Long Term Capital Gain

Rs. 40,49,322/-

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Accordingly, in absence of any evidences from the assessee an amount of Rs. 40,49,322/- is treated as Long term capital gain earned on transfer of immovable property and added to the total income of assesse. Penalty proceedings u/s 270A of the Act is initiated separately for under reporting of income.

(Addition (LTCG) of Rs.40,49,322/-)

4.

On appeal, the Ld. CIT(A)/NFAC dismissed the appeal of the assesse by observing as under:-

7.7 On perusal of the assessment order and the submission made by the appellant during the assessment and appellate proceedings. It is clearly established that the appellant failed to substantiate his claim that the provision of section 50C is not applicable in his case. The appellant has not furnished any documentary evidences or any supporting case laws. Mere claim does not help the cause of the appeal. Thus, it is clearly established that it is an afterthought of the appellant to put all blames on Assessing Authority by saying no proper opportunity was given to the appellant during the course of assessment proceedings, which shows that the will full attempt of the appellant to evade taxes. Mere claim without any legally valid documentary proof of any sort is not acceptable. Therefore, the AO has rightly invoked the provision of section 50C and made addition of Rs.77,00,000/- and Rs. 40,49,322/- under the held Long Term Capital gain. Hence, the ground raised by the appellant is dismissed.

5.

None appeared for and/or on behalf of the assessee when the matter was called for hearing on 21.05.2026. Even on the earlier two occasions when the matter was fixed for hearing on 13.01.2026 and 06.04.2026, neither anyone appeared nor any adjournment was sought for and /or on behalf of the assessee. The assessee has, however, filed written synopsis/submission requesting to decide the matter based on the written submission/synopsis.

6.

The Ld. Departmental Representative (DR) had no objection if the matter is decided based on the written submission filed by the assessee. From the perusal of the written submission filed by the

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assessee and the impugned order of the Ld. CIT(A)/NFAC, we find that the assessee apart from challenging the quantum addition made by the Ld. AO has also challenged the validity of notice u/s 148 of the Act dated 31.03.2022 by way of a legal ground raised before the Tribunal for the first time alleging that the notice is not per the signature manual or digital of the AO and it has been issued by JAO which is not a valid Authority to issue notice u/s 148 of the Act. On merits, it is the assessee’s submission that it had submitted all supporting evidence, however, its submission were either ignored or misunderstood by Ld. CIT(A)/NFAC.

7.

We find that the Ld. CIT(A)/NFAC has dismissed the appeal of the assessee for the reasons which we have reproduced in the preceding paragraphs. The Ld. CIT(A)/NFAC has confirmed the additions made by the Ld. AO for the reason that the assessee failed to substantiate its claim by furnishing any documentary evidence or supporting case laws. In this view of this matter and considering the totality of facts and in the circumstances of the case, we deem it fit, to set aside the impugned order of the Ld. CIT(A)/NFAC and restore the matter back to his file with a direction to decide the matter afresh as per fact and law after affording due opportunity of hearing to the parties. Needless to say, the assesse shall make necessary submissions as may be required/called upon on the appointed date, without seeking any adjournment under any pretext, unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass the appropriate order in accordance with law. We hold and direct accordingly. The grounds of appeal raised by the assesse are accordingly allowed for statistical purposes.

6 ITA No.2789/PUN/2025

8.

In the result the appeal of the assesse is treated as allowed for statistical purposes.

Order pronounced in the open court on 25th May, 2026.

Sd/- Sd/- (R.K. PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 25th May, 2026. Neeta आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, 5. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 6. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सह यक रदिस्ट्र र / Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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