MAHIDHARA PROJECTS PRIVATE LIMITED,HYDERABAD vs. DCIT, CENTRAL CIRCLE-2(1), HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad �ी रवीश सूद, माननीय �या�यक सद�य एवं �ी मधुसूदन साव�डया, माननीय लेखा सद�य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A. No.1690/Hyd/2025 (�नधा�रणवष�/ Assessment Year:2017-18) Mahidhara Projects Private VS. DCIT, Limited, Central Circle-2(1), Hyderabad. Hyderabad. PAN: AAFCM1152K (अपीलाथ�/ Appellant) (��यथ�/ Respondent)

आयकरअपीलसं./I.T.A. No.1691/Hyd/2025 (�नधा�रणवष�/ Assessment Year: 2018-19) Mahidhara Projects Private VS. DCIT, Limited, Central Circle-2(1), Hyderabad. Hyderabad. PAN: AAFCM1152K (अपीलाथ�/ Appellant) (��यथ�/ Respondent) करदाताका��त�न�ध�व/ : Shri Mohd Afzal, Advocate Assessee Represented by राज�वका��त�न�ध�व/ : Ms Uppaluri Meena, Sr-AR Department Represented by सुनवाईसमा�तहोनेक��त�थ/ : 11/06/2026 Date of Conclusion of Hearing घोषणा क� तार�ख/ : 17/06/2026 Date of Pronouncement

2 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT ORDER PER RAVISH SOOD, JM: The present appeals filed by the assessee company are directed against the respective orders passed by the Commissioner of Income Tax (Appeals)-12, Hyderabad (for short, “CIT(A)”), dated 26/08/2025, which in turn arises from the respective orders passed by the Assessing Officer (for short, “AO”) under section 143(3) of the Income Tax Act, 1961 (for short, “the Act”), dated 29/12/2019 and under section 270A of the Act dated 08/02/2022, respectively. As the issues involved in these appeals are interlinked and interwoven, the same are being disposed of vide a consolidated order. We shall first take up the quantum appeal, i.e., ITA No.1690/Hyd/2025, wherein the assessee company has assailed the impugned order of the CIT(A) on the following grounds of appeal:

“1. The order of the learned Commissioner of Income Tax (Appeals) is against the law, weight of evidence and probabilities of case. 2. The learned Commissioner ought to have appreciated that the assessee opted not to communicate by email, therefore, learned Commissioner erred in issuing notices by email and further erred in confirming the order the Assessing Officer, wherein, an addition of Rs. 1,36,22,484/-. 3. The learned Commissioner erred in confirming the addition of Rs. 1,07,65,938/- out of aggregate development expenditure of Rs.8,97,16,154/- without rejecting the books of accounts u/s 145 of the IT Act. 4. The learned Commissioner ought to have appreciated that the assessee is to deal with an unorganized sector while incurring the development expenditure of Rs.8,97,16,154/-, therefore, erred in disallowing an amount of Rs. 1,07,65,938/-.

3 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT 5. The learned Commissioner erred in confirming the disallowance of Rs.5,76,786/- being amount of employees contribution to PF and ESI without appreciating the facts the payments were deposited before filing of the return of income. 6. The learned Commissioner erred in confirming the disallowance of Rs.22,79,760/- u/s 40(a)(ia) of the IT Act. 7. The learned Commissioner ought to have accorded one more opportunity by issuing the notice u/s 250 manually, therefore, erred in confirming the addition of Rs.1,36,22,484/-. 8. The learned Commissioner erred in confirming the order of the Assessing Officer wherein, disallowance u/s 14A amounting to Rs.2,00,000/- is made. 9. The appellant craves leave to add to, amend OR modify the above grounds of appeal either before OR at the time of hearing of the appeal, if it is considered necessary.” 2. Succinctly stated, the assessee company, which is engaged in the business of real estate, had filed its return of income for AY 2017-18 on 18/12/2017, declaring an income of Rs.1,20,54,090/- under normal provisions and “book profit” under section 115JB of the Act of Rs.62,40,156/-. Subsequently, the assessee company's case was selected for scrutiny under section 143(2) of the Act.

4 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT 40(a)(ia) of the Act: Rs.22,79,760/-; and (iv) disallowance under section 14A of the Act: Rs. 2 lakhs. 4. Aggrieved, the assessee company carried the matter in appeal before the CIT(A). However, as the assessee company/appellant, despite having been afforded sufficient opportunity, failed to participate in the appellate proceedings, the CIT(A) dismissed the appeal both on account of non-prosecution and on merits.

5 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT revealed that the assessee company had opted out of receiving notices/communications by email and, at Sl. No 17 had specifically provided the address to which the notices may be sent. The Ld. AR fairly submitted that, except for one occasion, i.e., 30/07/2025, wherein the hearing of the appeal was fixed on 18/08/2025, on neither of the remaining occasions any notice as per the mode requested by the assessee company was served upon it, as a consequence thereof, it had failed to effectively participate in the appellate proceedings and put forth its case. The Ld. AR submitted that as the assessee company had remained divested of a sufficient opportunity to put forth its case and assail the impugned additions/disallowances made by the AO, the matter, in all fairness and in the interest of justice, should be set aside.

6 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT to support the aforesaid claim of deduction of expenses would be placed on record. 9. Apropos the disallowance of the delayed deposit of the employee’s share of contribution of ESI/PF of Rs.5,76,786/- made by the AO under section 36(1)(va) r.w.s 2(24)(x) of the Act, the Ld. AR fairly submitted that the said issue as on date is squarely covered by the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. Commissioner of Income Tax-I (2022) 448 ITR 518 (SC). Coming to the disallowance under Section 40(a)(ia) of the Act of the interest expenditure of Rs.22,79,760/- (30% of Rs.75,99,199/-) that was paid by the assessee company to NBFCs, the Ld. AR submitted that as the respective payees had paid the tax on the aforesaid interest in their respective hands and the certificates in Form-26A evidencing the said fact are available with the assessee, therefore, in case the matter is set aside to the file of the AO, the same shall be filed before him. Apropos the disallowance made by the AO under section 14A of the Act of Rs.2 lakhs, the Ld. AR submitted that, as the assessee company had not earned any exempt income during the subject year, no disallowance under section 14A was called for in its case.

7 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT participate in the proceedings before the CIT(A), the latter had rightly dismissed the appeal. 11. We have given thoughtful consideration to the facts involved in the present appeal in the backdrop of the contentions advanced by the Learned Authorised Representatives of both parties.

8 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT span, i.e., on 26/08/2025. In our view, the assessee company, in the absence of valid service of notices intimating the fixation of the hearing of the appeal, was not afforded a sufficient opportunity in the proceedings before the First Appellate Authority, despite no fault on its part.

ITA No.1691/Hyd/2025 AY: 2018-19

9 ITA No.1690 & 1691/Hyd/2025 Mahidhara Projects Private Limited vs. DCIT set-aside to the file of the CIT(A) who is directed to dispose of the same after deciding the quantum appeal.

Order pronounced in the open court on 17th June, 2026. S S Sd/- d/- (मधुसूदन साव�डया) (रवीश सूद) (MADHUSUDAN SAWDIA) (RAVISH SOOD) लेखासद�य/ACCOUNTANT MEMBER �या�यकसद�य/JUDICIAL MEMBER d/ Hyderabad, dated 17/06/2026. **OKK/sps आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to:- 1. �नधा�रती/The : MAHIDHARA PROJECTS PRIVATE LIMITED Plot No.15, Shilpi Enclave Madhapur, Hyderabad Assessee Telangana-500081 2. राज�व/ The Revenue : DCIT, CC-2(1) Aayakar Bhavan, Hyderabad, Telangana-500001 3. The Principal Commissioner of Income Tax, Central Circle, Hyderabad. 4. �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण /DR,ITAT, Hyderabad. 5. The Commissioner of Income Tax 6. गाड�फ़ाईल / Guard file आदेशानुसार / BY ORDER KAMALA KUMAR Digitally signed by KAMALA KUMAR ORUGANTI ORUGANTI Date: 2026.06.17 15:34:41 +05'30' Sr. Private Secretary ITAT, Hyderabad.