ABDUL MANNAN,HYDERABAD vs. INCOME TAX OFFICER, WARD-7(3), HYDERABAD

Brief facts of the case are that the assessee is an individual and had sold a commercial property situated at Door No.19-2-317/D/11/A, New Mallepally, Hyderabad vide document No.3877 of 2009 on 3.12.2009 for a consideration of Rs.8,25,000/-. The AO noticed that the SRO value of the property was Rs.10,24,900/-. Since the assessee had not filed the return of income reflecting the above transaction and offering the capital gain derived therefrom, the case was reopened u/s 147 of the Act. Since the assessee did not appear and did not file any details, the assessment was completed u/s 144 by adopting the SRO value of Rs.10,24,900/- as the sale consideration u/s 50C of the I.T. Act and the capital gains was brought to tax. Aggrieved, the assessee Page 1 of 3

The learned Counsel for the assessee prayed that the issue of validity of reopening also may be set aside to the file of the AO for reconsideration.

The learned DR however, opposed the remand to the AO.

Having regard to the rival contentions and the material on record, I find that the assessment was completed ex-parte u/s 144 by the AO and even before the CIT (A), none appeared for the assessee. The CIT (A) has confirmed the validity of the notice u/s 148. Since he has already set aside the issue on merits to the file of the AO, I am of the opinion that the CIT (A) ought to have remanded the issue of validity of the notice u/s 148 also to the file of the AO. In view of the same, I am inclined to set aside the order of the CIT (A) and remand the issue to the file of the AO for reconsideration of the issue both on the validity of the re- assessment proceedings as well as merits of the additions u/s 50C afresh.

In the result, assessee’s appeal is treated as allowed for statistical purposes.