INCOME TAX OFFICER, WARD-6(1)(1), BENGALURU, BMTC BUILDING, KORAMANGALA, BENGALURU vs. SHUBHANKAR ESTATES PRIVATE LIMITED, BANGALORE, LALBAGH ROAD

ITA 1917/BANG/2024Status: DisposedITAT Bangalore19 December 2025Bench: SHRI WASEEM AHMED (Accountant Member), SHRI KESHAV DUBEY (Judicial Member)11 pages
AI SummaryDismissed

What did the Tribunal hold?

The ITAT dismissed the revenue's appeal, upholding the CIT(A)'s order. The Tribunal specifically noted that the revenue failed to challenge the CIT(A)'s legal finding that the assessment was invalid due to the AO's breach of CBDT Instruction No. 20/2015, which mandates a prior show-cause notice before making additions. Since CBDT instructions are binding on the AO, the assessment framed in contravention was liable to be quashed, rendering the revenue's appeal infructuous.

What were the facts?

The assessee, Shubhankar Estates Pvt. Ltd., received Rs.3,31,11,000/- as share capital and premium from four investor companies for the assessment year 2016-17. The Assessing Officer added Rs.2,65,82,400/- under Section 68, deeming it unexplained cash credit due to doubts about the genuineness and creditworthiness of the investors. The CIT(A) deleted this addition on merits, finding investors to be genuine, and additionally quashed the entire assessment for non-issuance of a prior show-cause notice, violating CBDT Instruction No. 20/2015. The revenue appealed to the ITAT against the CIT(A)'s order.

What were the issues?

Whether the addition under Section 68 of the Income Tax Act for share capital was justified; Whether the assessment framed under Section 143(3) was valid given the AO's failure to issue a prior show-cause notice as mandated by CBDT Instruction No. 20/2015.

Which sections of the Income-tax Act were involved?

Section 68,Section 131,Section 131(1)(d),Section 133(6),Section 142(1),Section 143(2),Section 143(3),Section 250

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Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

Hearing: 24.09.2025Pronounced: 19.12.2025

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the revenue is directed against the order of the ld. CIT(A)/NFAC dated 29.07.2024 vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1067101052(1) for the assessment year 2016-17 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).

2.

The assessee has raised the following grounds of appeal:

1.

Whether in the facts and circumstances of the case, the ld. CIT is right in law in deleting addition made u/s 68 of the Act without appreciating that the Assessing Officer had done necessary enquiries by issuing commission u/s 131(1)(d) of the Act?

2.

Whether in the fact

The order continues below.

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