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Facts
The assessee, Attur Muneerappa Krishnappa, appealed against an assessment where the AO added Rs. 70,00,000 as short-term capital gains from property sale, based on information that the assessee had not filed an ITR. The assessee contended that they *did* file the ITR for AY 2018-19, declaring capital gain on a sales consideration of Rs. 2,05,50,000, and that the assessment was made without proper opportunity of hearing or considering relevant deductions/exemptions.
Held
The Tribunal acknowledged the assessee's failure to submit documents to lower authorities but noted the claim of having filed the ITR with a higher declared capital gain. In the interest of justice, the Tribunal remitted the entire issue back to the Assessing Officer for fresh adjudication, directing the AO to provide a reasonable opportunity of hearing and requiring the assessee to produce all necessary supporting documents.
Key Issues
Whether the reassessment proceedings were validly initiated; whether the assessee was denied natural justice and proper opportunity of being heard; and the correct computation of capital gains, including actual sale consideration, cost of acquisition/improvement, and eligibility for exemptions.
Sections Cited
250, 147, 143(1), 148, 144, 48, 45, 54F, 54EC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
O R D E R
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 15.05.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1076229053(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.
The assessee has raised the following grounds of appeal:
Attur Muneerappa Krishnappa, Bangalore Page 4 of 6 3. Brief facts of the case are that as observed by the AO, the assessee did not file his return of income for the Asst. year 2018- 19. As per the specific information available with the Department, the assessee had received sale consideration on sale of immovable property amounting to Rs.70,00,000/-.During the course of assessment proceedings in response to notice u/s 148 of the Act the assessee did not file any return of Income. Further, the assessee was asked to furnish the detailed statement of capital gains arising out of the above transaction, computation of long or short term capital gains, copy of the sale deed, copy of the purchase deed, cost of acquisition/cost of improvement/expenditures incurred wholly and exclusively in connection with transfer of property, details of reinvestment made along with supporting evidences. In absence of any such details, the sum of Rs. 70,00,000/- was brought to tax under the head Income from short term capital gains. The AO accordingly concluded the assessment proceedings u/s 147 r.w.s. 144 of the Act on a total income of Rs.70,00,000/-.
Aggrieved by the order of AO passed u/s 147 r.w.s. 144 of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
The ld. CIT(A)/NFAC dismissed the appeal of the assessee on the ground that in spite of issuing several notices, the assessee neither filed any written submission nor submit the requisite evidences either before the AO or during the course of the Appellate Proceedings. Since there was no submission/evidence available on record relating to merit and in support of the grounds of appeal
as well as statement of facts, the ld. ld. CIT(A)/NFAC held that the AO was right in adding the sum of Rs.70,00,000/- as short term capital gain.
6. Again aggrieved by the order of the ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal.
7. Before us the ld. AR of the assessee vehemently submitted that the AO had wrongly observed that the assessee had not filed his return of Income. In fact the assessee had filed his return for the Asst. year 2018-19 by declaring the capital Gain on sale of such alleged immovable property. The AR of the assessee further submitted that in fact the assessee had declared sales consideration of Rs.2,05,50,000/- through proper banking channels whereas the AO is merely alleging to have received only Rs.70,00,000/- and accordingly prayed that the addition may be deleted.
The ld. D.R. on the other hand supported the order of the Authorities below.
We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee could not produce the details such as statement of capital gains arising out of the above transaction, computation of long or short term capital gains, copy of the sale deed, copy of the purchase deed, cost of acquisition/cost of improvement/expenditures incurred wholly and exclusively in connection with transfer of property, details of reinvestment made along with supporting evidences along with the bank statements as required by the AO. Further, on going through the order of ld. CIT(A)/NFAC, we also take a note of the fact that even during the appellate proceedings, despite issuing several notices, the assessee did not respond to any of the notices. The ld. CIT(A)/NFAC, accordingly held that since there was no submission/evidence available on record relating to merit and in support of the grounds of appeal as well as statement of facts, the ld. ld. CIT(A)/NFAC was of the view that the AO was right in adding the sum of Rs.70,00,000/- as short term capital Attur Muneerappa Krishnappa, Bangalore Page 6 of 6 gain. Before us, the ld. AR of the assessee submitted that in fact the assessee had filed his return for the Asst. year 2018-19 by declaring the capital Gain on sale of such alleged immovable property. This being so, in the interest of justice & fair play, we deem it fit and proper to remit the entire issue in dispute to the file of AO to decide afresh in accordance with law. Needless to say, a reasonable opportunity of hearing must be granted to the assessee. The assessee is also directed to produce all the necessary documents/records/ accounts/statements in support of his claim and should not take unnecessary adjournments. We make it clear that in case of further default the assessee shall not be entitled to any leniency. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 26th Sept, 2025