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Facts
A search under Section 132 of the Income Tax Act was conducted in the premises of a third party, Mr. J Boopesh Reddy, leading to the discovery of documents pertaining to the assessee. The Assessing Officer (AO) issued notices under Section 153C and 142(1) to the assessee, who had not filed any return of income. The AO proposed to tax capital gains based on a Joint Development Agreement, and after referring the matter to the District Valuation Officer (DVO), made additions to the assessee's income for multiple assessment years.
Held
The Commissioner of Income Tax (Appeals) (CIT(A)) noted that the AO had passed orders under Section 144 without giving the assessee a proper opportunity of hearing. Finding sufficient cause for the assessee's failure to provide details and deeming the explanation bonafide, the CIT(A) restored the appeals to the AO for fresh consideration, allowing the assessee an opportunity to represent their case. The Tribunal found no infirmity in the CIT(A)'s order.
Key Issues
Whether the assessment orders were bad in law and time-barred due to lack of opportunity of hearing, and if the CIT(A)'s order restoring the appeals to the AO was justified.
Sections Cited
132, 153C, 142(1), 142A, 144, 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCHES “B,”BANGALORE
Before: Shri Prashant Maharishi, Hon’ble & Shri Soundararajan K, Hon’ble
O R D E R
Per Prashant Maharishi, Vice President:
Captioned appeals are filed by Sri Nekkundi Srinivasa Reddy Keshava Reddy against the consolidated order passed by Commissioner of Income Tax (Appeals)-15, Bengaluru (“the Ld.CIT(A)”) for the A.Ys. 2013-14 to 2016-17 dated 20.12.2024 on identical facts and circumstances. We first state facts for the A.Y.2013- 14.
The brief facts of the case shows that, assessee is an individual who has not filed any return of income. A search under section 132 of the Act was carried out in 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy the case of Mr. J Boopesh Reddy on 09.0.2017 at Bangalore wherein certain documents pertaining to the assessee were found. During assessment proceedings of Mr. J Boopesh Reddy, the Ld.AO of Mr. J Boopesh Reddy recorded a satisfaction that these documents pertain to the assessee and therefore seized documents were sent to the Ld. AO of this appellant. . Accordingly, after recording the satisfaction, notice under section 153C of the Act was issued on06.08.2019 and subsequently notice under section 142(1) was issued and served.
The issue was determination of the capital gain and therefore the assessee was asked to prove the computation of capital gain. The Ld. AO was also furnished the valuation report. Accordingly, the Ld. AO to verify the claim of the assessee referred the matter to the District Valuation Officer (“DVO”) under section 142A of the Act on 14.06.2021 who submitted the valuation report on 26.10.2021. It was also the report of the DVO that assessee has not provided any information or details with respect to the property. The notices under section 142(1) of the Act were also issued to the assessee, however the assessee was
The Ld. AO issued a show cause notice that Short Term Capital Gain of Rs.69,75,248/- and Long Term Capital Gain of Rs.75,42,333/- were proposed to be taxed in the hands of the assessee based on the Joint Development Agreement entered into with M/s. SJR Enterprises dated 30.12.2010. In the end, the assessee submitted its response on 16.12.2021 wherein it was stated that the assessee along with his family members have received a total of 36 flats towards his share of land. However, he has surrendered 28 flats to the builders and received advance as per supplementary agreement. It was further stated that he has paid the tax on capital gain in the assessment year 2012-13.
The Ld. AO rejected the contentions and made addition of Rs.1,45,17,581/- by assessment order dated 24.12.2021 passed under section 153C r.w.s. 144 of the Act.
Identically, the order for the A.Y. 2014-15 was passed on 24.12.2021 wherein total capital gain of 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy Rs.3,32,93,220/- was assessed. For the A.Y. 2015-16 as per order under section 153C r.w.s. 144 of the Act dated 24.12.2021 the assessment to the extent of Rs.10,03,66,918/- was made taxing the above sum of Long Term Capital Gains.
For the A.Y. 2016-17, the assessment order under section 153C r.w.s. 144 of the Act was passed on 24.12.2021 determining the Long Term Capital Gain of Rs.6,29,50,400/- along with income from house property of Rs.4,97,000 and income from other sources at Rs.1,56,504/-, the total income was determined at Rs.6,34,43,904/-.
Against all these four assessment orders, assessee preferred appeal before Ld.CIT(A). The Ld.CIT(A) in terms of amendment to section 251 of the Act by the Finance(No.2) Act, 2024 restored all the appeals back to the file of Ld.AO for fresh consideration as per law and allowed the appeal of the assessee for statistical purposes.
The assessee is still aggrieved and is in appeal before us raising the ground that the assessment order is bad in law and time barred.
The Ld. Departmental Representative vehemently stated that this issue has been restored back to the file of Ld. AO by the Ld.CIT(A) as the orders were passed under section 144 of the Act and without giving proper opportunity of hearing to the assessee, therefore assessee should not have grievance, appeals could not have been filed.
We found that Ld.CIT(A) in Paragraph No. 5.1 has categorically noted that there was a sufficient cause which prevented the appellant from filing the details before the Ld. AO during the assessment proceedings. He also agreed that the explanation given by the assessee for not representing the case and not filing the details as bonafide. Therefore, he held that in the interest of justice and fair play an opportunity should be given to the appellant to represent his case with necessary documents before the Ld. AO. Accordingly, he restored the issue back to the file of Ld. AO for fresh consideration as per law after giving the assessee an opportunity of hearing.
We find there is no infirmity in the order of the Ld.CIT(A) when all issues are left open to be contested before Ld. AO, the 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy grievance of the assessee is unfound. Accordingly, we see no merit in all these four appeals filed by the assessee.
In the result, appeals of the assessee are dismissed.
Order pronounced in the open court on 30th July 2025.