HARINATH REDDY DEVIREDDY,HYDERABAD vs. DCIT., CIRCLE 1(1), HYDERABAD

The learned Authorities below ought to have appreciated the fact that, the notice issued under section 148 of the Act is very vague and the learned assessing officer has not specified as regard to which limb he has issued the notice whether to assessee or reassess the income of the appellant and consequential proceeding becomes bad in law. 5. The learned Authorities below ought to have appreciated the fact that, if at all any reasons are recorded for re-opening of assessment amount by the learned assessing officer it may amount to reason to suspect and do not amount to reason to believe and the said reason do not constitute belief, under the facts and circumstances of the case. 6. The learned Authorities below ought to have appreciated the fact that no proper procedure has been followed by the learned assessing officer for issuance of notice under section 148 of the Act, as envisaged in the statute. 7. The appellant denies himself liable to assessed on a total income of Rs. 43,42,150/-, as against the income returned an amount being Rs. 2,12,150/- under the facts and circumstances of the case. 8. The learned Authorities below are not justified in making an addition of Rs. 41,30,000/-, undisclosed short term capital gain, under section 115BBE of the Act, under the facts and circumstances of the case. 9. The learned Authorities below are not justified in making an addition of Rs. 21,00,000/-, which is sale consideration received from sale of property, without reducing the cost of acquisition/improvement and expenses, under the facts and circumstances of the case. 10. The learned Authorities below are failed to appreciate the fact that the document no. 6175/2015 date of transaction 31/10/2012, does not belong to the Appellant, and addition of Rs. 20,30,000/-, is bad in law, under the facts and circumstances of the case. 11. The Appellant denies himself liable to be charged to interest under section 234A and 2348 of the Income-Tax Act, 1961, under the facts and circumstances of the case. 12. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.”

Succinctly stated, the assessee had filed his return of income for AY 2013-14 declaring an income of Rs.2,12,150/- along with agricultural income of Rs.3,26,980/- 4. The A.O. based on information that the assessee had though during the subject year sold two immovable properties for a consideration of Rs.41.30 lacs, viz., (i) vide registered sale deed dated 31-10-2012 (Document No.7438/2012) - for Rs.21 lacs; and (ii) vide registered sale deed dated 31-10-2012 (Document No.6175/2015) - for Rs.20.30 lacs; but had not disclosed the income arising on sale of the said properties in his return of income, initiated proceedings under Section 147 of the Act. Notice under Section 148 of the Act, dated 31-03-2021, was issued to the assessee which remained uncompiled with. Apart from that, the notices issued by the A.O. under Section 142(1) of the Act, dated 17-12-2021 and 11-02-2022, wherein the assessee was inter alia called upon to furnish details pertaining to the sale transaction of the subject properties, viz., date of acquisition of the property; cost of acquisition; cost of improvement, etc., were also not complied with by the assessee. As the assessee had failed to respond to the notices issued by the A.O., therefore, the latter was constrained to 5 ITA 321/Hyd/2025, ITA 1244/Hyd/2024 and ITA 1245/Hyd/2024 – Harinath Reddy Devireddy proceed with and frame the assessment to the best of his judgment u/s 144 of the Act. Accordingly, the A.O. vide his order passed under Section 147 read with Section 144 read with Section 144B of the Act, dated 24-03-2022 in the absence of details of the requisite details, viz. cost of acquisition and improvement pertaining to the subject property, held the entire amount of sale consideration of the subject properties aggregating to Rs.41.30 lacs (supra) as Short-Term Capital Gain (STCG) and made an addition of the same to the returned income of the assessee. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A). Although the appeal filed by the assessee involved a delay of 476 days, but the same in all fairness was condoned by the CIT(A). Apropos the merits of the case, the assessee had both assailed the validity of juri iction that was assumed by the A.O. for initiating proceedings under Section 147 of the Act as well as challenged the addition of Rs.41.30 lacs (supra) on merits. The CIT(A) did not find favour with the contention of the assessee as regards the validity of juri iction that was assumed by the A.O. for initiating proceedings under Section 147 of the Act and approved the same. Apropos the merits of the case, the assessee