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Facts
The assessee filed a return for AY 2014-15, which was reopened under Section 147 as income had allegedly escaped assessment due to sale deeds executed with a difference between consideration and chargeable value. The AO made an addition under Section 56(2)(vii)(b) of the Income Tax Act. The CIT(A) dismissed the appeal for non-prosecution after the assessee failed to respond to notices.
Held
The Tribunal noted that the issue was covered in favor of the assessee by a previous ITAT decision in a similar case. Both parties agreed that the matter should be set aside to the CIT(A) to provide the assessee with an opportunity to explain their case and consider the relevant case law.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits, and whether the addition under Section 56(2)(vii)(b) was justified given the assessee's submission of acting as a GPA holder for a sale conducted by the original owner.
Sections Cited
147, 148, 142(1), 144B, 56(2)(vii)(b), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH : HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the assessee against the order dated 29.10.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi, relating to the assessment year 2014-2015.
At the very outset, delay of 01 day in filing the appeal before the Tribunal is condoned in light of assessee’s
2 ITA.No.5/Hyd/2025 submissions before the Tribunal during the course of hearing and the appeal is admitted for adjudication.
The assessee has raised the following grounds in the instant appeal :
1. “The order of the learned CIT (A) is erroneous both on facts and in law 2. The learned CIT (A) erred in deciding the appeal ex- parte without providing proper opportunity to the appellant therein; 3. That the Ld. CIT(A) erred in law and facts in dismissing the appeal merely on the ground of non-appearance without considering the merits of the case, 4. That the Ld. CIT(A) erred in not considering the appellant's contention regarding the invalidity of reassessment proceedings under section 147 of the Act; 5. That the Ld. CIT(A) erred failed to apricate the fact that the issue of section 56(2)(vii)(b) of the Income Tax Act will not be applicable to the appellant and facts of the case. 6. That the Ld. CIT(A) erred in upholding the addition made by the A.O of Rs. 94,87,670/- without considering the evidences filed by the appellant and without proving an opportunity of being heard. 7. The appellant craves leave to add, alter, amend, modify or withdraw any of the grounds of appeal either before or during the hearing the appeal.”
3 ITA.No.5/Hyd/2025 4. The brief facts of the case are that the assessee is an individual and filed his return of income for the A.Y.2014-15 on 21.10.2014, declaring total income of Rs.18,18,180/-. The case has been subsequently reopened u/sec.147 of the Income tax Act, 1961 [in short "the Act"], 1961, for the reasons recorded, as per which, the income chargeable to tax had escaped assessment. As per the Assessing Officer, the appellant during the previous year, relevant to the A.Y.2014-15 executed sale deeds in document Nos.694/2014 and 695/2014 dated 24.02.2014 for various plots with SRO, Shameerpet, Hyderabad for a total consideration of Rs.17,89,330/-, whereas, the chargeable value of the said properties are at Rs.1,12,77,000/-. Hence, the difference amount of Rs.94,87,670/- has escaped assessment. Accordingly, a notice u/s 148 of the Act was issued and served on the assessee on 30.03.2021. In response, the assessee filed return of income on 07.04.2021, admitting total income of Rs.18,18,180/-. The case was selected for scrutiny and notice u/sec.142(1) of the Act dated 12.12.2021 was issued
4 ITA.No.5/Hyd/2025 and called upon the assessee to furnish certain information, with regard to sale deeds executed on 24.02.2014. Since the assessee has not responded to the notice u/sec.142(1) of the Act, the Assessing Officer completed the assessment u/sec.144B r.w.s.147 of the Act and determined total income at Rs.1,13,05,850/- by making addition of Rs.94,87,670/-towards the difference in value of property u/sec.56(2)(vii)(b) of the Act, 1961.
3. Being aggrieved, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the assessee challenged the additions made by the Assessing Officer towards difference in value of property u/sec.56(2)(vii)(b) of the Act and submitted that during the previous year, relevant to the assessment year under consideration, the assessee neither purchased nor sold any property and thus, the question of paying consideration as stated by the Assessing Officer and the difference in fair market value of the property as on the date of registration does not arise and, therefore, the question of invoking the provisions of sec.56(2)(vii)(b) of the Act does not arise. The Ld.CIT(A),
5 ITA.No.5/Hyd/2025 issued notices u/sec.250 of the Act on 24.09.2024, 04.10.2024 and 17.10.2024 calling the assessee to explain the contentions raised in the appeal filed before him. Since the assessee did not respond to the above notices nor filed any documentary evidence in support of his contention, the learned CIT(A) sustained the addition made by the Assessing Officer and dismissed the appeal of the assessee for non-prosecution.
Aggrieved by the Ld.CIT(A) order, the assessee is now in appeal before the Tribunal.
Shri VVS. Ankith, Learned Counsel for the Assessee, submitted that the learned CIT(A) has erred in law in sustaining the addition made by the Assessing Officer towards alleged amount for sale of property as GPA Holder u/sec.56(2)(vii)(b) of the Act, without appreciating the fact that the assessee was GPA holder of the property and the property has been sold by the original land owner and also consideration received for sale of property has been directly paid to the owner. Although, the assessee could not appeared before the learned CIT(A), but, all details has been 6 ITA.No.5/Hyd/2025 filed before the Assessing Officer to substantiate the claim. He further submitted that this issue has been squarely covered in favour of the assessee by the decision of ITAT, Hyderabad Bench, Hyderabad in the case of Mallesh Manthri, Hyderabad vs. ITO, Ward-15(1), Hyderabad in appellant’s own brother case where the Tribunal after considering relevant facts has deleted the addition made by the Assessing Officer vide order dated 17.12.2024 in ITA.No.362/Hyd./2024. Since the assessee has not furnished relevant evidences before the learned CIT(A) and also the issue is covered in favour of the assessee by the decision of ITAT, Hyderabad Bench, Hyderabad in the case of Mallesh Manthri (supra) in appellant’s own brother case, the matter may be set-aside to the file of learned CIT(A) for fresh adjudication.
The Learned Sr. AR Dr. Sachin Kumar, on the other hand, fairly agreed that the matter may be set-aside to the file of learned CIT(A) to provide another opportunity to the assessee to explain his case.
7 ITA.No.5/Hyd/2025 7. We have heard both the parties, perused the material on record and the orders of the authorities below. Learned Counsel for the Assessee, submitted that this issue has been squarely covered in favour of the assessee by the decision of ITAT, Hyderabad Bench, Hyderabad in the case of Mallesh Manthri, Hyderabad vs. ITO, Ward-15(1), Hyderabad in appellant’s brother case where similar issue has been considered by the Hon’ble Tribunal by holding that additions made by the Assessing Officer u/sec.56(2)(vii)(b) on the basis of GPA cannot be sustained. Since the assessee has not explained the case before the learned CIT(A) with relevant evidences, we are of the considered view that the matter needs to go back to the file of learned CIT(A) to examine the arguments of the assessee considering the case law relied upon by the assessee i.e., decision of ITAT, Hyderabad Bench, Hyderabad in the case of Mallesh Manthri, Hyderabad vs. ITO, Ward-15(1), Hyderabad in ITA.No.362/Hyd./2024 vide order dated 17.12.2024 and decide the issue in accordance with law, after providing reasonable opportunity of being heard to the assessee.
8 ITA.No.5/Hyd/2025 8. In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 24.03.2025