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Facts
The appeals concern the assessment year 2014-2015 and involve two assessees, Padmavathi Gutta and Gutta Jagan Mohan Reddy (husband and wife). The appeals arise from orders of the CIT(A) who confirmed additions made by the Assessing Officer. There were delays in filing the appeals, attributed to the demise of the husband and ill-health of the wife.
Held
The Tribunal condoned the delay in filing the appeals. It found that the Assessing Officer and CIT(A) had not properly considered the share of the assessee in the sale of an immovable property and had not decided the appeal on merits. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.
Key Issues
Whether the appellate authorities correctly adjudicated the appeal on merits considering the share of the assessee in the property sale, and whether the matter should be remanded for proper consideration.
Sections Cited
147, 148, 143(3), 148A(b), 148A(d), Chapter-VI, 144, 144B, 139(4), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH : HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
ORDER PER MANJUNATHA G, A.M. : The above appeals ITA.No.1349/Hyd./2024 and ITA.No.82/Hyd./2025 have been filed by two assessee’s viz., Padmavathi Gutta and Gutta Jagan Mohan Reddy [Wife & Husbabnd] against the respective orders of the learned
2 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 CIT(A)-National Faceless Appeal Centre [in short “NFAC”], Delhi, relating to the assessment year 2014-2015. Since identical issues are involved in both these appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. Both the parties agreed to that, the decision taken in ITA.No.1349/Hyd./2024 for the assessment year 2014-2015 be applicable to the remaining appeal ITA.No.82/Hyd./2025 in the case of Gutta Jagan Mohan Reddy for the assessment year 2014-2015.
At the very outset, there is a delay of 29 days in ITA.No.1349/Hyd./2024 and 449 days in ITA.No.82/Hyd./ 2025 in filing the appeals before the Tribunal. The assessee filed an affidavit explaining the reasons for the delay due to sudden demise of her husband Gutta Jagan Mohan Reddy on 16.09.2024 and that she is the legal-heir suffering from ill-health. Therefore, she pleaded that the delay of 29 days and 449 days in filing the above appeals may please be condoned in the interest of justice.
3 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 3. We are satisfied with the reasons explained by the assessee for condonation of delay of 29 days and 449 days in filing both the appeals. We, therefore, condone the delay of 29 days and 449 days in filing the above appeals before the Tribunal and proceed to adjudicate the appeals on merits.
ITA.No.1349/Hyd./2024 – A.Y. 2014-2015 :
Facts of the case, in brief, are that the assessee viz., Smt. Padmavathi Gutta has filed her return of income u/sec.139(4) of the Act for the impugned assessment year 2014-2015 declaring total income of Rs.5,14,530/-. Since the said return has not been e-verified, the same remained as invalid return. As per the specific information available with the Department, the assessee along with two others sold immovable property vide Doc.No.3941/2013 for a consideration of Rs.2.60 crores, whereas, the SRO value was at Rs.2,77,32,240/-. Out of the said sale consideration of Rs.2.60 crores, the assessee was paid Rs.1 crore through banking channel by way of cheque drawn on Bank of India, Kachiguda, Hyderabad. Since the assessee has not declared
4 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 capital gains in the invalid return, the Assessing Officer noted that there is an escapement of income of more than Rs.1 crore and accordingly, the Assessing Officer reopened the assessment u/sec.147 of the Act and issued notice dated 12.04.2021 u/sec.148 of the Act. In light of Judgment of Hon’ble Supreme Court and as per the provisions of sec.148A(b) of the Act, the Assessing Officer issued show cause notice dated 26.05.2022 wherein the assessee was requested to show cause as to why a notice u/sec.148 of the Act should not be issued on the basis of the said information. Since, there was no reply from the side of the assessee, the Assessing Officer again issued notice u/sec.148 of the Act dated 30.07.2022 with the approval from the Competent Authority after passing of order u/sec.148A(d) of the Act which was duly served upon the assessee. In absence of any satisfactory explanation from the side of the assessee, the Assessing Officer assessed the long term capital gains of the assessee at Rs.97,55,884/-; made addition of unexplained money of Rs.3 lakhs on account of agricultural income; made addition of 5 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 Rs.3,27,257/- by disallowing deduction claimed under Chapter-VI and determined the total income of the assessee at Rs.1,05,97,671/- vide order dated 09.05.2023 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.
On being aggrieved, the assessee carried the matter in appeal before the learned CIT(A). During the course of appellate proceedings, the learned CIT(A) had issued several notices to the assessee and in absence of any meaningful/worthwhile explanation from the side of the assessee, the learned CIT(A) confirmed the additions made by the Assessing Officer, without deciding the appeal on merits.
Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal.
During the course of hearing, Learned Counsel for the Assessee submitted that the impugned notice issued sec.148 dated 26.05.2022 was issued/emailed in the name of her husband who was reached to his heavenly abode and 6 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 in that trauma she could not substantiate her claims before the authorities below. It was the submission of the assessee that the Assessing Officer passed assessment order in the case of her late husband Gutta Jagan Mohan Reddy for the same property and the capital gains worked-out on all three owners at Rs.1,45,77,638/- and that assessee’s share of long term capital gains in proportion to her share was at Rs.34,65,126/- out of the addition made by the Assessing Officer on account of long term capital gains in the hands of the assessee at Rs.97,55,884/- and also ignored the construction cost for 13271 sft. The Learned Counsel for the Assessee, in view of the above factual position, pleaded that providing an opportunity to the assessee to substantiate her case before the learned CIT(A), the assessee is ready to furnish all the documents as called for by the learned CIT(A). He accordingly pleaded that the matter in issue may please be remitted back to the file of learned CIT(A)/AO in the interest of justice.
7 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 8. The Learned DR on the other hand vehemently relied on the orders of the authorities below. Despite service of notice, the assessee never bothered to substantiate her case and, therefore, the Assessing Officer rightly made the impugned additions in the hands of the assessee which have been confirmed by the learned CIT(A) in absence of any worthwhile explanation from the side of the assessee. He, accordingly, pleaded that it is not a fit case to remit the matter in issue back to the file of learned CIT(A) and pleaded that the orders of the authorities below should be confirmed.
We have heard the rival submissions of both the parties and perused the material available on record. We find that first the impugned notice u/sec.148 dated 26.05.2022 was issued in favour of the assessee’s husband which is borne-out from the assessment order. It is a fact that the assessee was reached to heavenly abode. Admittedly, while making the impugned addition of Rs.97,55,884/- on account of long term capital gains, the Assessing Officer failed to note the proportion/share of the 8 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 property in the hands of the assessee when the immovable property was sold by the assessee along with two others as noted by the Assessing Officer in his assessment order. When the matter carried in appeal before the learned CIT(A), the learned CIT(A) dismissed the appeal of the assessee on account of non-explanation from the side of the assessee to substantiate her claim without deciding the appeal on merits as contemplated u/sec.250(6) of the Act, according to which, the learned CIT(A) has to give reasons for decision and adjudication thereof, even if the assessee did not appear before him. We find that since the Learned Counsel for the Assessee requested to remit the matter in issue back to the file learned CIT(A), taking into consideration of the facts and circumstances of the case, we remit the matter in issue back to the file of learned CIT(A) with a direction to re- decide the case of the assessee afresh, after affording adequate opportunity of being heard to the assessee. Needless to say, it is the sole risk and responsibility of the assessee to plead and prove her case in consequential
9 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 proceedings. Accordingly, the appeal of the assessee is allowed for statistical purposes.
ITA.No.82/Hyd./2025 – Assessment Year 2014-2015 :
For the same assessment year 2014-2015 in the case of Jagan Mohan Reddy Gutta [ITA.No.82/Hyd./2025] the Assessing Officer determined the total income of the assessee at Rs.9,25,890/- as against the returned income of Rs.2,69,710/- vide order dated 31.12.2018 passed u/sec.143(3) r.w.s.147 of the Income Tax Act, 1961. And in appeal, the learned CIT(A) confirmed the order of the Assessing Officer in absence of explanation offered by the assessee to justify his claim, without deciding the appeal on merits.
Same order to follow in ITA.No.82/Hyd./2025 for the assessment year 2014-2015 in the case of Guutta Jagan Mohan Reddy who is husband of the assessee Smt. Gutta Padmavathi in ITA.No.1349/Hyd.2024 for the assessment year 2014-2015.
10 ITA.Nos.1349/Hyd./2024 & ITA.No.82/Hyd./2025 12. In the result, appeals of both the Assessee’s ITA.No.1349/Hyd.2024 and ITA.No.82/Hyd./2025 are allowed for statistical purposes. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 05.03.2025.
Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 05th March, 2025 VBP Copy to Padmavathi Gutta, 3-6/5, Plot No.43, Sri Sai Colony, 1. Gachibowli, Hyderabad – 500 032. Telangana 2. Gutta Jagan Mohan Reddy, 3-6/5, Plot No.43, Sri Sai Colony, Gachibowli, Hyderabad – 500 032. Telangana 3. The Pr. CIT, Hyderabad. 4. The DR ITAT “B” Bench, Hyderabad 5. Guard File //By Order// //True Copy//
Sr. Private Secretary : ITAT : Hyderabad Benches, Hyderabad.