THIRUPATHI RAO NAINENI,KARIMNAGAR vs. INCOME TAX OFFICER, WARD-2, KARIMNAGAR

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) in sustaining the disallowance of Rs.4,73,23,952/- under the head “Long-Term Capital Gain” made by the Assessing Officer u/s 147 r.w.s 144B of the I.T. Act, 1961.

Facts of the case, in brief, are that the appellant is an Individual. The return of income for AY 2017-18 was not filed by the appellant. Later on, the case was reopened u/s 147 on the basis of information received from the ACIT, Central Circle-1, Hyderabad that the appellant had sold 2 immovable properties along with 3 other co-owners for Rs.5,94,00,000/- and Rs.5.89,50,000/- but the fair market value for stamp duty purpose was determined at Rs.9,90,00,000/- and Rs.9,82,00,000/- respectively. The share of the appellant was Rs.4,93,00,000/- being 1/4th owner, however the appellant had not filed return of income and had not disclosed the capital gains and did not pay the capital gain tax. Notice u/s 148 was issued on 19/04/2021 within the extended time limit as per Taxation and other laws and as per CBDT Notification No.20 dated 31/03/2021 and NotificationNo.38 dated 27/0A/2021. In response, the appellant had filed return of income declaring total income of Rs.3,58,310/- for AY 2017-18 was filed on 18/05/2021 Thereafter, the notice u/s 148 was treated as show cause notice as ger the decision of Hon'ble Supreme Court of India in the case of Ashish-Agarwal and others, order u/s 148A was passed after following prescribed procedure and a notice u/s 148 was issued on 28/07/2022. During rea-assessment proceedings, the appellant had contended that he is not the owner of the property sold and has not received any sale consideration since he was only General Power of Attorney holder. However, the appellant failed to substantiate his claim with supporting evidences, therefore the AO taxed the share of appellant of Rs.4,73,23,952/- under the head long term capital gain.

Aggrieved by the assessment order passed by the AO, the appellant has filed an appeal before the learned CIT (A). Since the assessee failed to comply with the notices issued by the learned CIT (A), the learned CIT (A) dismissed the appeal.

Being aggrieved, the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that given an opportunity, the assessee would be in a position to explain his case before the learned CIT (A) with proof. Hence, the learned Counsel for the assessee submitted that, in the interest of justice, the assessee may be given another opportunity of being heard before the learned CIT (A).

On the other hand, the learned DR relied upon the orders of the authorities below. The learned DR submitted that the assessee did not comply with the notices issued by the learned CIT (A) to substantiate the claim made in the grounds of appeal with supporting evidences inspite of giving adequate opportunities. Hence the grounds raised by the assessee should be dismissed and the order of the learned CIT (A) should be upheld,.

We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A). We find that the assessee failed to substantiate his claim made in the grounds of appeal with supporting evidences before the learned CIT (A). Considering the totality of the facts and circumstances of Page 3 of 4 the case, and in the interest of natural justice, we deem it appropriate to remand this issue to the file of the learned CIT (A) with a direction to give one more opportunity to the assessee to submit supporting evidences. Needless to say, the assessee shall be given an opportunity to submit all the requisite details and evidences before the learned CIT (A). The assessee is directed to submit all evidences before the learned CIT (A) as and when called for, without seeking any adjournment under any pretext. Since the assessee failed to appear and file the requisite details before the learned CIT (A), we levy a charge of Rs.5000/- on the assessee and the assessee is hereby directed to pay a sum of Rs.5000/- at the Telangana State Legal Aid Authorities at the Hon'ble Telangana High Court within a period of one month from the date of this order and submit necessary payment slip with the Registry. We order accordingly.