SAI SHRADDHA DEVELOPERS,PUNE vs. INCOME TAX OFFICER WARD 7(1), PUNE

Briefly stated, the facts of the case are that the assessee is a partnership firm and engaged in the business of Plot/land purchase and sales during the relevant AY under consideration. For AY 2022-23, the assessee e-filed its return of income on 20.10.2022 declaring total income from business of Rs.1,69,17,420/-. The case of the assessee was selected for scrutiny under CASS on the issue of “sale consideration of the property in ITR is less than sale consideration of property reported in SFT”. Statutory notice(s) u/s 143(2) and 142(1) of the Income Tax Act, 1961 (the “Act”) along with questionnaire were issued and served upon the assessee calling for information/details/evidence regarding the above issue. In response thereto, the assessee submitted its reply from time to time. The reply of the assessee was considered and examined by the Ld. Assessing Officer (“AO”) but not found to be acceptable by him for the reason reproduced below :

“3.4 Reasons for inference drawn that variation is required on this issue- 3.4.1 Reply of the assessee has been considered and examined carefully on the basis of record available. The contention put forth by the assessee does not hold any merit. In order to examine the declaration of lower consideration in the ITR as compared to sale consideration in SFT assessee was asked to submit its clarification with reference to section 43CA/50C of the Act. In this regard, assessee has submitted that: 3.4.1(a) In agreement no 8901/2021 dated 29/12/21, there was one buyer name Mr. ABBAS TURABALI BOHARI from whom total sales consideration of Rs 8,73,000/- was receivable as per agreement however we had not received any amount from him and there was uncertainty about receiving sales consideration therefore we had not recognized that much amount in sales turnover in F Y 2021-22 however in FY 22-23 same we have recognized in sales turnover in FY 22-23 therefore adding again in FY 21-22 as per your addition is not correct and amount to double taxation. This contention of the assessee seems to be satisfactory. As provision of the Act, if the assessee has adopted mercantile system of accounting, then income is calculated on accrual basis as well as admissible expenses are deducted on accrual basis. Assessee is being followed cash accounting method, therefore total sales consideration of Rs 8,73,000/- received in F.Y. 2022-23 will be recognized only in F.Y. 2022-23. 3.4.1(b) Further, assessee has stated that a difference of Rs. 36,65,750/- arise because of variance in market value as per agreement and actual sale consideration received. All the sale agreement were registered at various sub registrar in Pune as time slot and availability of officer, a difference in valuation adopted by the state government for the purpose of payment of stamp duty and the actual sales consideration arise because of every sub registrar make valuation for stamp duty purpose by adopting different method that's why different arise further it had made all its sales at uniform rate of Rs 485/- per sq ft. This contention of the Assessee is not satisfactory and acceptable on merit. As provision of section 43CA of the Act says that: Section 43CA of the Act, 1961. “...if consideration from the transfer of asset (land or building) is lesser than its stamp duty value then the difference will be taxed as deemed income..." Hence, in view of the provision of section 43CA, total sale consideration of Rs. 7,07,59, 195/- adopted by the stamping authority for the purpose of payment of stamp duty should have been taken by the assessee for computation of income, but it has taken total sale consideration at Rs. 6,62,20,445/-Therefore, difference of Rs. 36,65,750/- is hereby added back to the total income of the assessee for the relevant assessment year. Penalty proceeding u/s 270A of the Act for under reported of income in consequence of misreporting is being initiated separately.”

3.1 The Ld. AO, therefore, completed the assessment u/s 143 r.w.s. 144B of the Act vide his order dated 27.02.2024 by making an addition of Rs.36,65,750/- u/s 43C of the Act on account of difference between value adopted by the authority of State Government for the purpose of payment of stamp duty as per sale agreement and actual sale consideration received against Plot sales.

“I have considered the condonation petition filed by the appellant. After considering the submission of the appellant, I find that there exist sufficient grounds to admit the appeal u/s 249(3) of the Act. Considering the prayer, the delay is condoned. The following notices of hearing are issued and served on the email address of appellant as under- S. Date of issue Compliance date Rmarks No. 1 21.10.2024 05.11.2024 The appellant did not respond. 2 11.03.2025 18.03.2025 The appellant did not respond. 3 21.03.2025 26.03.2025 The appellant did not respond.

There was no compliance on the part of the appellant after filing of first appeal and no communication was received from the appellant during course of this appellate proceeding till date. In view of the facts and circumstances mentioned hereinabove it is legitimate to infer that the appellant is not interested in the prosecution of the appeal.

Section 114(g) of Indian Evidence Act, 1872 lays a presumption that evidence which could be and is not produced when, If produced, be unfavorable to the person who withholds it. In the appellate proceedings, burden of proof lies on the assessee to prove that facts and findings of the AO are incorrect. If the assessee fails to disprove or rebut with cogent evidence such facts and findings, no interference is required. In this case, the assessee did not choose to avail several opportunities at the appellate proceedings which entails conclusion that he had no evidence or say or explanation against the order of the AO. Ex-Parte assessment/other order has its own inherent limitations as to its scope and extent. Hence, the assessee should not be allowed to be enriched or benefited unjustly for act of his own wrongs i.e. non compliance of hearings. The appellant remained non-compliant all through the appellate proceedings. It is seen that appellant has not submitted any reply in support of appeal. This shows that appellant is not interested in prosecuting the appeal or has nothing to say in support of appeal. Judgment on the issue of apathy of appellant to prosecute appeal and issue of non-compliance by appellant at appellate stage has been considered and decided in various cases by the Hon'ble Supreme Court and Various High Courts. Some of landmark decisions on this issue isas under: The decision of the Hon'ble High Court of Mumbai in the case of M/s Chemipol v/s. Union of India [Central Excise Appeal No.62 of 2009] clearly states that every court, judicial body or authority, which has a duty to decide a matter between two parties, inherently possesses the power to dismiss the case in default. For the sake of reference, the relevant extract of the judicial pronouncement rendered by the Hon'ble High Court of Mumbai quoting decision of Hon'ble Supreme Court in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced below: "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses." The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon'ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. Srinivasan (2000) 3 SCC 242. In the later case, the Apex Court has held as under:- "That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body institutedligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter, of a judicial or quasi-judicial body. In the absence of the complainant, therefore, the court will be will without its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the nonappearance of the complainant." In several judicial decisions it has been held that where in spite of notices issued, the appellant is persistently absent and the Tribunal on facts of the case, is of the view that the appellant is not interested in prosecuting the appeal, the court can exercise its inherent power to dismiss the appeal for non-prosecution. In the case of CIT Vs. B. N. Bhattacharya reported at 118 ITR 461, it was held that appeal does not mean merely filing of appeal but effectively pursuing it.

The Hon'ble ITAT, Delhi (ITR No.2006/Del/2011 dt.19.12.2001) in the case of Whirlpool of India Ltd. vs. DCIT had dismissed appeal for non-attendance at hearings, inferring that assessee was not interested in prosecuting of appeal. In the case of Chadha Finlease Ltd. Vs ACIT (ITA No.3013/Del/2011 date of order 20.12.2011) the Hon'ble ITAT Delhi had dismissed the appeal for non- attendance at hearings. In the case of CIT v. Gold Leaf Capital Corporation Ltd. on 02.09.2011 (ITA No.798 of 2009), the Hon'ble High Court of Delhi had held that a negligent assessee should not be given many opportunities just because that quantum of amount involved is high. The necessary course of action is to draw adverse inference, otherwise it would amount to give premium to the assessee for his negligence. When the assessee is non-cooperative, it can naturally be safely concluded that the assessee did not want to adduce evidence as it would expose falsity and non-genuineness. On similar facts in the case of PCIT vs. Ashokjichanduji Thakor 2018-TIOL- 2244-HC-AHM-IT, the Hon'ble Gujrat High Court, has held that from the since the very beginning i.e. assessment proceedings, assessee was non cooperative and number of opportunities were given by the AO, however, assessee did not cooperate and even did not file any reply. Thus, considering the material on record, AO made the addition. Even before the learned CIT(A) also the assessee was non cooperative. Therefore, CIT (A) was justified in deciding the proceedings ex-parte. Further, this case has been upheld by Hon'ble Supreme Court in [ 2021] 130 taxmann.com 131 (SC), wherein Hon'ble supreme Court has supported the view that when the assessee himself is non-cooperative right from the assessment till appellate proceedings, then there is no infirmity in proceeding being decided ex-parte. In view of the facts and legal position discussed above, it is seen that appellant is not interested in pursuing the appeal and not having any documents, explanation and evidence in support of grounds of appeal raised and thus has not discharged onus to prove the genuineness of the fact raised in grounds of appeal. It is seen that the appellant has filed Statement of facts/Grounds of appeal along with Form 35, but no written submission has been filed till date. I have carefully gone through the grounds of appeal, statement of facts, assessment order and other material on record. In response to notice of hearing issued, the appellant has not made any submissions to corroborate the Grounds of Appeal. The appellant has not submitted any documentary evidences during the Appellate proceedings. The appellant has not uploaded even a single document in response to the above notices, in spite of multiple hearing opportunities (as above). The appellant failed to substantiate the claims made in grounds of Appeal and there is nothing available on record to rebut the Assessing Officer's findings on merits. The appellant has not produced any material to controvert the finding of A O. Further, from the above mentioned conduct of the appellant, it is clear that the appellant is not interested in prosecuting its appeal. As no details are uploaded by the appellant, there is nothing available on record to rebut the Assessing Officer's findings on merits. No purpose would be served by keeping this appeal pending. As per the details available on record, there is nothing to controvert the findings of the AO and therefore, all the grounds raised in appeal are hereby dismissed. In the event, I have no reason to interfere with the findings of the AO. Hence, the order of the Assessing Officer is confirmed and the appeal is dismissed.”

Order pronounced in the open court on 23rd January, 2026.