SUNIL KUMAR SINGH,PATNA vs ITO, WARD- 6 (1), PATNA

Income Tax Appellate Tribunal, PATNA BENCH, PATNA

For Appellant: Shri A.K. Rastogi, Sr. Advocate

Hearing: 13.01.2026Pronounced: 15.01.2026

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA (VIRTUAL HEARING AT KOLKATA) SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER SHRI SONJOY SARMA, JUDICIAL MEMBER

ITA No. 390/PAT/2025 Assessment Year : 2018-19

Sunil Kumar Singh, Vs. ITO, Ward-6(1), Near Sanghat Ranipur Khirki, Patna P.S. Mehdiganj, Patna City, Patna- 800008 [PAN: BLHPS5334J] APPELLANT RESPONDENT

Assessee by Shri A.K. Rastogi, Sr. Advocate : Revenue by Mohd. A H Chowdhury, CIT (DR) :

Date of hearing : 13.01.2026 Date of Pronouncement : 15.01.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)] dated 24.06.2025, DIN & order No. ITBA/NFAC/S/250/2025-26/1077736170(1) raising various grounds are as under:

“1. For that the Ld. CIT(A) has erred in dismissing the appeal without allowing opportunity of virtual hearing and thereby has violated the mandatory

2 ITA No. 390/Pat/2025 Sunil Kumar Singh provisions of Section 250/250(6B) and the Faceless Appeal Scheme, 2021 dated 28/12/2021 notified by the CBDT. 2. For that the Ld. CIT(A), NFAC has issued a show cause notice u/s 251(2) of the Act dated 17/06/2025 for compliance on 20/06/2025 and thereby denying proper and adequate opportunity of being heard to the appellant. 3. For that the Ld. CIT(A), NFAC has erred in dismissing the appeal and thereby affirming the additions made by the Assessing Officer which inter alia include denial of deduction u/s 54F and 54B of the Income Tax Act, 1961. 4. For that the Ld. CIT(A), NFAC has erred in holding that the appellant cannot claim lack of opportunity by the A.O. in response to SCN dated 15/04/2021 on the ground that the appellant was aware of the fact of verification of claim of deduction u/s 54F. 5. For that the Ld. CIT(A), NFAC has erred in holding that the appellant has deliberately fabricated the facts in order to get deduction u/s 54F of the Act. 6. For that the Ld. CIT(A), NFAC has erred in holding that construction of residential house was started before the sale of immovable properties on which long term capital gain was derived. 7. For that the Ld. CIT(A), NFAC has erred in holding that the appellant has claimed construction of new residential house on the land purchased during F.Y. 2017-18 contrary to the submission dated 26/04/2023 and 14/05/2025 made before him. 8. For that the Ld. CIT(A), NFAC has erred in not adjudicating the ground relating to disallowance of Rs.1,75,000/- made by the A.O. on account of incidental expenses while computing income from capital gain. 9. For that the Ld. CIT(A), NFAC has erred in upholding addition of Rs.2,05,609/-being the difference between cost of acquisition of the property as per Rol amounting to Rs. 14.42 lakhs vis-a-vis Rs. 12,36,730/- without appreciating the fact that the claim of Rs.12.36 lakhs as per circle rate of F.Y.2001-02 issued by Govt. of Bihar. 10. For that the Ld. CIT(A), NFAC has denying deduction u/s 54F and 54B amounting to Rs.2,89,07,000/- (Rs.1.58 crore u/s 54B+Rs.1.31 crore u/s 54F). 11. For that the Ld. CIT(A), NFAC has erred in drawing adverse inference on account of non-furnishing of approved building plan by local authority in support of the new construction by ignoring the municipal assessment and municipal tax receipt already on record which establishes the fact of construction of new residential house. 12. For that the Ld. CIT(A), NFAC has erred in not appreciating the fact that deduction of Rs.1.58 crore was claimed on account of purchase of agricultural land against sale of ancestral agricultural land u/s 54B and its claim u/s 54F in the Rol and in the petition dated 17/01/2021 u/s 54F was through inadvertence. 13. For that the Ld. CIT(A), NFAC has erred in making enhancement of Rs.1,31,00,000/- on account of investment in construction of new house u/s

3 ITA No. 390/Pat/2025 Sunil Kumar Singh 69C of the Income Tax Act although the same was sourced out of sale proceeds of Rs.3.12 crores. 14. For that the sustenance of additions/disallowance/denial of deduction u/s 54F and 54B amounting to Rs 2,05,000/-, Rs. 1,75,000/- and Rs.2.89 crores and enhancement of Rs.1.31 crores is wrong, illegal and unjustified on the facts and in the circumstances of the appellant's case. 15. For that the whole order is bad in fact and law of the case and is fit to be modified and/or restored back to the file of the A.O. and/or the CIT(A) as neither the A.O. nor the CIT(A) has granted proper and adequate opportunity of being heard while making additions and its sustenance by the CIT(A) including resorting to enhancement of Rs.1.31 crores. 16. For that the appellant may not be treated as assessee in default in respect of the disputed demand including interest amounting to Rs. 1.01 crore. 17. For that the appellant reserves its right to furnish detailed written submission along with documents and evidences on or before date of hearing. 18. For that the appellant may be given opportunity of personal hearing physically/virtually at the time of hearing of the appeal. 19. For that the other grounds, if any, shall be urged at the time of hearing of the appeal.” 2. Briefly stated the facts of the case are that the assessee filed return of income on 03.10.2018 declaring total income of Rs. 1,61,778/- and the return was processed under Section 143(1)(a) of the Act and subsequently, the case was selected for limited scrutiny and notice u/s 143(2) was issued to the assessee on the reason that the capital gains deduction claimed thereafter, other statutory notices were issued to the assessee and the assessee submitted part in reply. on 15.04.2021 a issued show cause notice to the assessee as per the contents therein and time was granted to the assessee to submit reply by 18.04.2021 and assessment order was passed on 19.04.2021 assessing the income at Rs. 3,17,56,520/- disallowing deduction claimed under Section 54F of the Act for Rs. 3,02,11,651/- and three other additions were made as per section 143(1)(a) of the Act for Rs. 11,64,260/-, as per para 3.1.1, Rs. 1,75,000/- and as per para 3.3 of Rs. 2,05,609/-.

Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A), NFAC. During the appellate proceedings, the assessee filed

4 ITA No. 390/Pat/2025 Sunil Kumar Singh detailed written submissions as per para No. 11.2 of the Ld. CIT(A) order. During the course of appellate proceedings, enhancement as per section 251(2) of the Act was also made by the Ld. CIT(A), NFAC for Rs. 1,31,00,000/- under Section 69C of the Act for non-comply of the show cause notice issued by the Ld. CIT(A) to substantiate the cost of improvement incurred by the assessee. The ld. CIT(A) issued show cause notice on 17.06.2025 and allowing time to the assessee by 20.06.2025 and the order was passed on 24.06.2025.

Aggrieved from the above order, the assessee filed before the ITAT.

The Ld. Counsel reiterated the submissions made before the lower authorities and submitted that both the authorities had not complied the provision for giving time to submit reply against the show cause notice they had not granted sufficient time which is a violation of the provision of the natural justice and requested that the assessee should have been allowed sufficient time to submit the documents as required by both the authorities.

On the other hand, the Ld. DR submitted that the assessee could not substantiate its claim made under Section 54F of the Act and during the appellate proceeding, the assessee could not furnish the documents towards cost of improvement as claimed in the income tax return and the assessee has given reply of the show cause notice issued by both the authorities below and he objected for giving one more chance to the assessee.

Considering the rival submissions and perusing the entire materials available on record and the order of authorities below and the submission made by the Ld. Counsel which is placed on record. The main issue raised by the Ld. Counsel that both the authorities below have violated the principal of natural justice for allowing time to reply of

5 ITA No. 390/Pat/2025 Sunil Kumar Singh the show cause notice issued by both the authorities below. It is clear from the above facts; we noted supra that both the authorities below have not granted sufficient time to submit the reply of show cause notices. Considering the facts of the case and in the interests of justice, we are remitting this issue back to the file of Assessing Officer for giving reasonable opportunity of being heard to the assessee and decided the issue as per law. The assessee is directed to substantiate his case with cogent documents in support of his claim and not to seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced on 15.01.2026

Sd/- Sd/- (Sonjoy Sarma) (Laxmi Prasad Sahu) Judicial Member Accountant Member Dated: 15.01.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

SUNIL KUMAR SINGH,PATNA vs. ITO, WARD- 6 (1), PATNA