BOLLINENI GURAPPA NAIDU ,BENGALURU V. DCIT, CIRCLE-5(2)(1), BANGALORE

ITA 692/BANG/2025

AI Insights

This case involves an appeal by Sri Bollineni Gurappa Naidu against the order of the ld. CIT(A)/NFAC, which had earlier dismissed his appeal concerning the assessment year 2016-17. The primary issues in dispute were the unexplained cash payments amounting to Rs.2,38,39,000 for a land purchase and the denial of a deduction under section 54 of the Income Tax Act, 1961. The Assessing Officer (AO) had treated the cash payments as unexplained money under section 69A and denied the deduction due to lack of evidence of a capital gain deposit account or completion of construction within the specified time. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal found that the assessee was not adequately represented due to a communication gap with his counsel and thus decided to remit the case back to the CIT(A) for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780124 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 28-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NABEEL SAAD
• Assessee Lawyers: V. NARENDRA SHARMA
• Keywords: Opportunity of being heard; Capital Gains
• Section: 143(3); 142(1); 54

Judgement Text

"ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 692/Bang/2025 Assessment Year: 2016-17 Sri Bollineni Gurappa Naidu #42, 3rd Block, 6th Cross Thyagaraj Nagar T.R. Nagar Bengaluru 560 023 PAN NO : AHKPB8977G Vs. DCIT Circle 5(2)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri V. Narendra Sharma, A.R. Respondent by : Mr. Nabeel Saad, D.R. Date of Hearing : 08.07.2025 Date of Pronouncement : 06.10.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 11.2.2025 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1073126913(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2016-17. 2. The assessee has the raised the following grounds: Printed from counselvise.com ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore Page 2 of 6 Printed from counselvise.com ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore Page 3 of 6 3. Brief facts of the case are that the assessee filed his return of income for the assessment year 2016-17 on 31.3.2017, declaring a total income of Rs.23,80,960/-. The said return was processed u/s 143(1) of the Act. Thereafter, the case was selected for limited scrutiny through CASS to verify whether investment and income relating to properties are duly disclosed, whether deduction from capital gains has been claimed correctly and whether sales/turnover/receipts have been correctly offered to tax? Accordingly, the statutory notices u/s 143(2) as well as 142(1) of the Act were issued. The assessee submitted his reply on 14.12.2018 through the e-proceedings portal. During the course of assessment proceedings, the AO noticed that the assessee had made an investment of Rs.5,25,000/- towards the purchase of land on 2.11.2015. On perusal of the sale deed, it was observed that out of the total payment of Rs.5,25,00,000/-, the assessee had made payments of Rs.2,98,39,000/- by way of cash on different dates. After considering the reply of the assessee dated 14.12.2018, the AO held that the source of cash payment of Rs.2,38,39,000/- during the period 15.9.2014 to 2.11.2015 could not be established by the assessee and accordingly treated the same as unexplained money u/s 69A of the Act. 3.1 With regard to claim of deduction u/s 54 of the Act, the AO held that the assessee had neither claimed/proved to have any such capital gain deposit account nor the assessee furnished any proof of completion of construction of residential house within the specified time as mentioned in section 54 of the Act and hence the deduction claimed by the assessee u/s 54 of the Act was not acceptable and the assessment was concluded after addition of Rs.1,39,67,347/-. Thus, while concluding the assessment proceedings u/s 143(3) of the Act dated 23.12.2018 the AO made the following additions: Printed from counselvise.com ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore Page 4 of 6 a) Denial of exemption u/s 54 of the Act Rs.1,39,67,347/- b) Unexplained money added u/s 69A of the Act Rs.2,38,39,000/- 4. Aggrieved by the order of AO passed u/s 143(3) of the Act dated 23.12.2018, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 5. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing that the assessee owes a duty to be vigilant of his rights and is also expected to be equally vigilant about judicial/appeal proceedings pending with the income tax authorities against him or initiated at his instance. After filing the appeal or requesting for adjournment the litigant cannot go off to sleep and not respond to the notices at all. During the course of appellate proceedings, as the assessee sought repeated adjournments and neither make any submissions nor brought on record anything contrary to the conclusion made by the AO, and hence the grounds raised by the assessee were dismissed. 6. Again aggrieved by the order of ld. CIT(A)/NFAC dated 11.2.2025, the assessee has filed the present appeal before this Tribunal. 7. Before us, the ld. A.R. of the assessee vehemently submitted that the assessee could not represent his case before the ld. CIT(A)/NFAC due to the communication gap between the assessee and the counsel of the assessee. Further all the notices were sent to the e-mail ID of the CA, and therefore, the assessee was utterly unaware of the notices issued by the ld. CIT(A)/NFAC. Printed from counselvise.com ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore Page 5 of 6 8. The ld. D.R., on the other hand, strongly opposed the argument of the ld. A.R. of the assessee and further submitted that, despite giving sufficient opportunities, the assessee failed to file any submissions in support of his grounds of appeal and slept over the matter. 9. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee could not represent his case before the ld. CIT(A)/NFAC. Before us, the ld. A.R. of the assessee vehemently submitted that due to the communication gap between the assessee and his counsel, the assessee could not represent his case before the ld. CIT(A)/NFAC and prayed to grant one more opportunity before the ld. CIT(A)/NFAC to represent his case. Further, ld. A.R. of the assessee submitted that all the notices were sent to the e-mail ID of the CA and therefore, the assessee was utterly unaware of the issuance of the notices by the ld. CIT(A)/NFAC. This being so, in the interest of justice and fair play, and as requested by the ld. A.R. of the assessee we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(A)/NFAC to decide afresh in accordance with law. Needless to say a reasonable opportunity of being heard must be granted to the assessee. The assessee is also hereby directed to produce all the relevant information/documents/evidences in support of his claim and should not take unnecessary adjournments. We make it clear that in case of further default, the assessee shall not be entitled to any leniency. It is ordered accordingly. Printed from counselvise.com ITA No.692/Bang/2025 Sri Bollineni Gurappa Naidu, Bangalore Page 6 of 6 10. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 6th Oct, 2025 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 6th Oct, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "