M/S. SAKETH BUILDERS,BANGALORE V. INCOME TAX OFFICER, WARD-7(2)(5), BANGALORE

ITA 44/BANG/2025

AI Insights

The case involves M/s. Saketh Builders, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the Assessment Year 2014-15. The primary contention was the non-consideration of documents and explanations provided by the assessee regarding the source of funds for property transfer, which was treated as unexplained money under section 69 of the Income Tax Act. The assessee argued that only a part of the sale consideration was paid during the relevant assessment year, and the rest in the subsequent year, which was not acknowledged by the AO. The CIT(A) dismissed the appeal ex-parte due to non-submission of documents and adjournment requests by the assessee. The Tribunal found that the assessee was not given a fair opportunity to present their case and thus remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32819 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN S
• Assessee Lawyers: SHIVAKUMAR G
• Keywords: Set aside; Opportunity of being heard
• Section: 148; 144; 142(1); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 44/Bang/2025 Assessment Year : 2014-15 M/s. Saketh Builders, No. 216, Hosakerihalli Village, Uttarahalli Hobli Gurudatta Layout, Near Dattathreya Temp, Bangalore – 560 085. PAN: ACKFS9355G Vs. The Income Tax Officer, Ward – 7(2)(5), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Shivakumar G, CA Revenue by : Shri Subramanian .S, JCIT-DR Date of Hearing : 26-02-2025 Date of Pronouncement : 28-02-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 14/11/2024 in respect of the A.Y. 2014-15. 2. The brief facts of the case are that the assessee had not filed their return of income and based on the information, a notice u/s. 148 was issued for which also the assessee had not filed his return of income. Thereafter, notice u/s. 142(1) was issued for which also the assessee had not responded. Since the assessee had not responded to any notices, a Page 2 of 4 ITA No. 44/Bang/2025 reference to the verification unit was made on 14/01/2022 and the notice was sent through speed post which was received by the assessee on 29/01/2022. In spite of the receipt of the notice, the assessee had not filed any response and thereafter a show cause notice was issued and finally an assessment has been made u/s. 144 of the Act in which the payments made for the transfer of the property has been treated as income u/s. 69 of the Act. The AO had sent a draft assessment order for which the assessee filed their reply on 18/03/2022. The AO observed that the assessee had not submitted any documentary evidences for the source of the fund and therefore the AO had confirmed the assessment. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that the AO had not considered the explanation offered at the time of assessment and also the AO had not considered the relevant documents produced before him and therefore the assessment is an arbitrary one. The assessee further contended that even assuming that the assessee had not submitted any documents / explanations, during the Assessment Year 2014-15, the assessee had paid a part payment and the balance in the next assessment year and therefore subjecting the entire sale consideration as paid during the Assessment Year is against the facts of the case. 3. The Ld.CIT(A) had issued notices on four occasions but the assessee had neither filed any written submissions nor applied for an adjournment except for the hearing notice dated 30/10/2024 and therefore the Ld.CIT(A) had rejected the adjournment request and dismissed the appeal ex-parte. Aggrieved with the said order, the assessee is in appeal before this Tribunal. At the time of hearing, the Ld.AR submitted that several documents were placed before the AO but unfortunately the AO had not considered the same and passed an order u/s. 144 of the Act as if the assessee had not submitted any details. The Ld.AR further submitted that the addition made u/s. 69 in respect of the purchase of property is also not correct since the assessee had paid a part consideration during the Assessment Year and the balance consideration during the next Assessment Year and therefore taking Page 3 of 4 ITA No. 44/Bang/2025 the entire sale consideration as the amount paid during the Assessment Year and subjected the same to tax u/s. 69 of the Act is not correct. 4. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal. 5. We have heard the arguments of both sides and perused the materials available on record. 6. It is the case of the assessee that they had filed the relevant documents along with the confirmation letter of the partners and also offered their explanations before the AO but unfortunately the AO had observed that the assessee had not submitted the documents. We have also considered the ground raised before the Ld.CIT(A) in which the assessee had submitted that only a part consideration was paid during the Assessment Year and therefore the addition made by treating the entire sale consideration paid during the Assessment Year is also required to be verified at the end of the AO. If the contention of the assessee is correct, definitely the addition made on the total sale consideration is not correct. But unfortunately the AO had observed that nothing was placed before him and therefore the entire sale consideration has been treated as unexplained money and assessment was made u/s. 69 of the Act. The assessee also lost the opportunity before the Ld.CIT(A) since the Ld.CIT(A) had rejected the adjournment request made by the appellant on 14/11/2024. In such circumstances, the assessee has no opportunity to explain the facts before any of the authorities since the AO as well as the Ld.CIT(A) had made an ex- parte order. In such circumstances, we are of the view that one more opportunity should be granted to the assessee to place their case before the AO. 7. We therefore set aside the order of the authorities below and remit the issue to the file of the AO to decide the issue afresh after considering the Page 4 of 4 ITA No. 44/Bang/2025 objections and the documents to be filed by the assessee and also after granting a reasonable opportunity of being heard to the assessee. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 28th February, 2025. Sd/- Sd/- (WASEEM AHMED) (SOUNDARARAJAN K.) Accountant Member Judicial Member Bangalore, Dated, the 28th February, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore "