R K SURAKSHA PROPERTIES,BENGALURU V. ACIT, CIRCLE-3(2)(1), BENGALURU

ITA 2281/BANG/2025

AI Insights

The case involves M/s. R K Suraksha Properties, a firm engaged in the construction of residential apartments, which appealed against the order of the National Faceless Appeal Centre, Delhi. The appeal was initially dismissed due to the assessee's failure to respond to multiple notices. The primary contention in the appeal was the improper addition of 26,896,939 under section 40(a)(ia) of the Income Tax Act, which represented 30% of certain purchases. The Tribunal found that the notices were not properly served as the assessee had not explicitly agreed to receive communications via email, leading to the reversal of the CIT  A's decision and a remand of the case for further examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846291 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Bangalore
• Assessment Year: 2023-2024
• Appeal Filed On: 13-10-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN S
• Assessee Lawyers: V NARENDRA SHARMA
• Keywords: TDS
• Section: 139

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 2281/Bang/2025 Assessment Year: 2023-24 M/s. R K Suraksha Properties, #68, N M S Layout, Hobli, Subramanya Pura Post, Uttarahalli, Bengaluru – 560 061. PAN: AAKFR5894H Vs. The ACIT, Circle 3(2)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri V Narendra Sharma, Advocate Revenue by : Shri Subramanian S, JCIT Date of Hearing : 10-02-2026 Date of Pronouncement : 25-03-2026 ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1. ITA No. 2281/Bangalore/2025 is filed for assessment year 2023 – 24 by RK Suraksha properties Bangalore (the assessee/appellant) against the appellate order passed by the National faceless appeal Centre, Delhi (The Learned CIT – A) dated 25 September 2025 wherein the appeal filed by the assessee against the assessment order passed under section 143 (3) of the Income tax Act [ the Act ] act by The Income Tax Officer assessment unit of income tax department [ the ld AO ] was dismissed as the assessee did not comply with four notices of the learned CIT – A and therefore he did not see any reason to interfere with the assessment order. 2. The grievance of the assessee as per grounds of appeal shows that assessee has not been given a proper and effective opportunity of hearing and thereby Printed from counselvise.com ITA No. 2281/Bang/2025 Page 2 of 5 the appellate order passed by the learned CIT – A is not sustainable. Further the addition of ₹ 26,896,939/– under section 40 (a) (ia) of the act being 30% of the purchases of ₹ 89,656,464 sustained by the learned CIT – A is also not proper. 3. The brief fact of the case shows that that assessee is a firm carrying on the business of construction of residential apartments. Assessee filed its return of income on 30 September 2023 at a total income of ₹ 172,410,050/–. Accounts of the assessee are audited. The return of income was picked up for scrutiny for verification of business purchases made by the assessee and TDS under section 194Q of the act. Necessary notice under section 143 (2) was issued to the assessee. 4. The briefly stated facts regarding the reason for disallowance show that during assessment proceedings the assessee was asked to furnish several details. Based on such details the AO noted that with respect to the five supplier’s assessee has made a total transaction value of ₹ 89,656,464. On purchases made from these persons the assessee has failed to deduct tax at source under section 194 Q of the act within due date and the assessee was found to be in default as the form No. 26AS submitted by the assessee is not acceptable because the sellers have not filed the return of income under section 139 of the act and also the assessee has deducted the TDS after the issuance of notice under section 142 (1) of the act. Therefore, the assessee is treated as an ‘assessee in default’ as per the provisions of section 194Q of the act for non- deduction of tax on purchase of ₹ 89,656,464. Accordingly, the learned assessing officer disallowed 30% thereof amounting to ₹ 20,896,939 under the provisions of section 40 (a)(ia) of the act and added to the total income of the assessee by passing an assessment order under section 143 (3) read with section 144B of the act on 17 March 2025 determining the total income of the assessee at ₹ 199,306,989/-. 5. Aggrieved with the assessment order, the assessee preferred an appeal before the learned CIT – A wherein the assessee was granted four opportunities of the hearing which were not responded to and therefore the learned CIT – A dismissed the appeal of the assessee stating that appellant does not want to press any of the grounds of appeal in absence of any material/arguments or Printed from counselvise.com ITA No. 2281/Bang/2025 Page 3 of 5 submission from the appellant and he is left with the documents in facts available on record to base his judgement and therefore he confirmed the action of the learned assessing officer. 6. The assessee is in appeal before us it was submitted that the assessee did not mention in form No. 35 that he would like to receive the notices through email. Therefore, assessee is unaware how such notices have been issued to the assessee. Accordingly, it was stated that none of these notices issued by the learned CIT – A has reached the assessee. It was submitted that in absence of receipt of any notice, it is not the fault of the assessee for non-appearance. 7. The learned departmental representative Shri Subramaniam S, The Joint Commissioner of Income Tax vehemently submitted that the income tax department has served the notices to the assessee on email as per paragraph No. 5.2 of the appellate order as per the email address provided by the assessee and therefore it is the duty of the assessee to respond to such notices. 8. We have carefully considered the rival contention and perused the orders of the learned lower authorities. Admittedly the learned CIT – A has issued four notices to the assessee. All these notices have been issued to the assessee through email as per paragraph No. 5.2 of the appellate order. However, we have carefully perused form No. 35 filed by the assessee wherein though the assessee has given its email ID but in response to the question whether notices/communication may be sent by email or not, the assessee has given neither given affirmative nor a negative answer. In absence of any such answer, merely serving the assessee notices through email is not proper. It is not the case of the assessee that assessee has agreed to accept the notices through email. Therefore, in absence of any such information in form No. 35, we do not find any reason to uphold the order of the learned CIT – A where four notices through email were issued to the assessee which remained unresponsive. Even otherwise the learned CIT – A has not given any finding whether the learned assessing officer is correct in making the addition to the total income of the assessee despite the assessee has given permanent account No. of all these five suppliers. The learned CIT – A even has not stated that why the order of the learned assessing officer is correct. Merely the assessee has not furnished Printed from counselvise.com ITA No. 2281/Bang/2025 Page 4 of 5 any reply, the learned CIT – A cannot uphold the order of the learned assessing officer without giving his own finding. In the result the order of the learned CIT – A is reversed. 9. With respect to the issue on the merits, we find that the assessee has provided the permanent account No. of the parties from whom purchases have been made. The addition has been made for the simple reason that the suppliers have not furnished the income tax return for the year under consideration and that form No. 26A submitted by the appellant was incomplete. The learned assessing officer in the last para of the assessment order has categorically mentioned that assessee has deducted tax at source after issuance of notice under section 142 (1) of the act. Therefore, if the assessee has deducted tax at source even belatedly, and the purchaser, if they have filed the return of income, and disclosed the above income in the return of income, the assessee deserves a chance to explain that there cannot be any disallowance under section 40 a(ia) of the act. 10. In view of the above facts, we restore the whole issue back to the file of the learned assessing officer with a direction to the assessee to substantiate the purchases from these five parties and show that the tax has been deducted at source or if not deducted whether these parties have disclosed the sales in their books of account or not within 120 days from the date of receipt of this order The assessee is also free to raise any other contention against the above disallowance. The learned assessing officer is directed to verify and examine the details submitted and contentions raised by the assessee, thereafter, may decide the issue in accordance with the law. 11. In the result appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 25th March, 2026. Sd/- (SOUNDARARAJAN K.,) Sd/- (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 25th March, 2026. *TNTS* Printed from counselvise.com ITA No. 2281/Bang/2025 Page 5 of 5 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "