SEENAPPA CHANDRA SHEKAR, ,BENGALURU V. INCOME TAX OFFICER, WARD-4(2)(3), BENGALURU

ITA 22/BANG/2025

AI Insights

The case involves an appeal by Seenappa Chandra Sekhar against the order of the National Faceless Appeal Centre, which had dismissed his appeal concerning a reassessment order under sections 147 and 144 of the Income Tax Act, 1961. The reassessment was based on the sale of agricultural land, which the assessing officer treated as a long-term capital gain. The Tribunal found that the assessee was not given proper opportunity to present his case, as notices were not sent to his email as requested but were instead posted on the ITBA portal. The Tribunal restored the matter to the assessing officer for a detailed examination and fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774365 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 10-01-2025
• Other Referred Cases: ITA number 1464/Bang/2008 for assessment year 2005 \\u2013 06 dated 30 December 2009, WTA number 34 \\u2013 36/Bang/2014 for assessment year 2005 \\u2013 06 and 2007 \\u2013 08 dated 16/10/2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRANAY SHARMA
• Keywords: Cost of acquisition; Principle of natural justice
• Section: 147; 148; 144

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.22/Bang/2025 Assessment year : 2016-17 Seenappa Chandra Shekar, 34/4 a2, Basavanagar Coconut Garden, Govindashettyalya, Electronic City Post, Bengaluru – 560 100. PAN: AGOPC 2240C Vs. The Income Tax Officer, Ward 4(2)(3), Bengaluru. APPELLANT RESPONDENT Appellant by : Shri Pranay Sharma, Advocate Respondent by : Shri Thamba Mahendra, Jt.CIT(DR)(ITAT), Bengaluru. Date of hearing : 24.07.2025 Date of Pronouncement : 01.09.2025 O R D E R Per Prashant Maharishi, Vice President 1. This appeal is filed by Mr Seenappa Chandra Sekhar (the assessee/appellant) for assessment year 2016 – 17 against appellate order passed by the National faceless appeal Centre, Delhi (the learned CIT – A) dated 14/11/2024 wherein the appeal filed by the assessee against the reassessment order dated 16/3/2022 passed under section Printed from counselvise.com ITA No.22/Bang/2025 Page 2 of 7 147 read with section 144 of the Income Tax Act, 1961 [the Act] by the Income Tax Officer, KAR-W-(126)(91) [ the ld. AO] was dismissed. 2. The main reason for dismissal of the appeal was that assessee was given an opportunity by the learned CIT – A for five times which was not availed and therefore the CIT – A was of the view that assessee is not interested in prosecuting the appeal. He further held that in absence of any submission by the assessee, the appeal stands dismissed. 3. Assessee aggrieved with the same has preferred appeal raising several grounds of appeal. However, the main grievance of the assessee is a violation of the principles of natural justice and the addition on the merits confirmed by the learned CIT – A in an ex parte appellate order. 4. The brief facts of the case show that assessee, an individual, filed his return of income on 20/2/18 at total income of ₹ 3,67,450/–. The return was not picked up for scrutiny however later action under section 147 was initiated based on reasons recorded and notice under section 148 of the Act was served on 31/3/2021. The assessee was also issued notice under section 142 (1) and no compliance was made by the assessee and therefore notice under section 144 was issued on 23/2/2022 asking the assessee to show cause as to why the amount of ₹ 10,498,950/– may not be treated as a capital gain and added to the income of the assessee. Assessee did not make any compliance and therefore the learned assessing officer made the addition of a long-term capital gain of ₹ 9,014,250/–. Printed from counselvise.com ITA No.22/Bang/2025 Page 3 of 7 5. Facts related to the merit of the case is that assessee has made a sale of immovable property of 2 acres and 21 gunta for ₹ 1,00,06,500/- on 16/10/2015 to Shri Satyanarayana Educational Trust and tax deduction at source of ₹ 106,015/– was made. Thus, the net consideration was received of ₹ 14,098,950. The permission for conversion of land to non-agricultural purposes was also obtained on 29/9/2015 from the Deputy Commissioner, Bangalore. Therefore, this transaction of the sale of immovable property is subject to capital gain. As no information is forthcoming, the learned assessing officer treated 15% of the sale consideration of ₹ 10,605,000 as cost of acquisition and on sale consideration of ₹ 10,605,000 computed long-term capital gain of ₹ 9,014,250. 6. The assessee preferred an appeal before the learned CIT – A and in form number 35 the email address at which the notices to be served was shown as [e-mail]. In the statement of the facts detailed reason were stated that before the learned assessing officer no proper opportunity was granted and further on the merits it was stated that assessee has purchased an agricultural land on 19/05/2006 and the assessee has sold the agricultural land to the educational Institute on 22/6/2015 for a sale consideration of ₹ 14,098,950. The assessee has received a substantial part of sale consideration of ₹ 100 Lacs and has delivered the possession of the land and original documents pertaining to the title of the property. At the request of the purchaser, the assessee applied for change of land use for educational purposes and the purchaser has obtained the change of Printed from counselvise.com ITA No.22/Bang/2025 Page 4 of 7 land use on 29/9/2015. The purchaser has got the land registered in their favour by executing the sale deed on 16/10/2015. Therefore, the assessee has only sold the agricultural land which is not chargeable to tax as capital gain. 7. The learned and CIT – A in paragraph number 3.1 of his order has tabulated that 5 opportunities was granted to the assessee but none of them have been availed of and therefore the assessee has no information to offer and does not want to prosecute the appeal and therefore same was dismissed. 8. The assessee aggrieved with the same is in appeal before us and has filed a paper containing 32 pages. It was stated that absolute sale deed was executed on 19/05/2006 which is placed at page number 2 – 11 of the paperbook which was purchase by the assessee from 3 different persons. As per the recital it is clearly stated that assessee is a cultivator of the land. Further in absolute sale deed dated 16/10/2015 placed at page number 12 – 29 of the paperbook to show that the assessee has sold an agricultural land but as mentioned in the sale deed it is non- agricultural land, converted by the assessee and to support his case the assessee also produced an affidavit of the buyer stating that they have purchased the agricultural land on 22/6/2015 and subsequent to the purchase of the above land where they have applied for the change of land use from agricultural to education purposes in name of the trust. Thus, the claim of the assessee that impugned properties sold is the agricultural land. To support the case of the assessee, the learned Printed from counselvise.com ITA No.22/Bang/2025 Page 5 of 7 authorised representative relied upon the decision of the coordinate bench in ITA number 1464/Bang/2008 for assessment year 2005 – 06 dated 30 December 2009, WTA number 34 – 36/Bang/2014 for assessment year 2005 – 06 and 2007 – 08 dated 16/10/2015. On the other technical issues, the assessee challenged that the notice issued under section 148 of the Act is invalid as the reason stated therein are vague and without any application of mind. He also challenged the sanction under section 151 of the Act. On the notice by the learned CIT – A, he submitted that assessee has submitted the email addresses and stated that the notices /communication may be sent on the email. However, despite this, no email was sent by the learned CIT – A and all the notices were issued on the ITBA-portal. Therefore, the order passed by the learned CIT appeal is without giving any opportunity to the assessee. 9. The learned departmental representative vehemently supported the orders of the learned lower authorities and submitted that the assessee has not submitted any details before the Ld. lower authorities as well as before the learned CIT – A and therefore the addition is correctly made. It was further stated that the assessee has categorically sold non- agricultural land and therefore the capital gain is chargeable to tax in the hands of the assessee. He submitted that all these documents submitted by the assessee before the Tribunal are submitted for the first time and they have not been looked into by the learned lower authorities. Therefore, issue cannot be decided now, without giving an opportunity to the learned lower authorities. Printed from counselvise.com ITA No.22/Bang/2025 Page 6 of 7 10. We have carefully considered the rival contention and perused the orders of the learned lower authorities. We are concerned with the appeal order of the learned CIT – A. In form number 35 the assessee has given a categorically an email address and stated in affirmative that the notices may be sent through email. However, the order of the learned CIT – A does not speak about any opportunity granted to the assessee by sending the notices through email. The learned CIT – A has categorically noted that all notices were issued in ITBA portal. Therefore, all the five opportunities granted by the learned CIT – A is not in accordance with the law. None of the notices were shown to have been sent to the assessee through email. Therefore naturally, the order of the learned CIT – A is passed ex parte without giving any opportunity of hearing to the assessee and therefore not sustainable. 11. Before the learned assessing officer, the assessee has not provided any information, assessee also even did not respond to the notices under section 148 of the Income Tax Act. The reason stated by the assessee that notice under section 148 of the Act was not found on the assessee and the reasons recorded and sanction is also not proper. However, before us the assessee has submitted the deed of purchase and sale of the impugned property along with the affidavit of the purchaser. Without going into the merits of the case, as the learned AO as well as the learned CIT – A have both decided the issue ex parte, in the interest of the justice, we restore the whole issue back to the file of the learned assessing officer with a direction to the assessee to substantiate its case Printed from counselvise.com ITA No.22/Bang/2025 Page 7 of 7 that capital gain on sale of the impugned property is not chargeable to tax in the hands of the assessee. 12. Thus, deciding all the grounds of appeal, we restore the whole appeal back to the file of the learned assessing officer with a direction to the assessee to substantiate its claim and the learned assessing officer may examine the detail, carry out the necessary enquiries, and then decide the issue in accordance with the law after giving an opportunity of hearing to the assessee. 13. In the result appeal filed by the assessee is allowed for statistical purposes. Pronounced in the open court on this 01st day of September, 2025. Sd/- Sd/- ( SOUNDARARAJAN K. ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 01st September, 2025. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "