THIRUPATHI RAO NAINENI,KARIMNAGAR V. INCOME TAX OFFICER, WARD-2, KARIMNAGAR

ITA 1258/HYD/2024

AI Insights

The case involves Shri Thirupathi Rao Naineni, who appealed against the order of the CIT (A) sustaining a disallowance of Rs.4,73,23,952 under the head 'Long-Term Capital Gain' for the Assessment Year 2017-18. The reassessment was initiated under section 147 of the Income Tax Act, 1961, based on information that the appellant had not disclosed capital gains from the sale of two immovable properties. The appellant, claiming to be only a General Power of Attorney holder and not the actual owner, failed to substantiate this claim with evidence during the reassessment proceedings. Consequently, the Assessing Officer taxed the appellant's share of the capital gains. The CIT (A) dismissed the appeal due to non-compliance with notices, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26880 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Other Referred Cases: Ashish-Agarwal and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P VINOD
• Keywords: Opportunity of being heard; Corroborative evidences; Fair market value; Capital Gains; Principle of natural justice
• Section: 147; 148

Judgement Text

" ITA No 1258 of 2024 Thirupathi Rao Naineni Page 1 of 4 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A ‘ Bench, Hyderabad Before Shri Laliet Kumar, Judicial Member AND Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No. 1258/Hyd/2024 (िनधाŊरण वषŊ / Assessment Year: 2017-18) Shri Thirupathi Rao Naineni KARIMNAGAR PAN:ACEPN4048D Vs. Income Tax Officer Ward-2 Karimnagar (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri P Vinod, Advocate राज̾ व Ȫारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 03/02/2025 घोषणा की तारीख/Pronouncement: 04/02/2025 आदेश/ORDER Per Laliet Kumar, J.M This appeal filed by the assessee is directed against the order dated 20/09/2024 of the learned CIT (A)-NFAC, Delhi, relating to A.Y.2017-18. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) in sustaining the disallowance of Rs.4,73,23,952/- under the head “Long-Term Capital Gain” made by the Assessing Officer u/s 147 r.w.s 144B of the I.T. Act, 1961. ITA No 1258 of 2024 Thirupathi Rao Naineni Page 2 of 4 3. Facts of the case, in brief, are that the appellant is an Individual. The return of income for AY 2017-18 was not filed by the appellant. Later on, the case was reopened u/s 147 on the basis of information received from the ACIT, Central Circle-1, Hyderabad that the appellant had sold 2 immovable properties along with 3 other co-owners for Rs.5,94,00,000/- and Rs.5.89,50,000/- but the fair market value for stamp duty purpose was determined at Rs.9,90,00,000/- and Rs.9,82,00,000/- respectively. The share of the appellant was Rs.4,93,00,000/- being 1/4th owner, however the appellant had not filed return of income and had not disclosed the capital gains and did not pay the capital gain tax. Notice u/s 148 was issued on 19/04/2021 within the extended time limit as per Taxation and other laws and as per CBDT Notification No.20 dated 31/03/2021 and NotificationNo.38 dated 27/0A/2021. In response, the appellant had filed return of income declaring total income of Rs.3,58,310/- for AY 2017-18 was filed on 18/05/2021 Thereafter, the notice u/s 148 was treated as show cause notice as ger the decision of Hon'ble Supreme Court of India in the case of Ashish-Agarwal and others, order u/s 148A was passed after following prescribed procedure and a notice u/s 148 was issued on 28/07/2022. During rea-assessment proceedings, the appellant had contended that he is not the owner of the property sold and has not received any sale consideration since he was only General Power of Attorney holder. However, the appellant failed to substantiate his claim with supporting evidences, therefore the AO taxed the share of appellant of Rs.4,73,23,952/- under the head long term capital gain. ITA No 1258 of 2024 Thirupathi Rao Naineni Page 3 of 4 4. Aggrieved by the assessment order passed by the AO, the appellant has filed an appeal before the learned CIT (A). Since the assessee failed to comply with the notices issued by the learned CIT (A), the learned CIT (A) dismissed the appeal. 5. Being aggrieved, the assessee is in appeal before the Tribunal. 6. The learned Counsel for the assessee submitted that given an opportunity, the assessee would be in a position to explain his case before the learned CIT (A) with proof. Hence, the learned Counsel for the assessee submitted that, in the interest of justice, the assessee may be given another opportunity of being heard before the learned CIT (A). 7. On the other hand, the learned DR relied upon the orders of the authorities below. The learned DR submitted that the assessee did not comply with the notices issued by the learned CIT (A) to substantiate the claim made in the grounds of appeal with supporting evidences inspite of giving adequate opportunities. Hence the grounds raised by the assessee should be dismissed and the order of the learned CIT (A) should be upheld,. 8. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A). We find that the assessee failed to substantiate his claim made in the grounds of appeal with supporting evidences before the learned CIT (A). Considering the totality of the facts and circumstances of ITA No 1258 of 2024 Thirupathi Rao Naineni Page 4 of 4 the case, and in the interest of natural justice, we deem it appropriate to remand this issue to the file of the learned CIT (A) with a direction to give one more opportunity to the assessee to submit supporting evidences. Needless to say, the assessee shall be given an opportunity to submit all the requisite details and evidences before the learned CIT (A). The assessee is directed to submit all evidences before the learned CIT (A) as and when called for, without seeking any adjournment under any pretext. Since the assessee failed to appear and file the requisite details before the learned CIT (A), we levy a charge of Rs.5000/- on the assessee and the assessee is hereby directed to pay a sum of Rs.5000/- at the Telangana State Legal Aid Authorities at the Hon'ble Telangana High Court within a period of one month from the date of this order and submit necessary payment slip with the Registry. We order accordingly. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 4th February, 2025. Sd/- Sd/- (MANJUNATHA, G.) VICE-PRESIDENT (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 4th February, 2025 Vinodan/SPS Copy to: S.No Addresses 1 Shri Thirupathi Rao Naineni, 1-42, Aasirwada, Bonthakunthapally, Garrepalle, Karimnagar 505186 2 Income Tax Officer Ward 2 Aayakar Bhavan, Near Natraj Theater, Karimnagar 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "