Smt. Parvathamma Vs ITO (ITAT Bangalore)
Bangalore ITAT Restores Section 50C & Section 54F Issues; CIT(A) Cannot Dismiss Appeal for Non-Prosecution
The Bangalore ITAT held that the CIT(A) was not justified in dismissing an appeal merely for non-appearance of the assessee without examining the issues on merits. The Tribunal observed that the assessee had raised specific objections regarding the application of section 50C and denial of section 54F exemption, which required adjudication on merits.
The assessee had sold a property for ₹1.56 crore, whereas the Assessing Officer adopted the stamp duty value of ₹1.87 crore under section 50C. The Tribunal noted that the assessee had furnished a registered valuer’s report disputing the stamp duty valuation. Once such an objection was raised, the Assessing Officer ought to have followed the statutory procedure and referred the matter to the Departmental Valuation Officer (DVO) instead of mechanically adopting the stamp duty value.
On the claim under section 54F, the assessee contended that the sale proceeds had been invested in the purchase and construction of a new residential house within the prescribed period. The Tribunal noted the assessee’s reliance on the Karnataka High Court decision in CIT v. K. Ramachandra Rao (56 taxmann.com 163), which held that exemption cannot be denied merely because the amount was not deposited in the Capital Gains Account Scheme before the due date, if the investment was otherwise made within the stipulated period.
Considering that the assessee had furnished valuation reports and supporting documents before completion of assessment, the Tribunal restored both issues to the Assessing Officer for fresh adjudication. The AO was directed to examine the objection to section 50C valuation, consider reference to the valuation authorities as required by law, and reconsider the section 54F claim in the light of the Karnataka High Court judgment. The appeal was accordingly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
Smt. Parvathamma, the Assessee/Appellant, filed ITA No. 2075/Bangalore/2025 for Assessment Year 2016–17 against the appellate order dated 29.07.2025 passed by the National Faceless Appeal Centre, Delhi [Ld. CIT(A)]. By that order, the Ld. CIT(A) dismissed the Assessee’s appeal against the assessment order dated 17.12.2018 passed under section 143(3) of the Income-tax Act, 1961, by the Income Tax Officer, Ward–2(2)(2), Bangalore.
