SRIKANTHA SURYADEVARA,GUNTUR vs. INCOME TAX OFFICER, WARD-1, TENALI

PDF · subscribers
ITA 22/VIZ/2026Status: DisposedITAT Visakhapatnam10 July 2026AY 2016-1711 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay, imposing a cost on the assessee. It held that the mistakes regarding the cost of acquisition were apparent from the record, and the issue of Section 54F deduction was not properly adjudicated by the lower authorities.

What were the facts?

The assessee filed an appeal with a significant delay of 433 days, attributing it to a misunderstanding with his Income Tax Practitioner. The core issue was the rejection of a rectification petition under Section 154, which sought to correct the cost of acquisition for capital gains and claim benefit under Section 54F.

What were the issues?

Whether the delay in filing the appeal should be condoned, and whether the rejection of the rectification application under Section 154 for capital gains computation and Section 54F benefit was justified.

Which sections of the Income-tax Act were involved?

Section 154,Section 54F,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

आयकर अपीऱीय अधिकरण, विशाखापत्तनम पीठ, विशाखापत्तनम INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री उदयन दास गुप्ता, माननीय न्याययक सदस्य एिं श्री ओम्कारेश्िर धिदारा, माननीय ऱेखा सदस्य SHRI UDAYAN DAS GUPTA, HON’BLE JUDICIAL MEMBER AND SHRI OMKARESHWAR CHIDARA, HON’BLE ACCOUNTANT MEMBER

ITA No.22/Viz/2026 निर्धारण वर्ा/Assessment Year:2016-17) SRIKANTHA SURYADEVARA INCOME TAX OFFICER, WARD-1 D.NO.20-9-9/1, GOLLAMUDIVARI STREET, D.NO.19-15-47, OPP SAI CHINARAVURU TENALI, Vs. BABA TEMPLE, BOSE ROAD, GUNTUR-522201, TENALI ANDHRA PRADESH TENALI-, ANDHRA PRADESH अपीलधर्थी/Appellant प्रत्यथी /Respondent

Permanent Account Number of BXXPS9203C Assessee:

अपीलाथी द्वारा/Appellant represented by: Shri C Subrahmanyam, CA प्रत्यथी द्वारा/Respondent represented by: Dr. Aparna Villuri, Sr AR सुनवाईकीतारीख/Date of conclusion of hearing: 15-Jun-2026 घोषणाकीतारीख/Date of pronouncement: 10-Jul-2026 आदेश / ORDER PER SHRI OMKARESHWAR CHIDARA, HON’BLE AM : This appeal is filed by the Assessee against the order of Ld. CIT(A), NFAC, DELHI vide DIN:ITBA/NFAC/S/250/2024- 25/1069276448(1) dated 30-Sep-2024 for the Assessment Year 2016-17 arising from the order passed by the Ld.AO u/s 154 of the

ITA No.22/Viz/2026 Srikantha Suryadevara Income Tax Act, 1961 (“the Act”) dated 16.06.2023 for the A.Y.2016- 17.

2.

In the above cited appeal, the main grievance of the appellant is that the Ld.CIT(A) has confirmed the action of the Ld.AO and rejected the rectification petition u/s 154 of the Act, stating that the same does not constitute a „mistake apparent from record‟, with regard to the adoption of correct cost of acquisition while computing capital gains and giving benefit u/s 54F of Income Tax Act. Before adjudicating the issue relating to rectification application filed by the appellant u/s 154 of the Act, the Bench has observed that the appeal was filed before the ITAT with a delay of 433 days. Hence, the Ld.AR of the appellant was requested to argue the case on admission of the appeal, because of huge delay of 433 days. The Ld.AR of the appellant has stated that a petition for condonation of delay was already submitted before the Bench along with an affidavit of assessee and also the affidavit of Income Tax Practitioner (“ITP”) who was representing the case of the assessee before the lower authorities. The crux of the argument of the Ld.AR with regard to the delay is that the appellant has approached the ITP, Shri Machavarapu Chakravarthi and requested him to file an appeal on the assessment. The ITP assured the assessee that he would take care of the matter and file an appeal by taking

ITA No.22/Viz/2026 Srikantha Suryadevara necessary assistance from Chartered Accountant and in fact, the ITP informed the assessee that the written submissions are also filed before the Ld.CIT(A) and hence the assessee believed the ITP and did not independently follow up the matter. But the ITP did not file appeal and meanwhile in the month of December, 2025, the assessee received a communication from the Income Tax Department that the Ld.CIT(A) has already passed an order and came to know that no further appeal was preferred to the ITAT till now. The ITP concerned has informed the assessee that due to some personal problems, he could not properly pursue the matter relating to the appeal. The Ld.AR of the appellant has also stated that the assessee was under the bonafide impression that the appellate order would be communicated by post from the office of Ld.CIT(A), because the address of the assessee has been mentioned in Form No.35, at Column No.17 while filing the appeal, but the order of the Ld.CIT(A) was uploaded on the system, which is not known to the assessee. After coming to know about the demand raised against him, the appellant has filed this appeal before the ITAT and consequently, there is a delay of 433 days in filing the appeal before ITAT. Since the delay was neither deliberate nor intentional, but occurred due to a genuine and bonafide misunderstanding and lack of communication regarding the outcome of the appellate proceedings, the Ld.AR of the appellant

ITA No.22/Viz/2026 Srikantha Suryadevara has requested the Bench to condone the delay and pass order on merits, because, the delay occurred due to the reasons beyond the control of the appellant and there is no malafide intention. Ld.AR of the appellant has also stated that an affidavit of appellant to this extent and affidavit of ITP was also submitted to the Bench for kind perusal. In the affidavit of ITP, it was stated that he was under bonafide impression that communication / notices from the Department were being served on the assessee at the address mentioned in Column 17 of Form No.35, but he did not follow up with the assessee regarding service of such communication. The ITP in his affidavit has stated that the delay caused is neither intentional nor deliberate in view of the above facts. The appellant also made similar averments in his affidavit.

3.

The Ld.DR opposed the condonation petition filed with regard to delay by stating that there are no exact dates as to when the appellant has received the order of Ld.CIT(A) and no reason also was mentioned as to why the appellant has not pursued with the ITP or CA to file further appeal before ITAT. Since the reasons mentioned were very vague and no material evidence was also filed for the arguments, the Ld.DR has argued that the condonation petition filed by the appellant may be dismissed and appeal should not be entertained.

ITA No.22/Viz/2026 Srikantha Suryadevara 4. After hearing both the sides, the Bench decides to condone the delay, even though there are no exact reasons for filing the appeal with such inordinate delay, but the fact remains that the appellant was not served with any physical copy of CIT(A) order to the address mentioned in Column 17 of Form 35 and also acceptance of ITP that partial responsibility lies with him also for not checking the outcome of the appeal. There are several judicial pronouncements to that effect that where an assessee has got a strong case on merits, maximum weightage should be given to take a lenient view with regard to procedural defects as no assessee intends to cause damage to himself and there is no benefit in filing the appeal with delay to any assessee. Anyhow, the delay is quite inordinate, there is negligence on the part of the appellant and ITP also. In view of the same, the Bench decides to condone the delay by levying cost of Rs.50,000/- to be paid to AP State Legal Services Authority within one month from the date of receipt of this order.

5.

Coming to the merits of the case, the appellant has not appeared before the Ld.AO nor did he respond to the notices issued by the Income Tax Department and hence the assessment was completed u/s 144 r.w.s. 144 read with section 144B of the Act. Based on the information available with the Income Tax Department, the Ld.AO has computed the capital gains and

ITA No.22/Viz/2026 Srikantha Suryadevara completed the assessment as there was no compliance from the side of the assessee. After getting the tax demand, the assessee became aware of his tax liability with regard to the Joint Development Agreement entered into by their family members with a builder. Instead of filing of an appeal, the appellant was under the impression that a rectification application u/s 154 would be enough to rectify a defect or mistake, which is apparent from the order of the Ld.AO. Accordingly, the appellant filed a rectification application u/s 154 of the Act and before the Ld.AO, stating that the cost of acquisition taken by the Ld.AO is incorrect and he was also not given the benefit of section 54F, which is his legal right as per the Act. The Ld.AO has rejected both the contentions of the appellant and dismissed the application of rectification, stating that there is no mistake apparent from the record/order and contentions of the appellant will not come under the purview of section 54 of the Act. Since there was no mistake in the assessment order, it was held by the Ld.AO that the rectification application was rejected. The Ld.CIT(A) concurred with the view of Ld.AO by stating that the alleged mistakes of the Ld.AO do not emanate from the assessment order and as there is no mistake apparent from the record, the application u/s 154 was rightly rejected and thus dismissed the appeal of the assessee.

ITA No.22/Viz/2026 Srikantha Suryadevara 6. Aggrieved by the orders of the Ld.AO and the Ld.CIT(A), an appeal was filed before ITAT and same contentions were raised before the ITAT. The Ld.AR of the appellant has argued that the Ld.AO has taken the cost of acquisition without properly verifying the sale deed, where cost of acquisition of immovable property was mentioned. It was submitted that the appellant has committed a mistake in not appearing before the Ld.AO, but pleaded that whatever the legal rights available to the appellant should be given to him as per the Income Tax Act. The Ld.AR has pleaded that the figure of cost of acquisition taken by the Ld.AO is at variance compared to the cost of property purchased by the assessee and copy of sale deed was filed before the Ld.CIT(A). The Ld.AR of the appellant has also stated that the documentary evidence was filed before the Ld.CIT(A) to demonstrate the correct figure of cost of acquisition. But the Ld.CIT(A) did not take into consideration evidences filed before him and denied the legal rights accrued to the appellant. The submission of the Ld.AR of the appellant is only to adopt correct figure of cost of acquisition while computing the capital gains. The correct computation of capital gain was already submitted before the Ld.CIT(A) and the same was in fact incorporated in the order of the Ld.CIT(A). While adjudicating the matter based on the evidences filed before the Ld.CIT(A), this First Appellate Authority has simply dismissed the appeal of the

ITA No.22/Viz/2026 Srikantha Suryadevara assessee by stating that these aspects would not come under the purview of section 154, which deals with rectification of mistake apparent from record. Similarly, the Ld.CIT(A) did not consider the plea of the appellant that he is entitled to the benefit/deduction u/s 54 of the Act to the extent of one flat and this statutory benefit is conferred on all the assessees and hence the assessee should not be denied of his legal right.

7.

The Ld.DR supported the Orders of the lower authorities. The Ld.DR has also pointed out that the assessee did not respond to the notices issued by the Ld.AO and did not file any evidence with regard to the cost of acquisition, copy of sale deeds and the consequent capital gains which will arise. The Ld.DR has also pointed out that the assessee neither filed the return of income also despite notices were issued by the Ld.AO, nor did the appellant cooperate with Department by filing relevant evidences and hence the assessment was completed only based on the information available in the Income Tax portal and hence this appeal on rejection of 154 application does not have the legs to stand. It was also argued that section 154 comes into play to a very limited extent and unless there is any mistake apparent from record, the remedy is not available to the appellant and hence the lower authorities have correctly rejected the application of the assessee

ITA No.22/Viz/2026 Srikantha Suryadevara u/s 154 of the Act. As far as the legal right accrued to the assessee with regard to the benefit of section 54F, the Ld.DR has pointed out that the assessee has neither filed return of income nor claimed the benefit u/s 54F and in view of the decision of Hon‟ble Supreme Court in the case of Goetz (India) Ltd., reported in 157 taxman.com 1 (SC)., the assessee is not eligible for benefit u/s 54F as there is no claim in the return of income.

8.

After hearing both the sides, the Bench decides to allow the appeal of the assessee, subject to verification of the arithmetic by the Ld.AO. The Bench holds the view that the mistakes are apparent from record, because, cost of acquisition was taken wrongly by the Ld.AO while computing the capital gain tax. No doubt, the assessee has not filed the required documents before the Ld.AO and also did not appear before Ld.AO, but at the same time, what is to be seen is all the documents and workings relating to capital gains were submitted before the Ld.CIT(A) and the same were in fact incorporated in the order of the Ld.CIT(A). The main contention of the appellant is that the cost of acquisition was taken at Rs.5,53,574/-, whereas, the correct cost of acquisition as per sale deeds comes to more than Rs.13 lakhs as per the table mentioned in the order of the Ld.CIT(A) at page 7. The correct computation of capital gains was neither examined by the Ld.AO

ITA No.22/Viz/2026 Srikantha Suryadevara nor the Ld.CIT(A). In view of the same, the issue is remitted back to the file of the Ld.AO and he is directed to get all the documents relating to cost of acquisition of immovable properties and compute the correct capital gains after giving opportunity to the assessee. As far as the deduction u/s 54F is concerned, the eligibility or otherwise may be examined by the Ld.AO and if all the conditions are fulfilled as per the statute, the same may be allowed to the assessee. The claim relating to a new deduction while filing of return of income cannot be entertained by AO in the absence of claim in return of income in view of the decision of Hon‟ble Supreme Court in the case of Goetz Goetz (India) Ltd. (supra), but the Ld.CIT(A) ought to have taken a call on the allowability of deduction u/s 54F, but there was no adjudication on this issue by the First Appellate Authority. As both the issues relating to cost of acquisition and deduction u/s 54F are remitted back to the file of the Ld.AO, he is directed to take into consideration all the facts and documents filed by the appellant and pass an order afresh, after giving an opportunity to the assessee.

9.

In the result, appeal of the assessee is allowed for statistical purpose.

ITA No.22/Viz/2026 Srikantha Suryadevara Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962 by placing the details on the notice board on 10th July, 2026.

Sd/- Sd/- (उदयन दास गुप्ता) (ओम्कारेश्िर धिदारा) (UDAYAN DAS GUPTA) (OMKARESHWAR CHIDARA) न्याययक सदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Visakhapatnam dated 10.07.2026. L.Rama/Sr.PS Copy to: SRIKANTHA SURYADEVARA, D.NO.20-9-9/1, GOLLAMUDIVARI 1 STREET, CHINARAVURU TENALI, GUNTUR-522201, ANDHRA PRADESH INCOME TAX OFFICER, WARD-1, D.NO.19-15-47, OPP SAI BABA TEMPLE, 2 BOSE ROAD, TENALI, TENALI-, ANDHRA PRADESH 3 THE PCIT, GUNTUR 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE TRUE COPY LOKIREDDI RAMA cn=LOKIREDDI RAMA c=IN o=INCOME TAX APPELLATE TRIBUNAL ou=INCOME TAX APPELLATE TRIBUNAL 2026-07-10 11:43+05:30 ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., VISAKHAPATNAM

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →