SH. K.PONDURAI,CHENNAI vs. ACIT, CHENNAI

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ITA 2179/CHNY/2026Status: DisposedITAT Chennai29 June 2026AY 2012-136 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the first appellate authority wrongly dismissed the appeal in limine due to delay, without considering the merits and the procedural lapses. The intimation under section 143(1) was deemed liable to be quashed.

What were the facts?

The assessee filed a return of income, and an intimation under section 143(1) was issued with significant adjustments without proper service. The assessee filed rectification applications under section 154, which remained unaddressed. Subsequently, an appeal was filed with a considerable delay.

What were the issues?

Whether the first appellate authority was justified in dismissing the appeal solely on the ground of delay without considering the merits and procedural irregularities in the section 143(1) intimation and the subsequent handling of rectification applications.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 282,Section 156,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 18.06.2026Pronounced: 29.06.2026

आयकर अपीलीय अधिकरण ‘सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री एबी टी. वर्की, न्याययक सदस्य एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 2179/Chny/2026 ननिाारण वर्ा /Assessment Years: 2012-13 Shri K. Pondurai, v. The Assistant Commissioner of No.3/4-A, Old Mahabalipuram Road, Income Tax, Kelambakkam, Chennai-603 103. Non-Corp Ward-22(1), [PAN: AAEPP8065A] Chennai. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. J. Prabhakar, C.A, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Chilaka Marthi Vijay Raju, Addl. CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 18.06.2026 घोषणाकीतारीख /Date of Pronouncement : 29.06.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A), Addl. / JCIT (A)-1, (hereinafter referred as the ‘Ld. CIT(A)’) Ahmedabad, dated 20.02.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2012-13.

GROUNDS OF APPEAL 1. The learned JCIT (A)-1 Ahmedabad is not justified in dismissing the appeal in limine on the pretext that the delay in filing the appeal is on account of alleged indifference on the part of the appellant. 2. The learned JCIT (A) failed to notice that the demands raised qua the impugned intimation came to his notice only on the basis of a recovery notice showing unreconciled outstanding demand framed allegedly under section 143(1) which was not served upon him.

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ITA No.2179/Chny/2026 (2012-13) Shri K. Pondurai 3. The learned appellate authority is not justified in ignoring the legal frame work that a rectification petition filed against the unilateral adjustment in 143(1) (a) intimation ought to have been disposed of within 4 years of its being brought to the notice of the Assessing Officer and failure thereunder to dispose ipso facto deems that the said rectification application is allowed.

4.

The learned appellate authority is not justified in adopting a mundane approach to condone the delay in filing the appeal without looking into the sum and substance of the illegal intimation framed in which the total income determined is unreconcilable to the income disclosed in the return of income filed for which no explanatory information is available along with the intimation framed.

5.

In any event, the delay of 3071 days in filing the appeal is a matter of fact based on cogent evidence as to deliberate delay in addressing the rectification petition filed to redress an illegal intimation framed and the insistence upon cogent chronology for the delay on a year-to- year basis is a pedantic approach by the first appellate authority to ignore the ex-facie illegality of the order impugned.

6.

The act of the first appellate authority to ignore the merits of the appeal and looking at the delay in filing the appeal as a monumental aberration and unpardonable sin is unbecoming of a quasi-judicial authority to look into facts and render justice on the issues raised in the appeal.

7.

The JCIT(A) is not justified in sustaining the illegal determination of total income at Rs. 43,18,090/- and determining an alleged tax at special rates at Rs. 39,14,208/- which is unexplained ex-facie in the intimation framed.

8.

The JCIT(A) erred in omitting to notice that the alleged special rate of tax at Rs. 39.14 Lakhs on an imaginary returned income of Rs. 43.18 Lakhs cannot result in a paltry tax demand of Rs. 6,09,519/- along with attendant interest under section 234B at Rs. 75,336/- and interest under section 234C at Rs. 85/-

9.

Your appellant craves the indulgence of the Hon'ble Income Tax Appellate Tribunal to raise additional/supplemental grounds of appeal to buttress the case of the appellant.

10.

For these grounds and for such other grounds that may be adduced at the time of hearing, it is prayed that the unilateral and unreconciled intimation framed under section 143(1) (a) be cancelled and the income returned in the ITR filed be restored on record.

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ITA No.2179/Chny/2026 (2012-13) Shri K. Pondurai 2. The brief facts of the case are that the assessee filed his return of income on 03.09.2012 declaring total income at Rs. 4,03,883/-. A summary adjustment was carried out u/s. 143(1) of the Act vide intimation dated: 26.03.2013 on a figure of Rs. 43, 18,090/-. The assessee filed an application u/s. 154 of the Act on 02.07.2016 vide page no. 16 of the paper book, although specific section, i.e. section 154 of the Act was not mentioned, but the contents of the application serve the purpose of section 154 of the Act. Thereafter, the assessee again filed an application categorically mentioning section 154 of the Act on 02.01.2017.

3.

As there was no action by the Revenue on application mentioned (supra), the assessee filed an appeal before the Ld. Addl. /JCIT (A)-1, Ahmedabad on 28.12.2024 with a delay of 3071 days considering the date of service of intimation u/s. 143(1) of the Act as 02.07.2016. The Ld. Addl. /JCIT (A)-1, Ahmedabad dismissed the appeal of the assessee in Limine on the ground of unexplained delay in filing of the appeal before him. The assessee being aggrieved with this order of the Ld. Addl. /JCIT (A)-1, Ahmedabad preferred the present appeal before us. We have gone through the intimation issued u/s. 143(1) of the Act vide dated: 26.03.2013 (Received by the assessee on 02.07.2016), order of the Ld. Addl. /JCIT (A)-1, Ahmedabad and submissions of the assessee alongwith grounds taken before us.

4.

It is observed that the adjustments made u/s. 143(1) of the Act was done without giving any opportunity to the assessee and intimation also not served upon him as envisaged in section 282 of the Act. It is only after the assessee orally represented on receipt of demand notice for recovery of Taxes, copy of the same was provided. Thereafter, the assessee filed applications under section 154 of the Act vide dated: 02.07.2016 and 02.01.2017, but no action on the same till date. It’s a classic case of violation of natural justice and citizen’s charter issued by the Central Board of Direct Taxes (CBDT). For sake of ready reference and better clarity on the issue involved, we deem it fit to reproduce the provisions of section 154 of the Act as under: Rectification of mistake. 154.(1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,—

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ITA No.2179/Chny/2026 (2012-13) Shri K. Pondurai (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A; (d) Amend any intimation under sub-section (1) of section 206CB. (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned— (a) may make an amendment under sub-section (1) of its own motion, and (b) Shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee or by the deductor or by the collector, and where the authority concerned is the Joint Commissioner (Appeals) or the Commissioner (Appeals), by the Assessing Officer also.

(3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor or the collector, shall not be made under this section unless the authority concerned has given notice to the assessee or the deductor or the collector of its intention so to do and has allowed the assessee or the deductor or the collector a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. (5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor or the collector, the Assessing Officer shall make any refund which may be due to such assessee or the deductor or the collector. (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee or the deductor or the collector, the Assessing Officer shall serve on the assessee or the deductor or the collector, as the case may be a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section 155 or sub-section (4) of section 186 no amendment under this section shall be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. (8) Without prejudice to the provisions of sub-section (7), where an application for amendment under this section is made by the assessee or by the deductor or by the collector on or after the 1st day of June, 2001 to an income-tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,— (a) making the amendment; or (b) Refusing to allow the claim.

5.

In view of the provisions of section 154 of the Act as reproduced (supra), it can be safely concluded that the Revenue simply brushed aside the applications of the assessee filed u/s. 154 of the Act. Moreover, the first appellate authority also was not justified in dismissing the appeal of the assessee without considering the peculiar facts of the case and harassment the assessee is facing. In similar situation the

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ITA No.2179/Chny/2026 (2012-13) Shri K. Pondurai Hon’ble Jurisdictional high Court in the case of [2025] 171 taxmann.com 305 (Mad.) Northern Arc Investment Managers (P.) Ltd. v. Deputy Director of Income-tax, held as under: “A reading of section 143(1) makes it clear that if there is any corrections, errors, addition or reduction in the ITR of the assessee, the department has to intimate the same to the assessee. In the instant case, the Assessing Officer had intimated the error to the assessee and also directed the assessee to file his reply within a period of 30 days. Thereafter, as per the provisions of the Act, the Assessing Officer is supposed to have considered the said reply and make suitable modifications in the income tax returns as requested by the assessee. However, though the reply was filed by the assessee, the Assessing Officer had not considered the said reply filed by the assessee and issued the impugned intimation. [Para 7] ■ Now, it was submitted by the Assessing Officer that the reply filed by the assessee will be considered at the time of scrutiny of ITR by the Faceless Assessment Officer, which means the Faceless Assessment Officer has to consider the reply and proceed the assessee’s case with double stands i.e., (1) based on the original returns filed by the assessee; and (2) based on the modified returns after considering the reply of the assessee, which would ultimately create unnecessary confusion. [Para 8] ■ In view of the above, since the Assessing Officer had submitted that the reply, which was rejected by the Assessing Officer will be considered at the time of scrutiny and for the interest of justice, High Court is inclined to pass the following orders: i) The Assessing Officers are directed to consider the reply filed by the assessee and accept the returns accordingly. ii) Thereafter, the Faceless Assessment Officer shall proceed further by providing the opportunity of hearing before passing orders in the scrutiny assessment. [Para 9]” 6. In view of the above observations, provisions of section 154(8) of the Act and the decision of the Hon’ble Jurisdictional High Court it is observed that the assessee has suffered a lot in the whole process and rather till date his application filed u/s. 154 of the Act has not been disposed of and in the meantime his appeal before the Ld. Addl. /JCIT (A)-1, Ahmedabad also dismissed on the ground of delay instead of disposing of the same as per law and ignoring the fact of delay in this particular case. The Ld. Addl. /JCIT (A)-1, Ahmedabad was supposed to be lenient and judicious enough in this particular case, as the assessee was running pillar to post for justice. In view of this, as the adjustments u/s. 143(1) of the Act was done at the back of the assessee without giving any opportunity as prescribed in section itself and then further no action as prescribed in section 154(8) of the Act and respectfully following the decision of the Hon’ble Jurisdictional High Court, we are of the considered opinion that intimation issued u/s. 143(1)(a) itself is liable to be quashed and the revenue is directed to accept the return as filed by the

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ITA No.2179/Chny/2026 (2012-13) Shri K. Pondurai assessee. In these terms ground no. 10 raised by the assessee is allowed with above observations and directions.

7.

In the result, the appeal of the assessee is allowed.

Order pronounced on the 29th day of June, 2026, in Chennai.

Sd/- Sd/- (एबी टी. वर्की) (गगन गोयल) (ABY T. VARKEY) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 29th June, 2026. KB आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR 5. गार्ड फाईल/GF K Digitally signed by K BABU BABU Date: 2026.07.01 09:24:19 +05'30'

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