NATARAJAN PRABHU,KANCHIPURAM vs. ITO, KANCHIPURAM

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ITA 2332/CHNY/2026Status: DisposedITAT Chennai29 June 2026AY 2015-164 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) did not comply with the provisions of Section 282 of the Act regarding service of notice. The delay in filing the appeal before the CIT(A) was condoned, and the matter was restored for re-hearing.

What were the facts?

The assessee filed a return after receiving a notice under Section 148 for selling property. The Assessing Officer made additions for disallowance of cost of acquisition and deduction under Section 54F. The appeal before the CIT(A) was dismissed due to a delay of 599 days.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without adjudication on merits due to delay, and if the service of notice was proper as per Section 282.

Which sections of the Income-tax Act were involved?

Section 148,Section 54F,Section 282

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. 2332/Chny/2026 ननिाारण वर्ा /Assessment Years: 2015-16 Natarajan Prabhu v. The Income Tax Officer, Old No.42, New No.52, Ward-1, Kumar Street, Kancheepuram, Kancheepuram. Tamil Nadu-631 501. [PAN: AWTPP6028L] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Padmanabhan, Advocate, 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) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’) dated 20.04.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2015- 16.

GROUNDS OF APPEAL 1. That the order of the learned Commissioner of Income Tax (NFAC), Delhi ("hereinafter referred to as Ld. CIT(A) dated 20.04.2026 is without jurisdiction and is opposed to the principles of law, weight of evidence, probabilities, equity, natural justice, fair play and the facts and circumstances of the case of the appellant. 2. The Ld. CIT (A) is not justified in dismissing the appeal of the appellant without adjudication on the merits of the case.

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ITA No.2332/Chny/2026 (2015-16) Natarajan Prabhu 3. The Ld. CIT (A) was sending the notice to the appellant is wrong email id which is not in operation by the appellant. The said email id created and used by previous tax consultant at Kancheepuram.

4.

That the Ld. CIT (A) has not condone the delay for admitting the appeal proceedings. Though the appellant submitted affidavit for condonation petition relevant to medical issues for psychiatrist disorder and produced medical certificate during the period of time.

5.

That the Ld. CIT(A) has erred in confirmed the order of A.O. for not allowing the deduction of cost of acquisition and indexed cost of acquisition amounting to Rs. 44,06,272/- without any basis relevant to the appellant facts of the case during the year.

6.

For that the LD. CIT (A) erred in confirming the order of A.O. for not allowing the exemption u/s. 54 of the Income Tax Act, 1961 of Rs. 21, 00,000/- for construction of residential property claimed in the return of income.

7.

That the appellant craves for the permission of the Hon'ble Income Tax Appellate Tribunal to add, delete or amend the grounds of appeal hereinabove before or during the course of hearing of the appeal.

PRAYER

For these grounds and such other grounds that may be urged before or during the hearing of the appeal it is most humbly prayed that the Hon'ble Tribunal may be pleased to a. Set aside the order passed by NFAC for condoning the delay for admitting the appeal and remit the case to the file of the Assessing Officer. b. Pass such other orders as may deem fit. 2. The brief facts of the case are that the assessee was amongst the non-filers of return u/s. 139 of the Act. The revenue was in possession of certain information through insight portal of the department that the assessee had sold property worth Rs. 70 Lacs. In view of this a notice u/s. 148 of the Act was issued on 01.04.2022. In response to the same the assessee filed a return on 18.04.2022 declaring total income at Rs. 5, 44,540/-. Ultimately, the case of the assessee was assessed after making additions of Rs. 44,06,272/- and Rs. 21 Lacs on account of disallowance of cost of acquisition and disallowance of deduction claimed u/s. 54F of the Act respectively. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee on the

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ITA No.2332/Chny/2026 (2015-16) Natarajan Prabhu ground of delay, as the appeal filed before the Ld. CIT (A) was time barred by 599 days.

3.

The assessee being further aggrieved with this order, preferred the present appeal before us. We have gone through the order of the AO, order of the Ld. CIT (A) and submission of the assessee alongwith grounds taken before us. It is observed that the assessee fully participated before the AO during the assessment proceedings and there was a delay in filing of appeal before the Ld. CIT (A), which the assessee tried to explain as discussed in para 2.7 and 2.8 of the Ld. CIT (A)’s order. In this context, we deem it fit to mention that although the assessment order was duly communicated to the assessee through electronic means on registered e- mail as per Rule 127 of the Income Tax Rules, 1962, still, the provisions of section 282 of the Act can’t be ignored and has to be complied with and the same has not been complied here in this case. To strengthen our view we further relied upon following judicial pronouncements as under: [2024] 160 taxmann.com 629 (P&H) Munjal BCU Centre of Innovation and Entrepreneurship v. CIT (Exemptions), wherein the Hon’ble High Court held as under: “The provisions of section 282(1) and rule 127(1) of the Income-tax Rules, 1962 provides for a method and manner of service of notice and orders. [Para 7] It is essential that before any action is taken, a communication of the notice must be in terms of the provisions as enumerated. The provisions do not mention of communication to be 'presumed' by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a Company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed. [Para 8] Having noticed as above, it is viewed that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under section 12A(1)(ac)(iii) and as he was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter. [Para 9]” [2022] 143 taxmann.com 397 (Jhar.) Prakash Kumar Pasari v. Union of India

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ITA No.2332/Chny/2026 (2015-16) Natarajan Prabhu 4. Further, the past conduct of the assessee is also not found to be casual before the AO and he tried to explain the transactions best to his capabilities and knowledge. Hence, the assessee can’t be categorized as casual in nature and non- serious assessee. In view of this the delay in filing of the appeal before the Ld. CIT (A) is condoned and the matter is restored back to the file of the Ld. CIT (A) for re- hearing after giving the assessee a proper opportunity of being heard as prescribed in section 282 of the Act read with Rule 127 of the Income Tax Rules, 1962. The assessee is also directed to be vigilant enough during the appellate proceedings before the First Appellate Authority without fail and seeking any adjournment. In the result, grounds raised by the assessee are allowed for statistical purposes.

5.

In view of the above, the appeal of the assessee is allowed for statistical purposes with the observations and directions made (supra). 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 K Digitally signed by K BABU 5. गार्ड फाईल/GF BABU Date: 2026.07.01 11:40:14 +05'30'

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