C.R. PARTHIBAN,CHENNAI vs. INCOME TAX OFFICER, NUNGAMBAKKAM

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ITA 2377/CHNY/2026Status: DisposedITAT Chennai29 June 2026AY 2012-20135 pages
AI SummaryDismissed

What did the Tribunal hold?

The ITAT held that the revisionary order passed under Section 263, which directed the withdrawal of Section 54 deduction, had attained finality. The AO's subsequent order was merely implementing these affirmed directions.

What were the facts?

The assessee's appeal was dismissed in limine by the CIT(A) for seeking enforcement of a previous ITAT decision, which was beyond the CIT(A)'s scope. The assessee then appealed to the ITAT, raising grounds related to Section 54 exemption.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits, and whether the assessee was entitled to Section 54 exemption when the underlying revisionary order had attained finality.

Which sections of the Income-tax Act were involved?

Section 54,Section 250,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 23.06.2026Pronounced: 29.06.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 16.01.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2012-13.

ITA No.2377/CHNY/2026 - 2 - C R Parthiban 2. There is a delay of 25 days in filing the appeal before the Tribunal. The assessee has filed an application for condonation of delay stating therein the reasons for the delay. The reason stated is that, the assessee is not aware of online process and hence, unaware of the appellate order being passed. On perusal of the reasons stated, we are of the view that no latches can be attributed to the assessee as there is sufficient cause for belated filing of this appeal. Hence, we condone the delay and proceed to dispose off the appeal on merits.

3.

At the outset, we notice that the First Appellate Authority has dismissed the appeal in limine by observing as under:- “Thus, it appears that the appeal was not filed against any order passed by the AO u/s 143(3) r.w.s. 263 or any other order passed by the AO. The appellant apparently filed the appeal seeking enforcement of Hon’ble ITAT’s decision which is beyond the scope of powers and authority of the first appellate authority.”

4.

Aggrieved, the assessee is in appeal before us raising the following grounds:- 1. The order passed by the Learned CIT(A), NFAC under section 250 is bad in law, contrary to facts and liable to be set aside. 2. The Learned CIT(A) has erred in dismissing the appeal as defective without adjudicating the issue on merits, which is illegal and against settled principles of law. 3. The Learned CIT(A) has failed to appreciate that the appellant is entitled to exemption under Section 54 of the Income Tax Act. 4. The Learned CIT(A) and Assessing Officer have erred in restricting the exemption under Section 54 to only one residential unit, without appreciating the facts and judicial precedents. 5. The authorities below have failed to consider that the appellant has invested the capital gains in purchase of land and construction of multiple residential flats, which together constitute a residential house property. 6. The Learned CIT(A) has not appreciated that the term “a residential house” under Section

ITA No.2377/CHNY/2026 - 3 - C R Parthiban 54 has been judicially interpreted to include multiple residential units, especially when constructed on the same plot. 7. The Learned CIT(A) has failed to consider the intention of the legislature, which is to grant exemption when capital gains are reinvested in residential property. 8. The Learned CIT(A) has violated principles of natural justice by not properly examining the facts and evidences submitted by the appellant. 9. The appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing.

5.

The Ld.AR relied on the grounds raised. On the other hand, the Ld.DR supported the orders of the AO & FAA.

6.

We have heard the rival submissions and perused the materials available on record. The present appeal arises from the order passed by the AO u/s.143(3) r.w.s. 263 of the Act dated 28.09.2021, giving effect to the directions issued by the PCIT u/s. 263 of the Act. A perusal of the assessment order clearly reveals that the PCIT, vide order dated 31.03.2017 passed u/s. 263 of the Act, had specifically directed the AO to withdraw the deduction claimed by the assessee under section 54 of the Act. During the course of hearing, the Bench sought clarification from the Ld. AR as to whether the order passed by the PCIT u/s. 263 had been challenged. Pursuant thereto, the assessee produced a copy of the Tribunal's order in ITA No.1023/CHNY/2017 dated 31.03.2022. On perusal of the said order, we find that the Tribunal had dismissed the appeal filed by the assessee and upheld the revisionary order passed by the PCIT u/s. 263 of the Act. The Tribunal had categorically held that the assessee was not entitled to the deduction claimed u/s. 54 of the Act.

ITA No.2377/CHNY/2026 - 4 - C R Parthiban Once the revisionary order passed u/s. 263 has attained finality and the specific directions contained therein have been upheld by the Tribunal, the consequential order passed by the AO giving effect to such directions cannot be independently challenged on the very issue which stood concluded by the order u/s. 263. The AO, while passing the impugned order, has merely implemented the directions issued by the PCIT, which have already been affirmed by the Tribunal. It is also an admitted position that the assessee has accepted the Tribunal's order dated 31.03.2022 and has not brought on record any material to show that the same has been reversed or modified by any higher forum. In these circumstances, we find no merit in the present appeal. Accordingly, the appeal filed by the assessee is dismissed.

7.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 29th June,2026 at Chennai.

Sd/- Sd/- (एस.आर. रघुनाथा) (जॉज� जॉज� के) (S.R. RAGHUNATHA) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 29th June, 2026 RSR, Sr.PS

ITA No.2377/CHNY/2026 - 5 - C R Parthiban आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.07.02 09:51:31 +05'30'

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