GANDAVARAPU SATHYANARAYANA REDDY,CHENNAI vs. THE INCOME TAX OFFICER, NON CORP. WARD 8(2), CHENNAI, CHENNAI

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ITA 582/CHNY/2026Status: DisposedITAT Chennai27 April 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal based on the date of the assessment order rather than the date of its receipt by the assessee. The matter was restored to the CIT(A) for de novo disposal.

What were the facts?

The assessee failed to file a return of income for AY 2017-18. The Assessing Officer made a best judgment assessment and added cash deposits as unexplained income. The assessee's appeal before the CIT(A) was dismissed as time-barred.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal as time-barred based on the date of the order instead of the date of receipt. Whether penalty proceedings are sustainable in the absence of a valid assessment order.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 142(1),Section 144,Section 250,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES “D” :: CHENNAI

Before: SHRI INTURI RAMA RAO & SHRI S.S.VISWANETHRA RAVI

For Appellant: Mr. R.S.Lakshmi Narayana – Advocate
For Respondent: Mr. ARV Sreenivasan – CIT(DR)
Hearing: 17/03/2026Pronounced: 27/04/2026

आयकर अपीलीय अिधकरण ”डी” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCHES “D” :: CHENNAI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.582/CHNY/2026 �नधा�रण वष� / Assessment Year: 2017-18 Gandavarapu Sathyanarayana V The Income Tax Officer, Reddy, s Non-Corp. Ward-8(2), Flat No.B-1, Plot No.258, Rajiv Chennai. Nagar, Pillaiyar Koil Street Extn, Pallikuppam, Ayyapakkam, Chennai – 600077. PAN: AQMPR4401J Appellant / Assessee Respondent / Revenue Assessee by Mr. R.S.Lakshmi Narayana – Advocate Revenue by Mr. ARV Sreenivasan – CIT(DR) Date of hearing 17/03/2026 Date of pronouncement 27/04/2026 आदेश/ ORDER PER INTURI RAMA RAO, AM : This appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], Delhi dated 11.12.2025 passed under section 250 of the Income Tax Act, 1961 for the A.Y.2017-18.

2.

The Assessee raised the following grounds of appeal : “1. That the Learned Commissioner of Income-tax (Appeals), NFAC, Delhi ("Ld. CIT(A)") erred in law in dismissing the appellant's appeal as time- barred. without appreciating that the impugned penalty order was digitally signed on 31.03.2025 and served on the appellant on 01.04.2025, and consequently. there was no delay in filing the appeal.

2.

That the Ld. CIT(A) ought to have quashed the penalty proceedings in view of the fact that the assessment order itself had been set aside and remanded to the Assessing Officer for de novo assessment, as directed by the Hon'ble Income Tax Appellate Tribunal, Chennai in ITA No.3014/Chny/2024

3.

That the Ld. CIT(A) erred in dismissing the appeal, failing to appreciate that in the absence of an assessment, the imposition of a penalty is legally unsustainable.

Without prejudice to the above, the following grounds of appeal are raised:

4.

That the Ld. CIT(A) erred in confirming the levy of penalty of Rs.9,06,433/- u/s.271AAC(1) of the Act.

5.

That the appellant respectfully reserves the right to add, modify, alter, or withdraw any of the above grounds of appeal at the time of hearing.”

3.

Briefly, the facts of the case are that the appellant is an Individual. The appellant had not filed the Return of Income under the provisions of Section 139(1) of the Act for the Assessment Year 2017-18. Based on the information that the appellant made a substantial cash deposits in the bank accounts during the previous year relevant to assessment year 2017-18. The Assessing Officer formed an opinion that income got escaped assessment to tax. Hence, the Assessing Officer issued a notice u/s.142(1) of the Act on 14.03.2018 calling upon the appellant to file the Return of Income. The appellant neither complied with the notice u/s.142(1) of the Act, nor the show cause notice u/s.144 of the Act. In the circumstances, the Assessing Officer has proceeded with framing of the best judgment assessment u/s.144 of the Income Tax Act of Rs.1,51,07,226/-. While doing so, the Assessing Officer made addition on cash deposits in the bank account of Rs.1,51,01,226/- as unexplained money of the appellant.

4.

Being aggrieved by the above assessment order, an appeal was filed before the ld.CIT(A) who vide impugned order dismissed the appeal in limine on the grounds of delay of 17 days by holding that the appellant has not filed any petition seeking condonation of delay.

5.

Being aggrieved, the appellant is in appeal before us in the present appeal. The ld.Counsel submits that there was no delay in filing of appeal before the ld.CIT(A) as the assessment order dated 11.03.2025 received by the assessee on 01.04.2025. The ld.CIT(A) reckoned the date of the order on the date of receipt of the assessment order.

6.

On the other hand, ld.Sr.Departmental Representative opposed the above submission.

7.

We heard rival submissions and perused the material available on record. The issue that arises in the present appeal whether the ld.CIT(A) was justified in refused to condone the delay dismissing the appeal in limine on the ground of delay. The contention of the appellant that as the assessment order was received by assessee on 01.04.2025 remains uncontroverted. It appears that the ld.CIT(A), went by date of the assessment order for the purpose reckoned the limitation period for filing appeal. It is settled position of law that it is actual date of receipt of the assessment order has to be considered for the purpose of computing limitation period. The findings of the ld.CIT(A) are reversed and the matter is restored to the file of ld.CIT(A)

for denovo disposal of the appeal on merits in accordance with law after affording opportunity of being heard to the assessee.

8.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 27th April, 2026.

Sd/- Sd/- (S.S.VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; �दनांक / Dated : 27th April, 2026 SGR, Sr.PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “डी” ब�च, 4. चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5.

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