RUTHIRAKOTTI SIYAMALA,KANCHIPURAM vs. ITO, NCW-22(4), TAMBARAM

The brief facts, as borne out from the material available on record, are that the assessee is an individual. Admittedly, no return of income was filed by the assessee for the assessment year under consideration. It is the case of the Revenue that information was generated in the Insight Portal under the category "RMS – Non-filing of Return – PAN Cases", indicating that the assessee had effected sale of an immovable property for a total consideration of Rs.42,88,011/-. Based on the said information, the AO initiated proceedings u/s.148A of the Act by issuing a show cause notice u/s.148A(b) of the Act on 23.01.2024 calling upon the assessee to explain as to why proceedings u/s.148 of the Act should not be initiated. Since no reply was received from the assessee in response to the said notice, the AO proceeded to pass an order u/s.148A(d) of the Act holding that it was a fit case for issuance of notice u/s.148 of the Act. Consequently, notice u/s.148 of the Act was issued on 26.03.2024. In compliance thereto, the assessee furnished her return of income on 28.03.2024 declaring a total income of Rs.1,09,165/-.

During the course of reassessment proceedings, the AO required the assessee to explain the taxability of the capital gains arising from the sale of the aforesaid immovable property. In response, the assessee submitted that the property in question was an ancestral property jointly owned by several family members and that her entitlement therein was confined only to a sum of Rs.1,15,000/-, being the amount distributed to her by the head of the family. It was, therefore, contended that only the said amount could, at best, be considered in her hands and that the entire sale consideration of Rs.42,88,011/- could not be subjected to tax as her capital gains.

The AO, however, observed that except for a handwritten/paper statement asserting the aforesaid claim, the assessee had failed to furnish any documentary evidence to establish the extent of her ownership in the property or the basis on which only a sum of Rs.1,15,000/- was claimed as her share. According to the AO, in the absence of any supporting evidence, the assessee's explanation remained unsubstantiated. Accordingly, treating the difference of

Aggrieved by the aforesaid reassessment order, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A), vide the impugned appellate order dated 24.02.2026, dismissed the appeal and affirmed the action of the AO in bringing to tax the entire addition of Rs.41,73,011/- towards long-term capital gains.

Further aggrieved, the assessee is in further appeal before this Tribunal.

The Ld.AR, appearing on behalf of the assessee, assailed both the assumption of jurisdiction as well as the addition made on merits. It was first contended that the reopening itself is vitiated in law inasmuch as the information relied upon by the AO as available in the Insight Portal pertained to a different assessment year and had no nexus with the assessment year under consideration. It was submitted that the very foundation for assumption of jurisdiction under sections 148A and 148 of the Act was, therefore, erroneous.

Without prejudice to the above legal contention, the Ld. AR submitted that the assessee was merely one among thirteen co-owners of the ancestral property and her ownership was restricted only to 1/13th share therein. Hence, according to the Ld. AR, the entire sale consideration of Rs.42,88,011/- could never have been assessed in the hands of the assessee. It was further submitted that an identical issue arising out of the very same property and involving one of the co-owners had already come up for consideration before this Tribunal in the case of Palani v. ITO in ITA No.1890/Chny/2025, wherein,

Per contra, the Ld.DR supported the orders passed by the lower authorities. It was submitted that the assessee had failed to produce any credible documentary evidence either before the AO or before the first appellate authority to substantiate her claim regarding the extent of ownership in the property. The Ld.DR, therefore, contended that the AO was fully justified in drawing an adverse inference and bringing the impugned amount to tax. Accordingly, reliance was placed on the reasoning contained in the orders of the AO and the Ld.CIT(A), and it was prayed that the same be upheld.

We have heard the rival submissions, perused the orders of the lower authorities and carefully considered the material placed on record. We have also gone through the order of the Coordinate Bench of this Tribunal in the case of Palani v. ITO in ITA No.1890/Chny/2026 dated 01.07.2026, which admittedly arises out of the very same transaction of sale involving one of the co-owners of the very same property.

The undisputed facts are that the reassessment proceedings were initiated on the basis of information available in the Insight Portal indicating that the assessee had sold an immovable property for a consideration of Rs.42,88,011/-. During the reassessment proceedings, the assessee consistently maintained that the property was not her exclusive property but was an ancestral property jointly owned by several family members and that she was entitled only to a fractional share therein. It was specifically pleaded that she had received only Rs.1,15,000/- as her share of the sale consideration and that the entire consideration could not be brought to tax in her hands. The

The principle of judicial consistency requires that where the facts arise out of the same transaction and concern co-owners of the very same property, a consistent approach ought to be adopted unless there exist distinguishing features, which the Revenue has failed to point out before us. The Revenue has also not disputed that the present assessee is one of the co-owners in the very same property which formed the subject matter of the Coordinate Bench decision.

We further note that the assessment records reveal that no effective enquiry was undertaken by the AO to ascertain the true nature of ownership of the property, the number of co-owners, the extent of the assessee's ownership, the actual consideration received by each co-owner, or the correctness of the assessee's contention that she was entitled only to a fractional share. Likewise, the AO has not examined the registered sale deed, revenue records, legal heirship documents, partition arrangements, encumbrance certificate or any other relevant evidence which could conclusively determine the assessee's ownership rights. Instead, the entire sale consideration reflected in the Insight Portal has been mechanically assessed in the hands of the assessee merely

We also find considerable force in the contention of the Ld.AR that unless the nature of the property, the identity and number of co-owners, the assessee's exact fractional interest, the year of transfer, the applicability of the provisions governing capital gains and the admissible deductions towards cost of acquisition and indexed cost are properly verified, no proper determination of taxable capital gains can be made. These factual aspects go to the very root of the matter and require an examination by the JAO based on the documentary evidence.

Considering the entirety of the facts and circumstances of the case, respectfully following the decision of the Coordinate Bench in the case of Palani v. ITO (supra), and in the interest of substantial justice, we deem it appropriate to set aside the impugned orders of the lower authorities and restore the entire matter to the file of the JAO for a de novo adjudication. The JAO shall examine the registered sale deed, ascertain the nature of the property, verify the actual ownership, determine the number of co-owners and the precise share of the assessee therein, examine whether there was a transfer of a capital asset chargeable to tax during the relevant previous year, determine the correct sale consideration relatable to the assessee, compute the capital gains, if any, in accordance with law after allowing all eligible deductions including cost of acquisition and indexed cost, wherever applicable, and thereafter pass a fresh speaking order in accordance with law. Needless to state, the JAO shall afford the assessee adequate opportunity of producing all relevant documentary evidence and of being heard before passing the fresh assessment order. The assessee is also directed to extend full cooperation and furnish all documents and explanations as may be called for by the JAO.

Since the matter is being restored to the file of the JAO for fresh adjudication on the foundational factual issues, we refrain from expressing any opinion on the merits of the rival contentions, including the legal challenge to the assumption of jurisdiction u/s.148A and 148 of the Act, and all such contentions are left open to be urged by the assessee before the AO as well as, if necessary, in any subsequent appellate proceedings. Accordingly, the impugned assessment order is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes.

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