PALURI RAGHAVAN GOPALA,UTTAR PRADESH vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2, UTTAR PRADESH

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ITA 4846/DEL/2025Status: DisposedITAT Delhi24 June 2026AY 2015-165 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO travelled beyond the scope of limited scrutiny by denying the Section 54F exemption. It also found that the AO erred by not considering the revised return, which, according to a High Court decision, obliterates the original return.

What were the facts?

The assessee's case was selected for limited scrutiny concerning cash deposits. The Assessing Officer (AO) denied the exemption claimed under Section 54F and treated capital gains as business income. The assessee also filed a revised return which the AO allegedly ignored.

What were the issues?

Whether the AO exceeded the scope of limited scrutiny and whether the assessment order was valid when a revised return was filed but not considered.

Which sections of the Income-tax Act were involved?

Section 54F,Section 139(1),Section 139(5),Section 143(2),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA&

Hearing: 04.06.2026Pronounced: 24.06.2026

P a g e | 1 ITA No. 4846/Del/2025 Paluri Raghavan Gopala (AY: 2015-16) IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, DELHI

BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

ITA No.4846/Del/2025 (Assessment Year: 2015-16)

Paluri Raghavan Gopala Vs. ACIT, Circle-2 Flat No. 02103, ATS CGO-II, Kamla Nehru Advantage Shipra Suncity, Nagar, Ghaziabad Ghaziabad, Uttar Pradesh – 201002 Uttar Pradesh – 201014 स्थायीलेखासं./जीआइआरसं./PAN/GIR No: AGPPG8723M Appellant .. Respondent

Appellant by : Sh. Ayush Garg, CA Respondent by : Sh. Ashok Kumar Pandey, Sr. DR

Date of Hearing 04.06.2026 Date of Pronouncement 24.06.2026

O R D E R PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 11.06.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’)

P a g e | 2 ITA No. 4846/Del/2025 Paluri Raghavan Gopala (AY: 2015-16) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1076933960(1) arising out of the assessment order dated 28.12.2017 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ACIT, Circlel- 2, Ghaziabad for AY: 2015-16.

2.

On hearing both sides we find that assesse has raised additional ground which have been pressed outrightly and for convenience, we reproduced the additional ground:

“2. On the facts and circumstances of the case, the Ld. CIT(A) has erred both org facts and in law in confirming the disallowance of claim under section 54F of the Act made by the AO which was beyond the scope of limited scrutiny under CASS. 3(i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the action of the AO in not considering the revised return of income filed under section 139(5) of the Act, which was validly filed within the prescribed time limit, and in passing the assessment order on the basis of the original return. (ii) That the assessment is bad in law as no valid notice under section 143(2) was issued with respect to the revised return of income. (iii) That the assessment framed under section 143(3) on the basis of the original return, which stood replaced by the revised return, is bad in law and liable to be quashed.”

3.

In regard to additional ground No. 1 we find that assesse has asserted that the case of the assesse was selected for limited scrutiny on the basis of examination of cash deposit. However, ld. Assessing Officer has ended up

P a g e | 3 ITA No. 4846/Del/2025 Paluri Raghavan Gopala (AY: 2015-16) making an assessment by denying exemptions claimed u/s 54F of the Act and treating the capital gain of the assesse as business income. Ld. DR has however submitted that the scope of limited scrutiny it permits assessing officer to examine the claim of capital gains and for that purpose he has relied upon the assessment order wherein assessing officer has recorded that the case of assesse was selected for scrutiny to examine large cash deposit in saving bank account and assesse has also transferred one or more properties during the year.

4.

After taking into consideration the copy of notice u/s 143(2) available at page No. 5 of the paper book we find that when the notice dated 25.07.2016 was issued which merely mentioned cash deposit as the issue for examination under limited scrutiny. Thus, mere assertion of assessing officer that the issue of transfer of properties being part of limited scrutiny in the assessment order is not sufficient and certainly travelling beyond the limited scrutiny notice u/s 143(2) of the Act the issue has been completed.

In regard to 2nd Additional ground of appeal we find that assesse had 5. filed return of income u/s 139(1) of the Act as original return on 26.08.2015 the copy of same is available at page No.1 and a revised return was filed on 22.08.2016 copy of which is available at page No. 2 of the paper book.

P a g e | 4 ITA No. 4846/Del/2025 Paluri Raghavan Gopala (AY: 2015-16) Assessee had reported total income of Rs.57,71,360/- in original return and the same was reduced to Rs.50,00,830/- in the revised return. The case of assesse is that assessing officer has not taken into consideration the revised return and while issuing notice u/s 143(2) of the Act return dated 25.08.2015 is only referred for being selected for scrutiny. Ld. DR has submitted that as the revised return was filed after notice u/s 143(2), therefore, on the basis of revised return no further cognizance was to be taken.

6.

However, we find that the issue seems to be settled in favour of the assesse by decision of Hon’ble Tripura High Court in the case of Tripura State Electricity Corporation Ltd. Vs. Pr.CIT, Shillong (2025) (8) TMI 1193 (Tripura HC) wherein Hon’ble High Court has held that once revised return is filed the original return stand obliterated. We find that in the case of assesse when the assessment order was passed while re-computing taxable income on the basis of disallowance of capital gain and considering the same to be under the head of business income. Assessing officer has taken return income of Rs.57,71,360/- which admittedly was a return income in the original return dated 26.08.2015. Thus, a revised return seems to be completely ignored by the assessing officer. On the basis of aforesaid discussion we are of the considered view the additional ground raised

P a g e | 5 ITA No. 4846/Del/2025 Paluri Raghavan Gopala (AY: 2015-16) deserves to be sustained. Accordingly, the appeal of the assesse is allowed and the impugned addition is deleted.

Order pronounced in the open court on 24.06.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 24.06.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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