PILLAPPA CHINNASWAMI,DENKANIKOTTAI vs. INCOME TAX OFFICER, WARD 1, HOSUR

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ITA 1876/CHNY/2026Status: DisposedITAT Chennai31 August 2026AY 2016-176 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had set aside the assessment for de novo consideration without adjudicating the jurisdictional grounds raised by the assessee challenging the validity of reassessment proceedings. The Tribunal agreed to remand the matter back to the CIT(A) for adjudication of these grounds.

What were the facts?

The assessee, an individual engaged in agricultural activity, did not file a return for AY 2016-17. The AO initiated reassessment proceedings based on information of property sale and issued a notice u/s 148. The assessee did not comply, leading to a best judgment assessment.

What were the issues?

The key issues were the validity of reassessment proceedings initiated under Section 148, including proper approval and adherence to time limits, and whether the CIT(A) properly adjudicated these jurisdictional grounds.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144,Section 148A,Section 151,Section 144B,Section 151A,Section 139,Section 142(1),Section 149(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES,

Before: SHRI INTURI RAMA RAO & SHRI MANU KUMAR GIRI

Pronounced: 31.08.2026

आयकर अपील�य अ�धकरण, चे�नई पीठ�, चे�नई INCOME TAX APPELLATE TRIBUNAL, CHENNAI BENCHES, CHENNAI BENCH: B BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER ITA No.1876/CHNY/2026 िनधा�रण वष�/Assessment Year: 2016-17 PILLAPPA CHINNASWAMI, INCOME TAX OFFICER, No.1/189, Kothajeegur Village, Ward-1, Hosur. Komaranapalli, Vs. Peddabelagondapalli, Krishnagiri, Tamilnadu – 635114. अपीलाथ� Appellant ��थ� Respondent BDWPC1100K Permanent Account Number of Assessee:

अपीलाथ� �ारा/Appellant represented by: Mr.C.Sathish - CA ��थ� �ारा/Respondent represented by: Mr. Banoth Akhil Ram Naik - JCIT सुनवाई की तारीख / Date of conclusion of hearing: 17.08.2026 घोषणा की तारीख / Date of pronouncement: 31.08.2026 आदेश / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER : This is an appeal filed by the Assessee directed against the order passed by learned Commissioner of Income Tax(Appeal)[NFAC] dated 26.02.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2016-17.

2.

The Assessee raised the following grounds of appeal : “Ground 1: The order of the learned Commissioner of Income Tax (Appeals) is erroneous in law and on facts and is liable to be set aside.

Ground 2: The learned CIT(A) erred in not adjudicating the jurisdictional grounds raised by the appellant challenging the validity of reassessment proceedings and has disposed of the appeal by setting aside the assessment without rendering any findings on such grounds.

Ground 3: The learned Assessing Officer erred in law and on facts in issuing notice under section 148 beyond the time limit prescribed under section 149(1)(b) as applicable prior to amendment by the Finance Act, 2021, thereby rendering the reassessment proceedings invalid and void.

Ground 4: The appellant submits that the reassessment proceedings were initiated without obtaining valid approval under section 148A(d) read with section 151 of the Act, and as the copy of such approval was not furnished despite specific request, the appellant respectfully requests that the Hon'ble Tribunal may call for the relevant records and, if no valid approval is found to have been obtained, hold the reassessment proceedings to be void ab initio and without jurisdiction Ground 5: The transfer of the case from the Faceless Assessment regime to the Jurisdictional Assessing Officer at the assessment stage was carried out without any formal order or approval as mandated under section 144B(8), thereby rendering the assessment order void ab initio and without jurisdiction

Ground 6: The reassessment proceedings were initiated by the Jurisdictional Assessing Officer instead of the Faceless Assessment Unit, in contravention of section 151A read with sections 144B and 148 of the Act, thereby rendering the proceedings without jurisdiction and invalid.

Ground 7: The appellant craves leave to add alter, amend, or withdraw any of the above grounds at the time of hearing.”

3.

Briefly, the facts of the case are that the appellant is an Individual engaged only in carrying the agricultural activity. No regular return of income under the provisions of section 139 of the Income Tax Act, 1961 filed by the appellant for the Assessment Year 2016-17. Based on the information that the appellant sold immovable property for consideration of Rs.83,39,900/- during the previous year relevant to assessment year under consideration. The Jurisdictional Assessing Officer formed an opinion that income got escaped assessment from tax, accordingly, a notice u/s.148 of the Act was issued by the Assessing Officer on 17.03.2023. The appellant neither complied with the notice u/s.148 of the Act nor the notices issued u/s.142(1) of the Act. In the circumstances, the ITO, Ward-1, Hosur (hereinafter called ‘AO’) had proceeded with framing best judgment assessment vide order dated 15.03.2024 passed u/s.147 r.w.s 144 of the Income Tax Act, 1961 at a total income of Rs.83,39,900/-. While doing so, the Assessing Officer brought to tax and the entire sale consideration on sale of immovable property as a Long Term Capital Gain.

4.

Being aggrieved by the assessment order, the appellant filed an appeal before the Learned CIT(A), contended that the Assessing Officer ought not have brought the sale consideration received on sale on immovable property to tax under head “Capital Gains” without appreciating the fact that the land sold was agricultural land situated beyond specified limits of Hosur Municipality. The Assessing Officer ought to have allowed the indexed cost of acquisition as a deduction while computing the capital gains and allowed deduction 54B and 54F of the Income Tax Act, 1961. However, the Learned CIT(A) had set-aside the assessment order for de novo assessment after giving opportunity of being heard to the appellant.

5.

Being aggrieved by the order of the Learned CIT(A), appellant preferred an appeal before the Tribunal. It is contended that the Learned CIT(A) without adjudicating the validity of notice u/s.148, set-aside the assessment. Therefore, it is prayed that the order of the Learned CIT(A) may be set- aside and direct the Learned CIT(A) to adjudicate the grounds of appeal raised before him challenging the very validity of the reassessment proceedings u/s.148 of the Act.

6.

On the other hand, the Learned Sr.DR has no serious objection to remand the matter back to the file of the Learned CIT(A) for adjudication of grounds of appeal challenging the validity of the proceedings u/s.148 of the Act. We order accordingly and the matter is set-aside to the file of the Learned CIT(A) for de novo disposal of the appeal in accordance with law after affording an opportunity of hearing to the appellant.

7.

In the result, appeal filed by the assessee stands partly allowed for statistical purpose. Order pronounced in the open Court on 31st August, 2026.

Sd/- Sd/- (MANU KUMAR GIRI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 31st Aug, 2026 SGR, Sr.PS आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब�च, चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5. GANGADHARA Digitally signed by GANGADHARA RAO SALEELA RAO SALEELA Date: 2026.09.01 16:06:13 +05'30'

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