ACIT., CIRCLE-1, KURNOOL vs. SUNEETHA RAGHUVEER NEELAKANTAPURAM, ANANTAPUR

PDF · subscribers
ITA 438/HYD/2025Status: DisposedITAT Hyderabad24 June 2026AY 2016-178 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal. Since the CIT(A) had already set aside the assessment order for de novo assessment, the order passed under Section 154 was also set aside and remanded to the Assessing Officer.

What were the facts?

The assessee filed an appeal with a delay of 17 days due to the medical condition of their authorized representative. The Revenue did not object to the condonation of delay.

What were the issues?

Whether the order passed under Section 154 should be reconsidered along with the set aside assessment order. The validity of the CIT(A)'s order in light of the set aside assessment.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD “A” BENCH : HYDERABAD

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

Hearing: 17.06.2026Pronounced: 24.06.2026

Heard together (2 matters)

ITA.No.438/HYD/2025
ITA.No.678/HYD/2025

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अिधकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER ITA.No.438/HYD/2025 िनधा�रण वष�/Assessment Year: 2016-2017 Suneetha Raghuveer The ACIT, vs. Neelakantapuram, Circle-1 MADAKASIRA–515 301. KURNOOL – 518 001. Anantapur Dist. PAN ACOPN0182C (Appellant) (Respondent) ITA.No.678/HYD/2025 िनधा�रण वष�/Assessment Year: 2016-2017 Suneetha Raghuveer Neelakantapuram, The ACIT, MADAKASIRA. vs. Circle-1 PIN –515 301. KURNOOL – 518 001. Anantapur Dist. PAN ACOPN0182C (Appellant) (Respondent) For Revenue : Sri M Naveen, CIT-DR For Assessee : Sri R Mohan Kumar, Advocate

Date of Hearing : 17.06.2026 Date of Pronouncement : 24.06.2026

2 ITA.Nos.438 & 678/Hyd./2025 ORDER PER VIJAY PAL RAO, VICE PRESIDENT :

These cross appeals filed by the Revenue and Assessee are directed against the Order dated 02.02.2025 of learned CIT(A)-National Faceless Assessment Centre [in short “NFAC”], Delhi, arising out of the Order passed u/sec.154 of the Income Tax Act [in short "the Act"], 1961 for the assessment year 2016-2017.

2.

There is a delay of 17 days in filing the appeal by the assessee before the Tribunal. The assessee has filed a petition for condonation of delay. The learned Authorised Representative of the Assessee has submitted that due to medical issue of the Authorised Representative Sri Nikhil Bhoot, CA who is undergoing the treatment for recovery from blood cancer [Lukemia B-All Ph+ve] the appeal could not be prepared and filed within the period of limitation. Thus, the learned Authorised Representative of the Assessee has submitted that the delay of 17 days in filing the appeal be condoned.

3 ITA.Nos.438 & 678/Hyd./2025 3. The learned DR has not seriously objected to the condonation of delay due to the medical reasons of the Authorised Representative.

4.

We have considered the rival submissions and carefully perused the reasons explained in the application for condonation of delay which has caused the delay in filing the appeal. Therefore, we are satisfied that the assessee was having a reasonable and sufficient cause for delay of 17 days in filing the present appeal and the same is condoned. The appeal is admitted for adjudication.

5.

The Revenue has raised the following grounds of appeal :

1.

“Whether CIT(A) is correct in assuming that the AO adopted the values in balance sheet as on 31.03.2015, in order to calculate the fair market value of each share of the company. when the AO actually adopted the values in the balance sheet as on 31.03.2016[as evident from 2nd paragraph in page 8 of the appellate order). 2. Whether CIT(A) is correct in adopting the values in the balance sheet of M/s Rhizome distilleries Pvt Ltd as on 2 31.03.2014 instead of 31.03.2015 for the reason that books for Rs. 0 the year ending 31.03.2015 were not prepared at the time of transfer of shares.

4 ITA.Nos.438 & 678/Hyd./2025 3. Whether CIT(A) is correct in adopting the values in the balance sheet of the company as on 31.03.2014 within the 3 meaning of 'balance sheet' as per 11U of 1.T Rules 1962 wherein it is clear that 'balance sheet drawn up as on a date immediately preceding the valuation date. 4. Whether CIT(A) is correct in ignoring the fact that valuation of shares under Rule 11UA of the IT Rules 1962, is to be done at the time of filing the return and not at the time of transfer of shares. 5. CIT(A) failed to appreciate the fact that there is huge increase in book value of the assets of the company to the extent of Rs.11,99,26,627/- as evident from the balance sheet for the year(s) ending on 31.03.2014 and 31.03.2015 respectively even after written off the investment in the books of M/s Milano Spirits Pvt Ltd worth Rs.8,69,00,000/- during F.Y 2014-15 which leads to valuation of each share of the company at lower side. 6. Whether CIT(A) is correct in treating the agreement dated 01.03.2013 as principal document without verifying its veracity or genuineness under the facts and circumstances of the which leads to valuation of each share of the company at lower side. 7. Whether CIT(A) is right in allowing the additional evidence furnished by the assessee during the appellate proceedings without providing an opportunity to the Assessing officer in contravention to Rule 46A(3) of 1.T Rules 1962.

8.

Any other additional ground that may be urged at the time of the appeal hearing.”

6.

The assessee has raised the following grounds of appeal:

5 ITA.Nos.438 & 678/Hyd./2025 “Ground No.1 In law and in the facts and circumstances of the Appellant's case, the Hon'ble CIT(A) legally erred in applying provisions of Section 56(2)(vii)(c) of the Income Tax Act, 1961 ("the Act") not appreciating the fact that the Appellant was never the recipient of the shares and hence, the provisions of Section 56(2)(vii)(c) of the Act are not applicable to the Appellant. Ground No. 2 The Appellant prays that she may be allowed to add, amend, alter or forego the above grounds of appeal as the circumstances may warrant.”

7.

At the outset, both the learned AR as well as learned DR has pointed out that the learned CIT(A) while passing the impugned order has granted partial relief in respect of the additions made by the Assessing Officer while passing the rectification order u/sec.154 of the Act. They also pointed out that the appeal filed by the assessee against the assessment order passed u/sec.147 r.w.s.144 of the Act has been decided by the learned CIT(A) vide Order dated 31.12.2025 whereby the matter was set aside to the record of the Assessing Officer for de novo assessment. Hence, the issue arising from the Order passed u/sec.154 of the Act be also be set aside to the record of the Assessing Officer to

6 ITA.Nos.438 & 678/Hyd./2025 consider the same along with the set aside matter by the learned CIT(A).

8.

Having considered the submissions of the learned Authorised Representative of the Assessee as well as learned DR and careful perusal of the record we find that the learned CIT(A) while deciding the appeal of the assessee against the assessment order vide Order dated 31.12.2025 has set aside the matter to the record of the Assessing Officer for making fresh assessment in Para nos.4.4 and 4.5 as under:

“4.4. It is found that such powers of setting aside an assessment order have been Inserted by the Finance Act, 2024, w.e.f. 1-10-24. It is clear that in this case, the assessment order has been made u/s 144. Keeping in view these facts and the change in Law, principles of natural justice require that this assessment order should be set aside and referred back to the Assessing Officer for making a fresh assessment. The same is hereby done, i.e. the assessment order is set-aside to the Assessing Officer for making fresh assessment. The Assessing Officer shall provide enough opportunities of being heard to the assessee and shall consider all the submissions made & documents furnished by the assessee and pass a detailed, exhaustive and speaking order on all the impugned issues, vis-à-vis the submissions made by the assessee.

7 ITA.Nos.438 & 678/Hyd./2025 4.5. Keeping in view the above, it is not considered necessary to go into the merits of each ground taken by the assessee, considering the fact that the assessment order has been set-aside in toto, to be made afresh by the AO.”

8.1. Therefore, when the assessment order itself is set aside for fresh assessment by the learned CIT(A) then, the Order passed by the Assessing Officer u/sec.154 is also required to be reconsidered along with the set aside proceedings of main assessment order. Hence, in the facts and circumstances of the case, the impugned order of the learned CIT(A) is set aside and matter is remanded to the record of the Assessing Officer to reconsider the issue involved in the order passed u/sec.154 of the Act along with the set aside proceedings in respect of the assessment order. Accordingly, the appeal of the Revenue as well as the appeal of the Assessee are allowed for statistical purposes.

9.

In the result, appeal of the Revenue and appeal of the Assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files

8 ITA.Nos.438 & 678/Hyd./2025 Order pronounced in the open Court on 24.06.2026.

Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 24th June, 2026 VBP Copy to: The ACIT, Circle-1, Aayakar Bhavan, Opp. 1. Childrens Park, NR Peta, KURNOOL – 518 001. Suneetha Raghuveer Neelakantapuram, H.No.11-1, 2. Kaverappa Nilayam, Neelakantapuram, MADAKASIRA S.O. Gollahalli, PIN – 515 301. Anantapur Dist. 3. The Pr. CIT, Kurnool 4. The DR, ITAT, “A” Bench, Hyderabad. 5. Guard file. BY ORDER Digitally signed VADREVU by VADREVU PRASADA RAO PRASADA Date: Asst. Registrar, ITAT RAO 2026.06.24 Hyderabad. 14:48:11 +05'30'

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →