VENKATARENGAM C SRINIVASAN,TIRUCHIRAPALLI vs. ASSESSING OFFICER WARD 2(1) TRICHY, TIRUCHIRAPALLI

Brief facts of the case are that the assessee is an individual and did not file his return of income for AY 2020-21. As per the information available with the department, the AO noticed that the assessee has purchased an immovable property valued at Rs.51,00,004/- during the assessment year. The case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act was issued to the assessee. In response, the assessee filed his return of income for A.Y.2020-21 on 16.05.2024, declaring a total income of Rs.3,64,280/-. Subsequently, the AO issued statutory notices to the assessee and by calling for details. In response, the assessee furnished the reply along with its supporting documents to substantiate his claim for consideration. On perusal of the documents submitted by the assessee, the AO found that the Agreement value of property executed on 23.04.2019 is 35,70,000/- only whereas the property value as per the stamp office for the purpose of stamp duty is Rs.51,00,000/-. Therefore, the purchase consideration as per sale deed falls short of Rs.15,30,000/-. Later, the AO noticed that the assessee has received rent and lease advance of Rs.7,00,000/- and no supporting documents has been submitted. Hence, the AO completed the assessment by passing an order u/s.147 r.w.s 144B of the Act dated 20.02.2025 by making an addition of Rs.15,30,000/- as income u/s.56(2)(x) of the Act and amount of Rs.7,00,000/- as unexplained money u/s.69A of the Act and by arriving total income of Rs.25,94,280/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 02.06.2025 with a delay in filing an appeal.

At the outset, we observed that the ld.CIT(A) dismissed the appeal filed by the assessee in limine, due to delay in filing an appeal by 72 days. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR reiterated the affidavit filed for condoning the delay before us, for the delay caused in filing the appeal before the ld.CIT(A) also. He submitted that the assessee is having bad health and hence could not file the appeal in time before the ld.CIT(A) and hence prayed for condoning the delay and to provide for one more opportunity to the assessee before the AO for obtaining the valuation through the DVO. Further, the ld.AR submitted that the property purchased for Rs,35,00,000/- consists of two parts and consisting of two documents. An exchange document dated 26.12.1957 and a Court Order in OS No.139/1909 making the documentation defective. Further, the assessee after purchase has to allow some pathway inside his property to one of the sites behind his property. Further, he must allow other party to use the well and toilet lifelong. Thus, the property does not have perfect title document. The guideline value is for normal property and not for the property with some title defect and need to allow somebody else to use the well. Hence, the guideline value is not fair market value and there should be no addition u/s.56(2)(x) of the Act. Further, the ld.AR argued that the AO has failed to get valuation of the property from the DVO as per Section 50C(2)(b) of the Act as the assessee has very much contested the correctness of the Fair Market Value before the AO. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO as the assessment order passed without having the complete documents. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the authorities complete the proceedings effectively.

We have heard the rival submissions and perused the material available on record, including the orders of the lower authorities. At the outset, we note that the appeal before the ld.CIT(A) came to be dismissed in limine solely on the ground of delay of 72 days in filing the appeal and, consequently, the issues arising from the assessment order were not examined by the first appellate authority on merits. The assessee has explained the delay on the ground of his ill-health and has relied upon the affidavit filed in support thereof. We also note that, on merits, the assessee has raised a specific and substantive grievance in respect of the addition of Rs.15,30,000/- made under section 56(2)(x) of the Act, contending that the difference between the consideration stated in the sale deed and the stamp duty value arose in the context of defects and encumbrances attached to the property. The assessee has specifically pointed out that the property comprises two portions covered by different documents, including an exchange document dated 26.12.1957 and a Court order in O.S. No.139/1909, and that the property is also subject to obligations relating to the provision of pathway and continued use of the well and toilet by another party. It is, therefore, the contention of the assessee that the stamp duty value applicable to a normal property cannot, without examination of these peculiar characteristics, be treated as representing the fair market value of the property. Further, the assessee has contended that the correctness of the stamp duty value was disputed before the AO and that the matter required consideration of valuation in accordance with the applicable provisions of law.

In the totality of the facts and circumstances of the case, and having regard to the explanation furnished by the assessee for the delay as well as the fact that the appeal before the ld.CIT(A) was dismissed without adjudication of the substantive issues on merits, we are of the considered view that the

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