VELAYUTHAM,PUDUCHERRY vs. INCOME TAX OFFICER, WARD 3, PUDUCHERRY, PUDUCHERRY

ITA 4107/CHNY/2026Status: DisposedITAT Chennai07 October 2026AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 527 days in filing the appeal before the CIT(A) in the interest of substantial justice, noting that the appeal was dismissed in limine without adjudicating the substantive issues on merits. The Tribunal observed that the assessee deserved an effective opportunity to contest the additions made in the assessment. Consequently, the impugned order of the CIT(A) was set aside. Since the assessment order was passed without complete documentary evidence, the matter was remitted back to the file of the AO. The AO was directed to de novo frame the assessment order after providing a reasonable opportunity to the assessee, who was advised to be diligent and file written submissions and relevant documents. The Tribunal explicitly stated that the substantive issues arising from the assessment order were not examined by the first appellate authority.

What were the facts?

The assessee, an individual, did not file a return of income for Assessment Year 2015-16. The Assessing Officer (AO) noted a sale of immovable property amounting to Rs. 2,02,50,000/-. The case was re-opened under Section 147, and a notice under Section 148 was issued. The assessee failed to file a return. Despite statutory notices, the assessee provided incomplete documentary evidence. The AO obtained property sale details from the purchaser under Section 133(6) and completed the assessment under Sections 147, 144, and 144B on March 24, 2023, adding Rs. 2,02,50,000/- as short-term capital gain. The assessee appealed to the CIT(A) on October 1, 2024, with a delay of 527 days. The CIT(A) dismissed the appeal in limine due to this delay.

What were the issues?

1. Whether the delay of 527 days in filing the appeal before the learned Commissioner of Income Tax (Appeals) should be condoned, considering the assessee's explanation of unfamiliarity with tax proceedings and reliance on an accountant who failed to respond to notices. (Question of law and fact, turning on principles of condonation of delay). Assessee's contention: The assessee, unfamiliar with tax procedures, entrusted the matter to an accountant who failed to respond to statutory notices. The assessee only became aware of the assessment order upon receiving a recovery notice. The delay should be condoned to allow for a substantive hearing. Revenue's contention: The appeal was filed with a significant delay of 527 days, indicating negligence. The CIT(A)'s order dismissing the appeal due to delay should be confirmed. 2. Whether the entire sale consideration of Rs. 2,02,50,000/- was correctly brought to tax as capital gains, or if the assessment should have considered the value attributable only to the land, given that the superstructure was constructed by the lessee. (Question of law and fact, turning on the computation of capital gains under the Act). Assessee's contention: The AO erred in taxing the entire sale consideration as capital gains by treating the cost of acquisition as Nil. The assessee, as the owner of the land only, should be assessed only for the value attributable to the land, as the superstructure was constructed by the lessee (M/s. Blech Technic India Private Limited). Revenue's contention: No specific argument is recorded in the judgment for the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 16.09.2026Pronounced: 07.10.2026

PER S. R. RAGHUNATHA, AM :

The present appeal is filed by the assessee against the order dated 15.07.2026 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 24.03.2023 passed u/s.147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (here

The order continues below.

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