VALSALAM VIJU,KANYAJUMARI vs. INCOEM TAX OFFICER WARD 1, NAGERCOIL

ITA 3262/CHNY/2025Status: DisposedITAT Chennai06 October 2026AY 2012-1312 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 1171 days in filing the appeal, finding that the assessee was prevented by sufficient and reasonable cause and that the delay was not deliberate or mala fide. The Tribunal adopted a liberal and justice-oriented approach. Regarding the applicability of Section 50C, the Tribunal noted the assessee's argument that the proviso to Section 50C(1) should be applied retrospectively. The assessee contended that the sale agreement was dated 23.11.2009 for Rs. 22,22,000/-, and an advance of Rs. 2,00,000/- was received by cheque on the same date. After deducting court expenses of Rs. 2,08,764/- deposited by the buyer on 08.12.2011, the balance Rs. 18,13,236/- was received by the co-owners. The assessee argued that as per the proviso to Section 50C(1), the section should not be applicable. The Tribunal, however, did not explicitly rule on the retrospective application of the proviso or the applicability of Section 50C in its entirety in the provided text. The judgment indicates that the CIT(A) confirmed the AO's addition, holding that Section 50C would apply and the transfer was completed in FY 2011-12. The assessee's appeal is against this order.

What were the facts?

The assessee, Valsalam Viju, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chennai, against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 03.06.2022. This order confirmed the assessment made by the Assessing Officer (AO) on 24.04.2021 under Section 147 read with Section 144B of the Income-tax Act, 1961, for Assessment Year (AY) 2012-13. The appeal was filed with a delay of 1171 days, which the ITAT condoned. The case involved the sale of immovable property where the assessee, an individual, had a 25% co-ownership share. An agreement for sale was executed in 2009 for Rs. 22,22,000/-. Following litigation and a court order, the sale deed was executed in March 2012 for Rs. 64,70,750/-. The AO reopened the assessment under Section 147, considering the stamp duty value as the full value of consideration and taxed the capital gain on the assessee's share at Rs. 16,17,713/-, whereas the assessee had offered Rs. 5,50,000/-.

What were the issues?

1. Whether the delay of 1171 days in filing the appeal before the ITAT should be condoned, considering the reasons provided by the assessee. 2. Whether Section 50C of the Income-tax Act, 1961, is applicable to the facts of the case, specifically concerning the computation of capital gains on the transfer of immovable property, when the sale deed was executed pursuant to a court order after the initial agreement for sale. Assessee's Arguments: - The delay in filing the appeal was due to sufficient and reasonable cause, and a liberal approach should be adopted for condonation. - Section 50C is not applicable because the entire consideration was received after deducting court expenses, and the proviso to Section 50C(1) should be applied retrospectively, as it was inserted to remedy unintended consequences and give a reasonable interpretation to the section. - The assessee relied on the decision in Alom Extrusions Ltd. for the retrospective application of the proviso to Section 50C(1). - The assessee also submitted that a similar reassessment order passed against another co-owner, Mr. Varun Valsalam, accepted the return of income. Revenue's Arguments: - The Revenue contended that the proviso to Section 50C(1) was inserted from 01.04.2017 and therefore, the stamp duty value of the property should be considered as per the sub-section.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 50C,Section 48,Section 2(47)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

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

Hearing: 29.07.2026Pronounced: 06.10.2026

PER S. R. RAGHUNATHA, AM : The present appeal has been preferred by the Assessee against the order dated 03.06.2022 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], arising from the assessment order dated 24.04.2021 passed by the Assessing Officer, National e-Assessment Centre, Income Tax Department, Delhi [hereinafter referred to as “the AO”], u

The order continues below.

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