MUTHUSAMY NAGARAJAN,KARUR vs. INCOME TAX OFFICER, WARD 1, THANJAVUR, THANJAVUR

ITA 4157/CHNY/2026Status: DisposedITAT Chennai06 October 2026AY 2020-217 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had dismissed the appeal solely on the ground of delay, without adjudicating the substantive grounds on merits. The Tribunal acknowledged the assessee's contention of sufficient cause for the delay due to migration and the lack of communication facilities. It also recognized the substantial addition made and the various grounds raised by the assessee challenging the reassessment proceedings, the assumption of jurisdiction, the approval under section 151, and the applicability of section 69A. Considering that these issues involved factual and legal complexities requiring proper verification at the assessment stage, and to ensure substantial justice, the Tribunal decided to set aside the impugned assessment order. The matter was restored to the file of the Assessing Officer for a de novo assessment. The AO was directed to examine all issues, including the validity of reassessment proceedings, compliance with statutory requirements, the merits of the addition under section 69A, and the assessee's claims regarding the nature and source of transactions, after granting an effective opportunity of being heard. The Tribunal explicitly refrained from expressing any opinion on the merits of the grounds raised, leaving all issues open for the AO's adjudication.

What were the facts?

The assessee, Muthusamy Nagarajan, filed an appeal before the ITAT against the order of the CIT(A) dated May 19, 2026. The CIT(A) had confirmed the assessment order passed by the Assessing Officer (AO) under section 147 read with section 144 of the Income Tax Act, 1961, for Assessment Year 2020-21. The assessee's appeal before the CIT(A) was filed with a delay of 100 days. The assessee claimed migration to his native place lacking communication facilities as a sufficient cause for the delay. The CIT(A) declined to condone the delay and dismissed the appeal without adjudicating the grounds on merits. The AO had initiated reassessment proceedings after the assessee failed to file a return for AY 2020-21, and certain transactions totaling Rs. 11,47,625/- and Rs. 30,00,000/- were noted against the assessee's PAN. The assessment was completed ex parte with an addition of Rs. 41,47,625/- under section 69A.

What were the issues?

1. Whether the CIT(A) erred in not condoning the delay of 100 days in filing the appeal, and consequently, whether the appeal should have been adjudicated on merits, turning on the interpretation of 'sufficient cause' under the Income Tax Act, 1961. 2. Whether the reassessment proceedings initiated by the AO under section 147 read with section 148 of the Income Tax Act, 1961, were bad in law, particularly concerning the assumption of jurisdiction by the jurisdictional AO instead of a faceless authority as per section 151A, and whether there was valid information indicating escaped income. 3. Whether the reassessment proceedings were initiated without valid approval from the specified authority under section 151 of the Act, and if approval was obtained, whether failure to provide a copy of the approval vitiated the assessment. 4. Whether the addition of Rs. 41,47,625/- made under section 69A of the Income Tax Act, 1961, was justified, considering the assessee's contentions that there was no transfer of capital asset, no capital gains, and that purchases were out of explainable business sources. Assessee's contentions: The assessee argued that there was sufficient cause for the delay in filing the appeal before the CIT(A) due to migration to a place with poor communication facilities. The assessee also contended that the reassessment proceedings were bad in law due to improper assumption of jurisdiction, lack of valid information, and absence of valid approval under section 151. Furthermore, the assessee argued that the addition under section 69A was incorrect as there was no capital gains and the purchases were from explainable business sources. Revenue's contentions: The revenue supported the order of the CIT(A) and prayed for the dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 151A,Section 151,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: GAGAN GOYAL & SHRI MANU KUMAR GIRI

For Respondent: Mr. Karthik Dasari, JCIT
Hearing: 06.10.2026

PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], dated 19.05.2026, confirming the assessment order passed u/s. 147 read with section 144 of the Income Tax Act, 1961 (“the Act”), for the Assessment Year (“AY”) 2020-21. Muthusamy NagarajanVs ITO W-1 2. The assessee has ra

The order continues below.

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