SMT. KALAWATI GAJWANI, RAIPUR,RAIPUR vs. ITO-3(1), RAIPUR, RAIPUR

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ITA 581/RPR/2026Status: DisposedITAT Raipur06 October 2026AY 2016-178 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the right of appeal is a valuable substantive right and should be viewed liberally. It found that the CIT(A) had not provided a specific opportunity of being heard to the assessee before rejecting the delay condonation petition and dismissing the appeal. This was considered against the principles of natural justice. Therefore, the Tribunal set aside the impugned order and remitted the matter back to the CIT(A) for a fresh consideration of the delay condonation petition. The CIT(A) was directed to afford an opportunity of being heard to the assessee before deciding the condonation petition. If the condonation petition is found satisfactory, the CIT(A) should then decide the appeal on merits. The Tribunal refrained from commenting on the merits of the condonation petition or the case itself. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Smt. Kalawati Gajwani, filed an appeal for Assessment Year 2016-17 against the order of the CIT(A). The assessee had originally declared an income of Rs. 44,42,770/-. The assessment was reopened under section 148A and 148 of the Income Tax Act, 1961, as the assessee did not respond to notices. During reassessment, the Assessing Officer (AO) disallowed a deduction of Rs. 1,78,30,576/- claimed under section 54F for the purchase of a residential property, finding that the assessee had purchased three different properties instead of one. The AO also disallowed the indexed cost of acquisition. The assessee's appeal before the CIT(A) was filed belatedly by 383 days, which the CIT(A) rejected, dismissing the appeal as inadmissible. The assessee's original return had claimed a deduction of Rs. 1,76,37,803/- for a newly acquired residential house.

What were the issues?

1. Whether the rejection of the petition for condonation of delay of 383 days by the CIT(A) was valid, leading to the dismissal of the appeal as inadmissible? (Question of law and fact, concerning principles of natural justice and right to appeal). 2. Whether the reassessment proceedings initiated under section 148A and 148 of the Act were valid? (Question of law, concerning the validity of reopening assessments). Assessee's contentions: The addition of Rs. 1,78,30,576/- was uncalled for as the capital gains issue was already examined in the original assessment, and no fresh material was brought on record, making the reopening a 'change of opinion'. Non-compliance during reassessment was bonafide due to non-receipt of physical notices, the assessee being 74 years old and not acquainted with online procedures, and her son not informing her of online notices sent to his email/mobile. The addition also amounted to double taxation. The assessee relied on Indian Aluminium Co Ltd. Vs. CIT and CIT Vs. Ashoka Engineering Co. Revenue's contentions: The assessee's son did not deny receiving notices or informing the assessee. Physical residence is immaterial in the internet age. Affidavits did not state that the son and assessee never contacted each other. The assessee/son last logged into the income tax portal on 12.09.2024, contradicting the claim of unawareness. Faceless assessment requires online correspondence. The revenue relied on Subhodh Parkash, Shri Nandkishore Education Society, Ramlal vs. Rewa Coalfield Limited, Jawaharlal Jain HUF, and Shivangi Steel Pvt. Ltd. for opposing condonation of delay and admission of additional evidence.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 148,Section 148A,Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI AVDHESH KUMAR MISHRA, AM

For Appellant: Shri Deepak Menghani, CA
Hearing: 25/09/2026

आदेश / O R D E R Per Avdhesh Kumar Mishra, AM:

This appeal for Assessment Year (‘AY’) 2016-17 filed by the assessee is directed against the order dated 23.06.2026 of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (‘NFAC’), Delhi [‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961 (‘Act’).

2.

Vide three effective grounds, the assessee has challenged (i) the rejection of petition for condonation of delay of 383 days by the CIT(A) vis-à-vis dismissal of appeal holding the same as inadmissible and (ii) validity of reassessment proceedings.

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur 3. The assessee filed her original Income Tax Return (‘ITR’) of the relevant year on 05.03.2018 declaring income of Rs.44,42,770/-. The case was picked up for scrutiny and the consequential scrutiny assessment was completed accepting the returned income vide order dated 08.12.2018 passed under section 143(3) of the Act. Thereafter, based on the information available on the Income Tax Business Application (ITBA), the Assessing Officer (‘AO’) reopened the assessment under section 148 of the Act after following the due procedures prescribed in section 148A of the Act as the assessee did not respond to the notice issued under section 148A(b) of the Act. The assessee did not file the ITR in response to the notice under section 148 of the Act. Further, during the course of reassessment proceedings, the assessee did not ensure any compliance; therefore, the Ld. AO had no option except to finalize the assessment based on the material available on the assessment record.

4.

During the course of relevant year, the assessee along with three other co- owners had sold an immovable property for Rs.3,88,12,500/-. The assessee’s share in the sale consideration of the said immovable property was Rs.2,34,12,500/-. The assessee, after claiming deduction of (i) indexed cost of acquisition along with the cost of transfer of Rs.13,31,924/- and (ii) Rs.1,76,37,803/- for newly acquired residential house under section 54F of the Act, offered the remaining Capital Gains of Rs.44,42,770/- as income chargeable to tax in the original ITR. During the course of reassessment proceedings, the Ld. AO noticed that the assessee had actually not bought one residential property worth Rs.1,76,37,803/- on which the deduction under section 54F of the Act was claimed. But the assessee had bought three

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur different properties. Out of which one was residential, another one was commercial and the third residential property was under-construction. The Ld. AO restricted the deduction under section 54F of the Act with respect to one residential property costing Rs.42,50,000/-. Consequentially, the Ld. AO disallowed the claim of deduction of Rs.1,78,30,576/- under section 54F of the Act and taxed the same. Further, the Ld. AO did not allow claim of deduction of indexed cost of acquisition. Aggrieved, the assessee filed appeal before the Ld. CIT(A) belatedly after 383 days, who did not condone the delay and dismissed the appeal being inadmissible.

5.

At the outset, Shri Deepak Menghani, CA, Ld. Authorized Representative (‘AR’) of the assessee drew our attention to the fact that the addition of Rs.1,78,30,576/- was uncalled for because the issue of Capital Gains had already been examined by the Ld. AO during the course of original scrutiny assessment proceedings and no fresh material had been brought on the assessment record to have any doubt on the Capital Gains. He drew out attention to the finding of the Ld. AO in original scrutiny assessment order passed under section 143(3) of the Act, dated 08.12.2018, as under: “The assessee has filed the copies of deeds of the immovable properties sold and purchased. In computation of income filed, the calculation of income from capital gain is given. The evidence in form of purchase deeds are filed in support of deduction claimed are filed. The documents furnished are duly perused and the deduction u/s 54-F claimed Rs.1,76,37,803/- out of capital gain Rs.2,20,80,576/- is verified”.

6.

The Ld. AR further submitted that there was no new material brought on the record by the AO before reopening the assessment; hence the notice issued under

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur section 148 of the Act was not only illegal but void abinitio as it was nothing but change of opinion after above mentioned categorical finding of the AO in the original scrutiny assessment order. The Ld. AR further submitted that the non-compliance during the course of reassessment proceedings was mainly due to non-receipt of physical notices from the Department and the assessee, being 74 years old, was not acquainted with online email. Therefore, the non-compliance was bonafide and not intended to breach the law. The Ld. AR, further submitted that the email address and mobile number of the assessee’s son mentioned in her PAN and ITR on which the Ld. AO sent notices/correspondences from time to time was not brought to the knowledge of the assessee by his son; therefore, those notices were not responded to. It was further submitted that the assessee’s son was not residing with the assessee during the course of reassessment proceedings; therefore, there was no regular interaction between the assessee and her son. The Ld. AR filed affidavits of the assessee and her son stating the above mentioned explanations for non- compliances during the course of reassessment proceedings. The Ld. AR, further drew our attention that the Capital Gains of Rs.1,78,30,576/- taxed by the Ld. AO included the returned income of Rs.44,42,770/-. Thus, the addition to that extent was nothing but double taxation.

7.

On the other hand, Shri Madan Mohan Meena, Ld. Sr. DR submitted that the son of the assessee had not denied that he had never received the income tax notices addressed to her mother and he had never informed about such notices to her mother. In this internet world, physical residence had become immaterial for receipt of email. Further, none of the affidavits filed before the bench mentioned that

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur persons filing affidavits had never contacted/met each other and had not discussed about the income tax notices during the course of reassessment proceedings of the assessee. The Ld. Sr. DR drew our attention to the fact that the Ld. AO, on page 6 of the assessment order, had categorically mentioned that the last login by the assessee/her son on the income tax portal was on 12.09.2024 as evident from the ITBA CPC portal. Hence, the claim that the assessee was not aware of the reassessment proceedings did not appear justified, contended the Ld. Sr. DR. In the faceless assessment proceedings, the correspondence/notices had to be sent online only. The Ld. Sr. DR filed counter affidavit of the Ld. AO, who vehemently opposed the condonation of delay in filing appeal before the Ld. CIT(A). The Ld. Sr. DR. placing reliance on the decision of Bombay High Court in the case of Subhodh Parkash (2017) 88 taxmann.com 601, Shri Nandkishore Education Society (2017) TIOL-451-ITATI-PUNE and Ramlal vs. Rewa Coalfield Limited, AIR 1962 SC 361 opposed the condonation of delay in filing appeal before the Ld. CIT(A). Further, the Ld. Sr. DR contended that the assessee after six years from the end of the relevant year had tried to file additional evidence vide application made under Rule 29 of the ITAT Rules, 1963 on 04.08.2026. Such additional evidence, in view of the decision of Panjab and Haryana High Court in the case of Jawaharlal Jain HUF 59 taxmann.com 374 and Tribunal’s decision in the case of Shivangi Steel Pvt. Ltd. (2014) 42 taxmann.com 393 (Agra Bench) should not be admitted for the adjudication of appeal.

8.

We have taken note of the reasoning of Ld. CIT(A) while rejecting the delay condonation petition of the assessee. It is evident from the said reasoning that the

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur assessee has not made available the above mentioned affidavits of the assessee and her son to the Ld. CIT(A). After thoughtful consideration of the impugned order, we are unable to infer that whether the Ld. CIT(A) has provided any specific opportunity of being heard to the assessee before non-admitting the appeal on the issue of limitation.

9.

The right of appeal is a valuable right and unless expressly taken away or abandoned, it could not be held that the appellant had abandoned or lost such right by implication [Indian Aluminium Co Ltd. Vs. CIT 162 ITR 788 (Cal.)]. The right to appeal is not merely a matter of procedure. It is a substantive right. The Act read with the Notification F. No. S.O. 3296 (E), dated 25-9-2020 put specific restrictions and limitations on the scope and manner of exercise of the right of filing appeal and also limitations & powers of the Appellate Authorities. Considering the importance of the right to appeal of the appellant assessee, since it bestows upon him an opportunity of getting a wrong undone and to mitigate the possibility of financial loss, the right to appeal should be viewed from a broad-based liberal perspective and not by applying a strict, constricted and myopic view. The decision whether the right to appeal is available in a particular circumstance should be guided by the form and not substance of the order appealed against [CIT Vs. Ashoka Engineering Co. 63 Taxman 510/194 ITR 645 (SC)].

10.

Deciding the fate of the condonation petition without affording an opportunity of being heard to the petitioner assessee, according to us, is against the principle of natural justice. In view of the facts and circumstances of the case and above mentioned affidavits of the assessee and her son, we are of the considered view

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur that the assessee’s petition for delay condonation needs a fresh consideration by the Ld. CIT(A) as the same has been decided at the back of the assessee. We therefore, order accordingly. We are refraining from offering any comment on the merit of condonation petition and also on the merit of the case. We, in the interest of justice, set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) to decide the case afresh. In case the Ld. CIT(A) finds the said condonation petition or fresh condonation petition, if any, filed by the assessee, after affording an opportunity of being heard to the assessee, satisfactory; then she/he should decide the condonation petition first and thereafter the appeal on merit, if required, as per the law. Needless to say that the appellant assessee should ensure compliance during the remitted appellate proceeding before the Ld. CIT(A).

11.

In the result, the appeal of assessee is allowed for statistical purposes as above.

Order pronounced in the open court on 06/10/2026.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (AVDHESH KUMAR MISHRA) �ाियक सद� / JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER रायपुर / Raipur; िदनांक Dated 06/10/2026 HKS, PS आदेशकी �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. 2. ��थ�/ The Respondent 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण,

ITA No. 581/RPR/2026 Smt. Kalawati Gajwani vs. ITO-3(1), Raipur रायपुर/ DR, ITAT, Raipur 5. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER, Digitally signed Hem Kumari //True copy// by Hem Kumari Shrivastava, Shrivastava, PS, PS, ITAT, ITAT, Raipur Date: 2026.10.08 Raipur 11:56:49 +05'30' (Private Secretary) आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur

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