ANANDAN JOTHI,KANCHEEPURAM vs. ITO, NCW-22(1), CHENNAI

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ITA 3603/CHNY/2026Status: DisposedITAT Chennai13 October 2026AY 2016-174 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that both the AO and CIT(A) extended cooperation to the assessee, but the assessee did not participate in the proceedings. The Tribunal found the grounds raised by the assessee to be frivolous and baseless. However, adhering to its consistent view of dealing with substantive orders for fair tax liability assessment, the Tribunal decided to give a final opportunity to the assessee. The matter was restored to the file of the AO for reconsideration. The assessee was directed to represent the case before the AO with relevant evidence, substantiate arguments, and cooperate without seeking adjournments. The appeal was allowed for statistical purposes only, with the delay of 117 days in filing the appeal being condoned. The operative direction is to restore the matter to the AO for fresh consideration after providing a proper opportunity of being heard as per Section 282.

What were the facts?

The assessee, Anandan Jothi, filed an appeal before the ITAT Chennai against the order of the CIT(A), Delhi, for Assessment Year 2016-17. The assessee was a non-filer. The Revenue had information that the assessee sold immovable property for Rs. 6.15 Cr, with her share being Rs. 1.3 Cr. A notice under Section 148 was issued on 03.04.2023. The assessee did not file a return. The Assessing Officer (AO) assessed the case under Section 144, 147 r.w.s. 144B, making an addition of Rs. 1.3 Cr as short-term capital gains. The CIT(A) dismissed the assessee's appeal on technical grounds for non-submission of explanation and evidence. The assessee's appeal to the ITAT was filed with a delay of 117 days.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal on technical grounds instead of adjudicating it on merits, and whether the assessee was provided with sufficient opportunity of being heard (related to Section 282)? 2. Whether the AO erred in reopening the assessment without having information suggesting income escaping assessment under Explanation 1 to Section 148, and without conducting inquiry under Section 148A(a) prior to issuing notice under Section 148(1)(b)? 3. Whether the notice under Section 148 was barred by limitation, as preconditions in Section 149(1)(b) and the first proviso to Section 149(1) were not satisfied, and whether the third and fourth provisos to Section 149(1) apply to the first proviso? 4. Whether the notice under Section 148 was invalid and without jurisdiction as it was not issued in accordance with Section 151A read with Notification S.O. 1466(E) dated 29.03.2022? 5. Whether the AO erred in rejecting the assessee's submissions and making an addition of Rs. 1,30,00,000/- as short-term capital gain without deducting indexed cost of acquisition, and without considering that the property sold was agricultural land and not a capital asset under Section 2(14) as it was beyond 8 kilometers from Chennai Municipal Corporation limits? Assessee's Contentions: The CIT(A) erred in dismissing the case on technical grounds, failing to provide sufficient opportunity to be heard, and not appreciating the AO's arbitrary assessment. The AO erred in reopening without proper information, without conducting Section 148A inquiry, and issuing a time-barred notice under Section 148. The notice was invalid due to non-compliance with Section 151A. The AO wrongly rejected submissions, added the entire sale consideration without deducting indexed cost, and failed to consider the property as agricultural land, not a capital asset under Section 2(14) due to its location. The revenue did not provide arguments on these points in the judgment.

Which sections of the Income-tax Act were involved?

Section 139,Section 148,Section 148A,Section 149,Section 151A,Section 2(14),Section 144,Section 147,Section 144B,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K. & SHRI GAGAN GOYAL

Hearing: 19.08.2026Pronounced: 13.10.2026

आयकर अपीलीय अधिकरण ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री जॉजज जॉजज के., उपाध्यक्ष एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE GEORGE GEORGE K., VICE PRESIDENT AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 3603/Chny/2026 ननिाारण वर्ा /Assessment Years: 2016-17 Anandan Jothi, v. Income Tax Officer, W/o. N. Anandan, Non Corp. Ward-22(1), No.1-35, Bajanai Koil Street, Chennai. Mambakkam, Kancheepuram, Tamil Nadu-600 127. [PAN: BXHPJ6406Q] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Sricharan, C.A, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. R. Raghupathy, Addl. CIT Ld. DR सुनवाईकीतारीख/Date of Hearing : 19.08.2026 घोषणाकीतारीख /Date of Pronouncement : 13.10.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’), Delhi dated 30.12.2025 for the Assessment Year (hereinafter referred as the ‘AY’) 2016-17.

GROUDS OF APPEAL 1 The order of the Commissioner of Income Tax (Appeals) ["CIT (A)" is against the law, the facts and circumstances of the case and the principles of equity and natural justice. 2 The CIT (A) erred in dismissing the case on technical grounds instead of adjudicating it on merits. 3. The CIT (A) ought to have provided the Appellant with sufficient opportunity of being heard.

ITA No.3603/Chny/2026 (2016-17) Anandan Jothi 4 The CIT (A) failed to appreciate that the assessing officer completed the assessment in an arbitrary manner without objectively considering the material available on his record. 5 The CIT (A) failed to appreciate that the assessing officer erred in reopening the assessment without having any information which suggests that income chargeable to tax has escaped assessment within the meaning of Explanation 1 to section 148 of the Act. 6. The CIT (A) failed to appreciate that the assessing officer erred in not conducting any enquiry under section 148A (a) of the Act prior to issuing the notice under section 148.1(b) of the Act. 7. The CIT (A) failed to appreciate that the Assessing Officer erred in initiating the reassessment proceedings particularly when there is no income escaping assessment. 8. The approval granted by the Principal Chief Commissioner of Income Tax for reopening of the assessment is without application of mind and the reopening based on such approval is required to be quashed. 9. The CIT(A) failed to appreciate that the notice under section 148 of the Act is barred by limitation as none of the preconditions contemplated in section 149(1)(b) of the Income Tax Act, 1961 ["Act"] has been satisfied. 10 The CIT(A) failed to appreciate that the notice under section 148 of the Act has been issued after the expiry of time limit contemplated in the first proviso to section 149(1) of the Act and the said notice is barred by limitation and consequent assessment proceedings is bad in law and liable to be quashed. 11. The CIT(A) failed to appreciate that the third and fourth proviso to section 149(1) of the Act do not apply in respect of the time limit contemplated under the first proviso to section 149(1) of the Act. 12. The CIT(A) failed to appreciate that the notice under section 148 of the Act is invalid and without jurisdiction as it has not been issued in accordance with section 151A of the Act read with Notification S.O. 1466(E) [NO. 18/2022/F. NO. 370142/16/2022-TPL(PART1] dated 29.03.2022. Therefore, consequent assessment order is bad in law and liable to be quashed. 13. The CIT (A) failed to appreciate that the Assessing Officer erred in rejecting the submissions made by the Appellant without objectively considering the material facts stated by the Appellant. 14. The CIT (A) failed to appreciate that the Assessing Officer did not provide the Appellant with a copy of the sale deed relied upon by him while making the addition. 15. The CIT (A) failed to appreciate that the property sold by the Appellant was an agricultural land and was not a capital asset under section 2(14) of the Act. 16. The CIT (A) failed to appreciate that the agricultural land sold by the Appellant falls beyond 8 kilometers from the limits of Chennai Municipal Corporation and hence, the same is not a capital asset under section 2(14). 17. The CIT (A) failed to appreciate that the assessing officer erroneously made addition of the entire sale consideration of Rs. 1,30,00,000/- as short-term capital gain.

ITA No.3603/Chny/2026 (2016-17) Anandan Jothi 18. Without prejudice to the ground that no capital gains arise in the hands of the Appellant, the CIT (A) failed to appreciate that the assessing officer erred in assessing the gross consideration as capital gains without deducting the indexed cost of acquisition. 19. The Appellant craves the leave of your Honours to adduce additional grounds in support of its contentions before and during the course of hearing of this appeal.

2.

The brief facts of the case are that the assessee was amongst the non-filers of return u/s. 139 of the Act. But the revenue was in possession of an information that the assessee has sold immovable property for total sales consideration of Rs. 6.15 Cr, in which the assessee has share of Rs. 1.3 Cr. In view of this information a notice u/s. 148 of the Act was issued vide notice dated: 03.04.2023, in response to the same the assessee has not filed any return of income. Ultimately, the case of the assessee was assessed u/s. 144, 147 r.w.s. 144B of the Act after making addition of Rs. 1.3 Cr under the head short term capital gains. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee on the ground as no explanation and relevant evidences were adduced before him. The assessee being further aggrieved preferred the present appeal before us with a delay of 117 days.

3.

We have gone through the order of the AO, order of the Ld. CIT(A) and submissions of the assessee alongwith grounds taken before us. It is observed that the AO and the Ld. CIT(A) extended their fullest possible cooperation to the assessee, especially the AO by referring the matter to verification unit for physical service of notice and JAO for gathering relevant information about the assessee. But the assessee never turned up to participate in the assessment proceedings. Almost the same attitude was there before the Ld. CIT(A) also. Still, it is observed that the assessee took all the grounds only to allegating the authorities below, which is not acceptable to the bench.

4.

All the grounds raised by the assessee are found to be frivolous and baseless, still as this tribunal has a consistent view, i.e. endeavour is all always to deal with substantive orders for sake of fair and reasonable assessment of tax liability. In view of this, we deem it fit to give a final opportunity to the assessee,

ITA No.3603/Chny/2026 (2016-17) Anandan Jothi where he can represent his case before the AO again with relevant evidence to substantiate his arguments (otherwise filed before us). The matter is restored back to the file of the AO for reconsideration based on the evidence adduced by the assessee after giving a proper opportunity of being heard as per the provisions of section 282 of the Act. The assessee is also to be vigilant and cooperative enough this time while appearing before the AO, without seeking any adjournment. Resultantly, the grounds raised by the assessee are allowed for statistical purposes only with condonation of delay in filing this appeal by 117 days.

5.

In the result, the appeal of the assessee is allowed for statistical purposes only and Order pronounced on the 13th day of October, 2026 in Chennai.

Sd/- Sd/- (जॉजा जॉजा के.) (गगन गोयल) (GAGAN GOYAL) (GEORGE GEORGE K.) लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष /VICE PRESIDENT चेन्नई/Chennai, ददनाांक/Dated: 13th October, 2026. KB आदेश की प्रततललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रतततनधि/DR 5. गार्ड फाईल/GF Digitally signed K BABU by K BABU Date: 2026.10.16 09:16:45 +05'30'

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