AMBI SUBRAMANIAM PRASANNA,VELACHERY vs. ITO , NON-CORPORATE WARD 17(2), CHENNAI

PDF · subscribers
ITA 3648/CHNY/2026Status: DisposedITAT Chennai21 October 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee's appeal before the NFAC was not adjudicated on its substantive merits but was dismissed in limine due to the delay in filing. After reviewing the submissions made by the assessee before the NFAC, the Tribunal found the reasons provided for the delay to be reasonable. Consequently, the Tribunal restored the matter back to the file of the NFAC. The direction was for the NFAC to condone the delay, subject to the assessee filing a condonation application, and to rehear the appeal after providing the assessee with a proper opportunity of being heard, in terms of Section 282 of the Act. The assessee was also directed to be vigilant and cooperative before the NFAC. The grounds raised by the assessee were allowed for statistical purposes only. The Tribunal made no comment on the legality or merits of the case, leaving the substantive issues undecided at this stage.

What were the facts?

The assessee, Ambi Subramaniam Prasanna, filed an appeal before the National Faceless Appellate Authority (NFAC), Delhi, for Assessment Year 2019-20. The NFAC dismissed the appeal in limine (at the outset) due to a delay of 284 days in filing. The assessee had initially not filed a return of income. A notice under Section 148 of the Income Tax Act, 1961, was issued on March 31, 2023. The assessee filed a return on September 9, 2023, which was considered non-est as it was filed after the prescribed due date. The Assessing Officer (AO) assessed the total income at Rs. 52,14,112/- under Section 147 read with Section 144B of the Act. The assessee, aggrieved by the NFAC's order, filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the NFAC erred in treating the appeal as time-barred under Section 249(2) of the Income Tax Act, 1961, and dismissing it without proper reasons and justification? The assessee contended that the NFAC failed to appreciate that Section 249(2) envisaged discretion to entertain belated appeals under Section 249(3) if sufficient cause was shown for the delay. The assessee argued that the reasons for the 284-day delay were provided in the condonation petition and ought to have been considered sufficient cause. The revenue's contentions are not recorded. 2. Whether the NFAC erred in impliedly confirming the assumption of jurisdiction under Section 147 of the Act and the subsequent reassessment order without proper reasons? The assessee argued that the assumption of jurisdiction under Section 147 was without sanction of law, the reassessment order was passed out of time, and thus invalid. The assessee also raised issues regarding the procedure under Section 148A(d) and the impact of amendments by the Finance Act, 2026, including the potential for inconsistent jurisdiction and pending litigation before the Hon'ble Apex Court. The revenue's contentions are not recorded. 3. Whether the NFAC erred in sustaining the AO's action in reckoning the appellant's share of Long-Term Capital Gains (LTCG) from a Joint Development Agreement (JDA) at Rs. 49,55,078/- without proper reasons? The assessee argued that the NFAC failed to appreciate the actual nature of the JDA and did not examine the claim for deduction under Section 54F. The revenue's contentions are not recorded. 4. Whether the NFAC erred in sustaining the disallowance of deduction under Section 80C of the Act to the tune of Rs. 1,04,054/-? The assessee argued that the NFAC failed to independently examine the nature and source of disputed transactions. The revenue's contentions are not recorded. 5. Whether the NFAC erred in sustaining the reassessment and appellate orders without adhering to the prescription of the faceless regime and without providing a proper opportunity of being heard, thus violating principles of natural justice?

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 144B,Section 249(2),Section 249(3),Section 54F,Section 80C,Section 139,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: 20.08.2026Pronounced: 21.10.2026

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. 3648/Chny/2026 ननिाारण वर्ा /Assessment Years: 2019-20 Ambi Subramaniam Prasanna v. Income Tax Officer, Old No.7, New No.12, Nethaji Colony, Non-Corp Ward-17(2), 2nd Main Road, Chennai-600 042. Chennai. [PAN: AOLPP8787J] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. A. G. Sudharshan, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. R. Raghupathy, Addl. CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 20.08.2026 घोषणाकीतारीख /Date of Pronouncement : 21.10.2026 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 27.04.2026 for the Assessment Year (hereinafter referred as the ‘AY’) 2019-20.

GROUDS OF APPEAL

1.

The order of the NFAC, Delhi dated 27.04.2026 vide DIN & Order No. ITBA/NFAC/S/250/2026-27/1088647939(1) for the above-mentioned Assessment Year is contrary to law, fact and in circumstances of the case. 2. The NFAC, Delhi erred in treating the appeal preferred before them as time barred in terms of Section 249(2) of the Act and consequently erred in dismissing the appeal without assigning proper reasons and justification. 3. The NFAC, Delhi failed to appreciate that the statutory requirement of filing the appeal before the First Appellate Authority within 30 days from the date of receipt of the order in terms of Section 249(2) of the Act was erroneously considered as mandatory and ought to have

ITA No.3648/Chny/2026 Ambi Subramaniam Prasanna appreciated that the said provisions envisaged discretion vested with the authority to entertain belated appeals subject to the satisfaction on the reasons shown for the belated filing in terms of Section 249(3) of the Act, thereby vitiating the impugned order in its entirety. 4. The NFAC, Delhi failed to appreciate that reason for filing the appeal before the First Appellate Authority belatedly by 284 days was captured in Form No. 35/petition for condonation and ought to have been considered the same as 'sufficient cause' and further ought to have appreciated that the non-consideration of the said reasons would vitiate the order under consideration on this preliminary issue. 5. The NFAC, Delhi erred in impliedly confirming the assumption of jurisdiction under Section 147 of the Act and consequently erred in impliedly confirming the passing of the order of re- assessment without assigning proper reasons and justification. 6. The NFAC, Delhi failed to appreciate that the assumption of jurisdiction under Section 147 of the Act was without sanction of law and ought to have appreciated that the consequential re- assessment order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 7. The NFAC, Delhi failed to appreciate that having not followed the prescription of law/procedure for framing the re-assessment, the consequential re-assessment order passed should be reckoned as nullity in law for want of jurisdiction. 8. The NFAC, Delhi failed to appreciate that the passing of the order under Section 148A(d) of the Act by the JAO would completely defy the prescription of law/procedure in relation thereto and hence ought to have appreciated that in the absence of valid foundation for issuance of notice under Section 148 of the Act, the consequential re-assessment should be considered as nullity in law. 9. The NFAC, Delhi failed to appreciate that the amendment brought in by Finance Act, 2026 by way of insertion of Section 147A of the Act would still not cure the inconsistency of the jurisdiction with respect to 2 different Assessing Officers exercising jurisdiction with respect to the same assessment, which is impermissible in law. 10. The NFAC, Delhi failed to appreciate that the said issue as well as the amendment has not attained finality in view of the same being the subject matter of pending proceedings in consequence to the recent judgement of the Hon'ble Apex Court as well the pending PIL filed by the Revenue Bar Association in W.P. No. 21494/2026, thereby vitiating the assumption of jurisdiction under Section 147 of the Act leading to the passing of the consequential impugned order. 11. The NFAC, Delhi erred in sustaining the action of the Assessing Officer in reckoning the appellant's share of Long-Term Capital Gains arising from the Joint Development Agreement with the builder, Mr. P. Rajesh, (PAN No. AGZPR9488A) at Rs. 49, 55,078/- in the computation of taxable total income without assigning proper reasons and justification. 12. The NFAC, Delhi failed to appreciate that assessment of such sum as Long Term Capital Gains in the hands of the appellant herein without examining the actual nature of the JDA entered by the appellant would vitiate the impugned order passed on gross non application on mind.

Page 2 of 4

ITA No.3648/Chny/2026 Ambi Subramaniam Prasanna 13. The NFAC, Delhi erred in not examining the claim of deduction under Section 54F of the Act arising from the said transaction in the computation of taxable total income without assigning proper reasons and justification. 14. The NFAC, Delhi erred in sustaining the disallowance of claim of deduction under Section 80C of the Act to the tune of Rs. 1,04,054/- and consequently erred in sustaining the addition of such sums as income of the appellant in the computation of taxable total income without assigning proper reasons and justification. 15. The NFAC, Delhi failed to appreciate that, in any event, having not independently examined the nature and source of the disputed transactions under consideration, the consequential sustenance of the additions as income of the appellant in its entirety was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 16. The NFAC, Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential re-assessment order and appellate order passed should be reckoned as bad in law. 17. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 18. The Appellant craves leave to file additional grounds/arguments at the time of hearing.

2.

The brief facts of the case are that the assessee was amongst the non-filers of the return u/s. 139 of the Act. As per the information available with the department, the assessee has sold immovable property amounting to Rs. 81,91,500/- (Rs. 21,78,000/- + Rs. 60,13,500/-) and also received salary of Rs. 4,53,815/-. In view of this a notice u/s. 148 of the Act was issued vide dated: 31.03.2023, in response to the same the assessee filed his return of income on 09.09.2023 (which is non-est in law as the same is filed after the due date as prescribed in section 148 of the Act) declaring total income at Rs. 1,54,980/-. Ultimately, the case of the assessee was assessed u/s. 147 r.w.s. 144B of the Act at Rs. 52,14,112/- under the head long 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 in limine on the ground of delay in filing the appeal by 284 days and delay was not condoned. The assessee being further aggrieved with the same preferred the present appeal before us.

Page 3 of 4

ITA No.3648/Chny/2026 Ambi Subramaniam Prasanna 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 appeal of the assessee was not adjudicated on substantive basis rather dismissed in limine as the same was barred by limitation. We have gone through the submissions of the assessee before the Ld. CIT(A) and found the same to be a reasonable cause for delay in filing the appeal. Hence, without any comment on the legality or merits of the case, we restore the matter back to the file of the Ld. CIT(A) with a direction to condone the delay (against the condonation application to be filed by the assessee) and rehear the matter after giving the assessee a proper opportunity of being heard in terms of section 282 of the Act. The assessee is also directed to file an application for condonation of the delay in filing of appeal and to be vigilant and cooperative enough this before the Ld. CIT(A). Resultantly, the grounds raised by the assessee are allowed for statistical purposes only. 4. In the result, the appeal of the assessee is allowed for statistical purposes only. Order pronounced on the 21st 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: 21st 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 K Digitally signed 5. गार्ड फाईल/GF by K BABU Date: BABU 2026.10.26 09:38:19 +05'30'

Page 4 of 4

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →