MOHAN BHUVANESWARI,COIMBATORE vs. CIT, COIMBATORE

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ITA 2587/CHNY/2026Status: DisposedITAT Chennai04 November 2026AY 2018-20195 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal acknowledged the assessee's lack of diligence in complying with notices and appearing before the authorities. However, in the interest of substantial justice and to ensure adjudication on merits, the Tribunal decided to afford the assessee one more opportunity. Consequently, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the AO for a de novo assessment. The AO was directed to re-examine the issues, specifically the computation of long-term capital gains, the claim for the cost of improvement, and the treatment of cash consideration, after considering any documentary evidence furnished by the assessee. The Tribunal explicitly stated that no opinion was expressed on the merits of the additions, leaving all issues open for fresh consideration. The assessee was directed to cooperate with the proceedings, and the AO was given liberty to proceed as per law in case of further non-compliance. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Mohan Bhuvaneswari, is an individual who did not file a return of income for Assessment Year 2018-19. The Income Tax Officer (ITO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, upon learning that the assessee sold an immovable property for Rs. 35,00,000/-. Despite notices, the assessee failed to file a return, submitting only a computation of income and partial replies with documents. The Assessing Officer (AO) noted Rs. 11.57 lakhs received in cash and a cost of improvement of Rs. 22,91,304/-. Lacking substantiating evidence, the AO made additions of Rs. 35,00,000/- as undisclosed long-term capital gain, disallowed Rs. 22,91,304/- from LTCG, and treated Rs. 11.57 lakhs as unexplained money, arriving at a total income of Rs. 46,57,000/-. The Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the AO's order ex parte after the assessee failed to appear for multiple hearings.

What were the issues?

1. Whether the Tribunal should decide the appeal on merits given the assessee's consistent non-compliance with statutory notices and failure to appear before the lower authorities and the Tribunal, or if substantial justice requires a fresh examination of the facts. (Mixed question of law and fact) Assessee's contentions: None recorded, as the assessee did not appear. Revenue's contentions: The Revenue, through the Senior Departmental Representative (Sr. DR), supported the orders of the lower authorities and prayed for the dismissal of the appeal due to the assessee's negligence and non-compliance with statutory notices.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA

For Respondent: Mr. SB Chakraborthy, Sr. DR
Hearing: 06.10.2026Pronounced: 04.11.2026

आदेश /O R D E R

PER S. R. RAGHUNATHA, AM :

The present appeal is filed by the assessee against the order dated 16.02.2026 passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 26.02.2024 passed

:-2-: ITA. No:2587/Chny/2026.

u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2018-19. 2. Brief facts of the case are that the assessee is an individual and did not file her return of income for the AY 2018-19. As per the information available with the department, the AO noticed that the assessee has sold an immovable property for a sale consideration of Rs.35,00,000/- during the assessment year. The case was re-opened u/s.147 of the Act and accordingly the notice u/s.148 of the Act and statutory notices were issued to the assessee and by calling for details. In response, the assessee failed to file the return of income and merely submitted computation of income and the assessee has partly submitted the reply along with supporting documents for the year consideration. On perusal of the registered sale deed submitted by the assessee, the AO found that the assessee had received Rs.11.57 lakhs in cash and the cost of improvement shown in the computation of Capital Gain was Rs.22,91,304/-. Since the assessee failed to furnish the supporting evidence details to substantiate her claim, the AO concluded the assessment by passing an order u/s.147 r.w.s 144 r.w.s 144B of the Act dated 26.02.2024 by making the additions of Rs.35,00,000/- as undisclosed long term capital gain and disallowance to the tune of Rs.22,91,304/- from LTCG and amount of Rs.11.57 lakhs as unexplained money and arrived the total income of Rs.46,57,000/-.

3.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 04.09.2024.

4.

At the outset, we observed that ld.CIT(A) has provided three opportunities for the assessee to appear for hearings as detailed in paragraph 6.3 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A) passed an exparte order dated 16.02.2026 by confirming the order of the AO.

:-3-: ITA. No:2587/Chny/2026.

5.

Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. We note that none appeared before us to represent the assessee’s appeal.

Per contra, the ld.DR supported the order of lower authorities and 6. prayed for dismissing the appeal of the assessee as the assessee is negligent in responding / complying with the statutory notices.

7.

We have heard the submissions of the Ld.DR and perused the material available on record, including the orders of the authorities below. We note that the assessee had not filed her return of income for the assessment year under consideration. Based on the information available with the Department regarding the sale of an immovable property for a consideration of Rs.35,00,000/-, the AO initiated reassessment proceedings and completed the assessment u/s.147 r.w.s 144 and 144B of the Act. While completing the assessment, the AO made additions in respect of the sale consideration of the immovable property, disallowed the cost of improvement claimed by the assessee amounting to Rs.22,91,304/- for want of supporting evidence, and treated the cash amount of Rs.11.57 lakhs as unexplained money. We further note that, although the assessee had furnished a computation of income and partly responded to the notices issued by the AO, the requisite supporting documentary evidence was not furnished to substantiate the claims made. Subsequently, the Ld.CIT(A) afforded three opportunities to the assessee to represent her case during the appellate proceedings. However, there was no compliance on the part of the assessee, and the Ld.CIT(A) proceeded to dispose of the appeal ex parte, confirming the assessment order. Before us also, none appeared on behalf of the assessee to substantiate the grounds raised in the appeal. The Ld.DR, accordingly, supported the orders of the

:-4-: ITA. No:2587/Chny/2026.

authorities below and prayed for dismissal of the appeal on account of the assessee’s continued non-compliance. 8. Having considered the facts and circumstances of the case and the material available on record, we are of the considered view that the issues involved in the present appeal require fresh examination on the basis of relevant facts and supporting evidence. We acknowledge that the assessee has not been diligent in complying with the notices issued by the authorities below and has also failed to appear before this Tribunal. Nevertheless, in the interest of substantial justice and to ensure that the matter is adjudicated on its merits, we deem it appropriate to afford the assessee one more opportunity to substantiate her claims. Accordingly, we set aside the impugned order of the Ld.CIT(A) and restore the matter to the file of the AO for de novo assessment. The AO is directed to examine the issues afresh, particularly the computation of long-term capital gains, the assessee’s claim towards the cost of improvement, and the treatment of the cash consideration received on the transfer of the immovable property, after duly considering the relevant facts and documentary evidence that may be furnished by the assessee. The AO shall thereafter pass a speaking order in accordance with law after providing a reasonable opportunity of being heard to the assessee.

9.

We make it clear that we have not expressed any opinion on the merits of the additions made by the AO, and all issues are left open for fresh consideration in accordance with law. The assessee is directed to cooperate with the assessment proceedings, comply with the statutory notices issued by the AO, and furnish the requisite details, explanations and supporting documentary evidence within the time allowed. The assessee shall not take the opportunity now granted for granted, and the AO shall be at liberty to proceed in accordance with law in the event of any further non-compliance.

:-5-: ITA. No:2587/Chny/2026.

10.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 04th November, 2026 at Chennai. Sd/- Sd/- (मनु कुमार �ग�र) (एस. आर. रघुनाथा) (MANU KUMAR GIRI) (S. R. RAGHUNATHA) �या�यक सद�य/Judicial Member लेखासद�य/Accountant Member �ई/Chennai, िदनांक/Dated, the 04th November, 2026 Devadas EJTADA Digitally signed by EJTADA DURGA DURGA NARESH आदेश क� ��त�ल�प अ�े�षत/Copy to: Date: 2026.11.09 NARESH 14:50:42 +05'30' 1. अपीलाथ&/Appellant 2. '(यथ&/Respondent 3.आयकर आयु>त/CIT– Chennai/Coimbatore/Madurai/Salem 4. Lवभागीय '�त�न�ध/DR 5. गाड$ फाईल/GF

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