CHANDRA PANNEERSELVAM,VELLORE vs. PCIT., CHENNAI

आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘C’ BENCH: CHENNAI
माननीय श्री मनु कुमार धिरर ,न्याधयक सदस्य एवं माननीय श्री अमिताभ शुक्ला, लेखा सदस्य के सिक्ष
BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.91/Chny/2025
Assessment Years: 2015-16

Chandra Pannerselvam,
No.2/2, Old Munsif Court Street,
Saidapet, Vellure,
Tamil Nadu - 632 012. [PAN: AAHPP9253B]

Principal Commissioner of Income
Tax,
Circle-1,
Vellore.

(अपीलार्थी/Appellant)

(प्रत्यर्थी/Respondent)
अपीलार्थी की ओर से/ Assessee by :
Mr.N.Arjun Raj, Advocate
प्रत्यर्थी की ओर से /Revenue by :
Mr.Bipin C.N, CIT

सुनवाई की तारीख/Date of Hearing
:
16.10.2025
घोषणा की तारीख /Date of Pronouncement
:
21.11.2025

आदेश / O R D E R

PER AMITABH SHUKLA, A.M :

This appeal is filed by the assessee against the order bearing DIN
& Order No.ITBA / REV / F / REV5 / 2020-21 / 1031834593(1) dated
27.03.2021 of the Learned Principal Commissioner of Income Tax [herein after “PCIT, Chennai-8, for the assessment year 2015-16. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.
2.0
It has been noted that there is a delay of 1326 days in the case, in filing of this appeal before the tribunal. In its affidavit the assessee, a senior citizen, has pleaded that the part period of the delay is attributable
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to the Covid-19 as per Supreme Court orders. It has been submitted that the assessee has been struggling with adverse health issues and therefore could not timely monitor its tax matters. It was also argued that the impugned order u/s 263 was not received in time and that only when recovery proceedings were initiated, did the assessee learnt of adverse orders. All these activities contributed to the delay which was neither willful nor wanton. The assessee submitted that there will not be case of any non-compliance now. The Ld. DR objected to the condonation of delay. It was argued that cost be imposed upon the assessee for the impugned delay and for wasting the precious time of the courts. We have considered the justification put forth by the assessee and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters.
Accordingly, we hereby condone the delay and proceed to adjudicate this appeal.
3.0
The only issue raised in the present appeal by the assessee through its grounds of appeal is regarding the invocation of revisionary authority u/s 263 by the Ld.AO. The Ld.Counsel for the assessee took us to the factual matrix of the case available in order dated 27.03.2021 of PCIT, Chennai. Return declared income of Rs.20,04,090/- was filed on 18.11.2015. The assessee was originally selected for limited scrutiny and subsequently converted to complete scrutiny. The Ld.AO determined
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total income at Rs.73,54,900/- vide order dated 26.12.2017 u/s 143(3) after making disallowance of development charge of Rs.53,50,000/-.
The Ld.PCIT made following observations on page 2 of his order.

“…3. In the computation of LTCG, the assessee reduced the indexed cost of acquisition of the land of Rs. 6,70,273/- from the total sale consideration of plots (of Rs. 1,69,15,900/-) and arrived at LTCG of Rs. 1,62,45,627l-.

(i) During the F.Y. 1985-86 to 1987-88, the assessee had purchased 3.83 acres of land for Rs. 94,800/- through six unregistered deeds and converted the said lands into plots in F.Y. 2014-15. From 28.04.2014 to 11.06.2014, the assesseee directly sold 54 plots through 30 sale deeds for a total consideration of Rs. 1,04,82,500/-. The assessee had given a GPA to one Shri R. Jayaraman on 25.08.2014. From 4.9.2014 to 23.09.2014, the GPA holder sold 27 plots through 25 sale deeds for Rs. 64,56,900/-. At the time of assessment proceedings, the genuineness of sale by GPA holder and receipt of sale proceeds from GPA holders had not been examined. Also, FMV of the land on the date of conversion ought to have been examined.

ii) In F.Y. 2014-15, the assessee had purchased two immovable properties respectively for Rs. 61,41,520/- (on 5.5.2014) and Rs.
1,19,90,000/- (on 30.09.2014). Sources for this investment ought to have been examined during complete scrutiny.

(iii) In respect of plots sold, treating them as stock in trade, the assessee had drawn an Income & Expenditure Account in which she had admitted sale consideration of plots at Rs. 1,69,15,900/- and SB interest of Rs. 53,455/- as income. Against this income, the assessee claimed the following expenses :

a) Cost of Plots Rs. 1,69,15,000/- b) Land levelling /E TAX D Rs, 1,18,32,560/- c) Construction of bridge - Rs.9,75,000/- d) Business promotion - Rs. 8,27,510/-
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e) Commission- Rs. 3,38,318/-and arrived at a business loss of Rs.1,43,43,535/- This business loss was adjusted against the LTCG and taxable LTCG of Rs. 19,60,647/- was arrived at. On perusal of records, it is observed that following issues have not been examined by the Assessing Officer during the course of assessment proceedings.
1. Genuineness of land levelling expenses
2. Genuineness of other expenses claimed
3. Basis for disallowance of Rs. 53,50,000/- out of Rs.
1,18,00,000/- claimed towards land leveling.
4. If the business loss is considered then investment in the property should be considered for assessment….”

Based upon the above, observations the Ld.PCIT concluded that the order passed by the Ld.AO was erroneous in so far as it was prejudicial to the interest of the Revenue finally including as under:

“….In view of the above, it was held that the order dt. 26.12.2017 passed by the Assessing Officer u/s 143(3)of the Income-tax Act, 1961 for the Assessment Year
2015-16 in the assessee's case, was erroneous as it is prejudicial to the interests of revenue within the meaning of the provisions of Section 263 of the I.T. Act.
A Notice for hearing in respect of Revision proceedings u/s 263 of the Income Tax
Act 1961 in A.Y. 2015-16 was issued on 18.02.2021 wherein the assessee was given an opportunity of being heard on 25.02.2021. Subsequently, another hearing letter issued on 04.03.2021
posted the case on 11.03.2021. In response, the assessee filed a written submission through e-proceedings wherein it was stated as under:

This was very well examined and considered by the AO at the time scrutiny proceedings. Further, I like to mention for your kind information that all the purchase deeds from FY 1985-86 to 1987-88 are registered sale deeds and not unregistered documents as mentioned in the notice.

The order is passed after making inquiries or verification which should have been The Assessing Officer, exercising its quasi-judicial power, had issued a detailed questionnaire u/s 142(1) which was duly answered by way of various details, explanations and letters. Complete books of account, details of sales, sale documents, purchase documents, vouchers for all expenditure shown in the Income
& Expenditure account, the details of investment in properties during the year etc, supported with documentary evidences were produced and the Assessing Officer has specifically gone into each and every one of the issues and raised specific queries on all points mentioned in the notices issues u/s 142(1), passed the order after examining carefully during the assessment proceedings. When the Assessing Officer examined all the details and submissions by the assessee, the order could not be said to be erroneous or was passed without application of mind merely because the same was not elaborate order. If a query is raised during the course of scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision.

connection with plots sold during the year. Besides, she computed Capital
Gains also for the same plot sold. This also is not acceptable.
Accordingly, the Profit/Income determined by the assessee is not acceptable as per the provisions of Income Tax Act. The above said fact was not examined by the Assessing Officer during the course of Assessment Proceeding. Thus, the conditions for invoking revisional juri iction u/s 263 of the Act are satisfied and l hold that the assessment
Order dated 26.12.2017 passed u/s 143(3) of the Act is to be subjected to revision u/s 263. Hence, the Assessment Order is hereby set aside witha direction to examine the aspect discussed in the body of the order (supra) and pass the fresh Assessment Order within the stipulated time after providing sufficient opportunities to the assessee. The assessee has full liberty to present any material which was not submitted earlier before the Assessing Officer at the time of assessment proceedings !!...”

Ld.PCIT has merely reproduced the submissions of the assessee in para
6 to 6.4 of his order, so as to conclude in para 7, extracted hereinabove, in a superfluous and unilateral manner that the order of Ld.AO was erroneous in so far as it prejudicial to the interest of revenue u/s 263. No detailed findings have been given to substantiate these views. Again in para 7 of his order the findings have been found to be unclear and self- contradictory and totally devoid of any meaningful understanding of the matter. We are of the considered view that in the interest of justice, it would be worthwhile to remit the matter back to the file of Ld.PCIT for passing his order afresh. Accordingly, the order of Ld.PCIT u/s 263
dated 27.03.2021 is set aside with the directions to readjudicate the matter de novo, in accordance with law, after giving opportuning of being heard to the assessee and by passing a speaking order. The decision to remit the matter to the Ld. AO is however subject to payment of cost of Rs.25,000/- (Rupees twenty five thousand only) by the assessee to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within 30 days of the receipt of this order. Accordingly, all the grounds of appeal raised by the assessee are allowed for statistical purposes.
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