SEETHA BALU,CHENNAI vs. ITO, NCW-1(7), CHENNAI

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ITA 2255/CHNY/2025Status: DisposedITAT Chennai30 October 2025AY 2013-145 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the significant delays in filing the appeals, finding sufficient cause for the assessee's failure to file within the prescribed time. Regarding the ex-parte orders, the Tribunal acknowledged that both the A.O. and CIT(A) passed orders without the assessee furnishing requisite details and noted the assessee's negligence. However, upholding the principles of natural justice, the Tribunal decided to grant the assessee one more opportunity to substantiate her case. Consequently, the impugned assessment order was set aside, and the matter was remitted back to the A.O. for a denovo assessment after affording a reasonable opportunity of being heard. The assessee was directed to comply with all notices and furnish relevant details. For ITA No. 2255/Chny/2025, the penalty levied under Section 271(1)(c) was held to be unsustainable as it was based on the assessment order that was set aside. The A.O. was granted liberty to initiate and levy penalty while passing the fresh assessment order. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, Seetha Balu, an individual, failed to file her return of income for Assessment Year 2013-14. The Assessing Officer (A.O.) reopened the assessment based on information that the assessee had sold an immovable property for Rs. 1,17,00,000/- against a market value of Rs. 7,26,96,000/-. The A.O. completed the assessment under Section 147, making additions of Rs. 17,31,269/- as business income and Rs. 3,90,000/- as Long-Term Capital Gains (LTCG) due to the assessee's failure to provide details. The assessee's appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] was dismissed ex-parte for non-compliance with notices. The assessee filed appeals before the ITAT with significant delays, which were condoned.

What were the issues?

1. Whether the Tribunal should condone the delay of 500 days in filing ITA No. 2254/Chny/2025 and 470 days in ITA No. 2255/Chny/2025, turning on the principles of natural justice and the assessee's explanation for the delay. The assessee argued that there was sufficient cause for the delay. The revenue did not record any specific argument on this point. 2. Whether the ex-parte assessment order passed by the A.O. under Section 147 and the ex-parte order of the CIT(A) were valid, turning on the principles of natural justice and the opportunity of being heard under Section 144. The assessee contended that both authorities passed orders ex-parte without providing sufficient opportunity to present her case and requested one more opportunity. The revenue relied on the orders of the lower authorities and requested dismissal of the appeal. 3. Whether the penalty of Rs. 4,40,022/- imposed under Section 271(1)(c) for concealment of income survives, given that the assessment order on which it is based has been set aside. The assessee implicitly argued that the penalty is unsustainable if the assessment is flawed. The revenue relied on the lower authorities' orders.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI JAGADISH

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid two appeals filed by the assessee for Assessment Years (AYs) 2013-14 arises out of the orders of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 12.01.2024 & 09.02.2024.

1.

& 2255/Chny/2025 Seetha Balu :- 2 -: The assessee has filed condonation petitions/affidavits stating the reasons for delay in filing the appeals. We have considered the petitions/affidavits of delay in filing the appeals and satisfied that there was sufficient cause for not filing the appeals within the prescribed time limit. Hence, the delays in both the appeals are hereby condoned.

3.

The assessee is an individual and had not filed her return of income for the relevant assessment year. The A.O on the basis of information that the assessee, along with other co-owners, had sold an immovable property valued at Rs.1,17,00,000/-, against the market value of the said property was Rs.7,26,96,000/-, but has not filled return of income, reopened the assessment. The A.O. thereafter completed the assessment u/s. 147 of the Act by making additions of Rs. 17,31,269/- as income from business and profession and Rs.3,90,000/- as income under the head Long-Term Capital Gains (LTCG), as the assessee had failed to file the details called for.

Aggrieved, the assessee preferred an appeal before the Ld. CIT(A).

However, the Ld. CIT(A) dismissed the appeal ex-parte as the assessee failed to comply with the notices issued.

& 2255/Chny/2025 Seetha Balu :- 3 -: 4. The Learned Authorized Representative (Ld. A.R) contended that the A.O and the Ld. CIT(A) passed orders ex-parte without giving sufficient opportunity to substantiate her case. It was therefore submitted that one more opportunity may be granted to the assessee to present her case before the A.O.

5.

The Learned Departmental Representative (Ld. D.R) relied on the orders of the lower authorities and requested that the appeal be dismissed.

6.

We have heard the rival submissions and perused the materials available on record. We find that both the A.O and Ld. CIT(A) passed orders ex-parte as the assessee did not respond to the notices issued and failed to furnish requisite details. It is noted that the assessee has been negligent in pursuing the matter both before the A.O and the Ld. CIT(A). However, keeping in view the principles of natural justice, we are of the opinion that one more opportunity should be granted to the assessee to substantiate her case before the A.O. Accordingly, we set aside the impugned order and remit the matter back to the file of the A.O for denovo assessment in accordance with law, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with all the notices issued by the A.O and & 2255/Chny/2025 Seetha Balu :- 4 -: furnish all relevant details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

7. This appeal relates to the levy of penalty of Rs.4,40,022/- imposed u/s. 271(1)(c) of the Act for concealment of income in respect of the addition made in the assessment order passed u/s. 144 of the Act. The Ld. CIT(A) dismissed the appeal ex-parte. Since, we have already set aside the assessment order and restored it to the file of the A.O for denovo assessment, the penalty levied on the foundation of assessment order has no leg to stand and therefore, does not survive. The A.O. shall, however, be at liberty to initiate and levy penalty while passing the fresh assessment order in accordance with law.

8.

In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 30th day of October, 2025 at Chennai.

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