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Facts
The assessee filed stay applications seeking to postpone the recovery of disputed demands for AY 2013-14, 2014-15, and 2016-17. The appeals were filed with a delay of 104 days, which was condoned. The assessee claimed to be a rent collection agent and not the owner of the property, stating that the rental income was offered by the co-owners.
Held
The Tribunal set aside the orders of the lower authorities and remitted the matter back to the Assessing Officer for fresh examination and verification of details. The appeals were allowed for statistical purposes, subject to a payment of ₹.10,000/-. The stay applications were dismissed as infructuous.
Key Issues
Whether the CIT(A) was justified in dismissing the appeals exparte and whether the assessee's claim of being a rent collection agent and not the owner is valid.
Sections Cited
148, 142(1), 144, 147, 144B, 1941
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
These three stay applications are filed by the petitioner seeking grant of stay from recovery of outstanding disputed demand of ₹.1,07,85,566/- for AY 2013-14, ₹.2,61,518/- for AY 2014-15 and ₹.13,88,831/- for AY 2016-17 till the final disposal of the appeals filed by the petitioner.
When the stay applications were taken up for hearing today i.e., 20.06.2025, none appeared on behalf of the assessee, further, we find no & S.A. Nos. 52-54/Chny/25 appearance was made on 06.06.2025 and 13.06.2025. The assessee filed these stay petitions, wherein, the assessee sought to direct the Assessing Officer not to take any coercive measures till the disposal of main appeals and stay of demand of outstanding tax liability. Therefore, we proceed to hear the ld. DR on the stay on demand as well as main appeals.
The ld. DR Ms. Gouthami Manivasagam, JCIT submits that the main appeals of the assessee in 763 & 764/Chny/2025 were came up for hearing before ‘B’ Bench on 03.06.2025 and since none appeared on behalf of the assessee, the appeals were adjourned to 02.07.2025. Thus, the ld. DR prayed that the main appeals may be called on board and heard along with the stay applications of the assessee on merits. Considering the submissions of the ld. DR, the main appeals were called on and taken up for hearing.
The assessee filed the appeals against the separate orders all dated 26.09.2024 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the assessment years 2013-14, 2014-15 and 2016-17. The only effective common ground raised by the assessee is whether the ld. CIT(A) is justified in dismissing the appeals of the assessee by passing exparte order.
& S.A. Nos. 52-54/Chny/25 5. We find that these three appeals are filed with a delay of 104 days. The assessee filed separate affidavits for condonation of delay stating the reasons. On examination of the said affidavit as well as hearing the ld. DR, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeals in time. Thus, the delay is condoned and admitted the appeals for adjudication.
We note that according to the Assessing Officer, the assessee received rent under section 194I of the Income Tax Act, 1961 [“Act” in short] of ₹.1,61,77,496/- and contract receipts of ₹.2,60,000/-, but, however, the assessee failed to offer said income for taxation. Though the assessee uploaded return of income against the notice under section 148 of the Act, pending E-verification, the Assessing Officer treated the same as invalid. Against the notices issued under section 142(1) of the Act as well as show cause notice under section 144 of the Act, there was no response from the assessee. According to the Assessing Officer, various deductors paid rent as per 26AS to an extent of ₹.1,59,17,496/-, details tabulated at page 3 & 4 of the assessment order, the assessee failed to offer the above rental income for taxation. Accordingly, by & S.A. Nos. 52-54/Chny/25 allowing standard deduction, the Assessing Officer added the undisclosed rental income of ₹.1,11,42,248/- to the total income of the assessee. Further, since the assessee has not offered the contract receipt of ₹.2,60,000/- for taxation, 10% of the same to an extent of ₹.26,000/- is added to the total income of the assessee and completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 17.03.2022, inter alia, assessing total income of the assessee at ₹.1,12,23,578/-. On appeal, the ld. CIT(A) dismissed the appeal of the assessee since the assessee did not comply with the hearing notices or filed any documentary evidences in support of grounds of appeal.
Having heard the ld. DR, we note that the Assessing Officer completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 17.03.2022. The assessee has filed detailed written submissions dated 13.06.2025 and it is stated that the assessee is not the owner of the property but acts purely as a rent collection agent for 32 individual co-owners of the property known as “Wavoo Mansion”, 191, Rajaji Salai, Chennai. The rent received belongs to the individual co- owners and has been dully offered for tax by them in their personal returns. The assessee is operating with six percentage commission on collected rent which is the primary source of income for the assessee. In & S.A. Nos. 52-54/Chny/25 proof thereof, copy of computation sheet along with audited profit and loss account of the assessee firm along with sample copy of ITR acknowledgement of individual co-owners disclosing the rental income received from the property. Moreover, the assessee also brought on record copy of the notarized affidavit filed by the co-owners owning their share of property in the “Wavoo Mansion”.
We note that as per para 5 of the impugned order, the main contention of the assessee for the delay in filing the appeal before the ld. CIT(A) that no notice under section 142(1) of the Act or show-cause notice received by the assessee and without any intimation, the ITO (NFAC) Delhi completed the assessment under section 144 r.w.s. 147 of the Act is not correct and invalid. By accepting the above contentions of the assessee, at para 5.1, of the impugned order, the ld. CIT(A) has observed that the assessee has good and sufficient reason for filing the appeal belatedly and condoned the delay.
On perusal of the assessment order as well as impugned order, we note that there was no assistance from the assessee and the Assessing Officer is required to verify various details as has been brought on record before the Tribunal before concluding the assessment order. Accordingly, we set aside the orders of authorities below and remit the matter back to & S.A. Nos. 52-54/Chny/25 the file of the Assessing Officer to examine and verify the details as may be filed by the assessee and decide the issues in accordance with law, subject to the condition of payment of ₹.10,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the assessee shall produce the receipt before the Assessing Officer. The Assessing Officer shall allow reasonable opportunity of being heard to the assessee. Thus, the grounds raised
by the assessee are allowed for statistical purposes. & 764/Chny/2025 for AY 2014-15 & 2016-17
11. We find the issues in assessment year 2014-15 and 2016-17 are similar to the facts and circumstances relevant to AY 2013-14 in Assessing Officer for fresh consideration, subject to the condition of payment of ₹.10,000/- for each assessment years 2014-15 & 2016-17 in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the assessee shall produce receipt before the Assessing Officer and therefore, we hold our findings would be equally applicable to the assessment years under consideration. Thus, the grounds raised by the assessee for AY 2014-15 and 2016-17 are allowed for statistical purposes.
& S.A. Nos. 52-54/Chny/25 S.A. Nos. 52, 53 & 54/Chny/2025 12. Since we have adjudicated the main appeals by setting aside the CIT(A)’s order and remanded the matter to the file of the Assessing Officer for de novo consideration on costs for all the assessment years under consideration, the stay applications filed by the assessee become infructuous and dismissed accordingly.
In the result, all the appeals filed by the assessee are allowed for statistical purposes and the Stay Applications are dismissed. Order pronounced on 25th June, 2025 at Chennai.