WAVOO REAL ESTATE CORPORATION,CHENNAI vs. COMMISSIONER OF INCOME TAX (APPEALS), CHENNAI

With the consent of the ld. DR, the appeal in for AY 2013-14 is taken as lead case 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

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.