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Facts
The assessee, a Non-Resident Indian, sold an immovable property in 2017 and claimed exemption under Section 54F for investment in a new residential property, which was registered in 2019. The Assessing Officer denied the Section 54F claim and also disallowed indexed cost of improvement, assessing long-term capital gains, and this was upheld by the Dispute Resolution Panel. The assessee subsequently filed an appeal before the Commissioner of Income Tax (Appeals).
Held
The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal in limine, ruling that an appeal against an assessment order passed in pursuance of the Dispute Resolution Panel's directions is maintainable only before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision, confirming that the appeal against such an order correctly lies with the Tribunal under Section 253(1)(d) of the Income Tax Act.
Key Issues
Whether an appeal against an assessment order passed by the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel is maintainable before the Commissioner of Income Tax (Appeals) or exclusively before the Income Tax Appellate Tribunal.
Sections Cited
147, 144C(13), 144C(1), 144C(5), 148, 148A, 148A(d), 143(2), 143(3), 54F, 48, 142(1), 253, 253(1)(d), 153A, 153C, 154, 250
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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
करदाता का प्रतततितित्व/ : Shri K. Ramanuja Sriharsha, Assessee C.A. Represented by राजस्व का प्रतततितित्व/ : Shri Gurpreet Singh, Sr.DR Department Represented by सुिवाई समाप्त होिे की ततति/ : 09.07.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 26.08.2025 Date of Pronouncement O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals) – 10, Hyderabad, dated 25.02.2025, which in turn arises 2 Panda Srinivas from the order passed by the A.O. under Section 147 r.w.s. 144C(13) of the Income Tax Act, 1961 (for short “the Act”) dated 21.12.2024 for A.Y. 2018-19. The assessee has assailed the impugned order on the following grounds of appeal before us:
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Succinctly stated, the A.O. based on information that the assessee who is a Non-Resident Indian (NRI) had though carried out transactions of purchase/sale of properties during the subject year, but had not filed his return of income, initiated proceedings u/s 148A of the Act and passed an order u/s 148A(d) of the Act with the approval of competent authority. Thereafter, the A.O. issued notice u/s 148 of the Act, dated 26.04.2022. In compliance, the assessee filed his return of income for the A.Y 2018-19 on 10.07.2023, disclosing an income of Rs.49,81,690/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act.
During the course of assessment proceedings, the A.O. observed that the assessee had during the subject year sold an immovable property (open plot admeasuring 590 sq. yards) situated at Village: Miyapur, Mandal: Serilingampaly, District: Rangareddy for a consideration of Rs.2,73,17,000/-, vide a registered sale deed dated 09.11.2017. On a perusal of the return of income, it was observed by him that the assessee had raised a claim for deduction of Rs. 1,98,05,341/- u/s 54F of the Act. The A.O. observed that a perusal of the record revealed that the 7 Panda Srinivas assessee had purchased a new residential property i.e. Flat No.1201 (admeasuring 2680 sq. ft) on the 12th Floor of “My Home Bhuja” vide a registered sale deed dated 12.12.2019 for a consideration of Rs.1,86,21,000/-. Also, the assessee had paid stamp duty and registration charges on the aforesaid purchase transaction of Rs.11,17,360/-. However, the A.O. observed that as the assessee had purchased the aforesaid new residential property beyond the prescribed time period of two years, therefore, he was disentitled from raising the claim for exemption u/s 54F of the Act. Accordingly, the A.O. vide his draft assessment order passed u/s 144C(1) of the Act, dated 26.03.2024 re-determined the “Long Term Capital Gains” (“LTCG") on the sale of the subject property at Rs.2,66,74,645/-.
Apart from that, the A.O. made an addition of Rs.1,75,947/- based on the information gathered by him from Insight Portal as the income of the assessee from “Other Sources”. Accordingly, the A.O. vide his draft assessment order u/s 144C(1) of the Act, dated 26.03.2024 proposed to assess the income of the assessee at Rs.2,68,50,592/-.
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Thereafter, the assessee aggrieved by the draft assessment order u/s 144C(1) of the Act, dated 26.03.2024 filed objections vide petition in “Form No.35A” before the Dispute Resolution Panel–1, Bengaluru (DRP). However, the DRP rejected the objections filed by the assessee vide its directions u/s 144C(5) of the Act, dated 26.11.2024.
Thereafter, the A.O. after receiving the order passed by the DRP-1, Bengaluru, dated 26.11.2024 passed the final assessment order u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 wherein the income of the assessee was assessed at Rs.2,68,50,592/-.
7. The assessee assailed the order passed by the A.O. u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 before the CIT(A)-10, Hyderabad.
On a perusal of the CIT(A)’s order dated 25.02.2025, we find that he had after referring to the facts of the case and the submissions of the assessee, observed that as the order passed by the A.O. u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 was in pursuance to the directions of the DRP–1, Bengaluru, therefore, 9 Panda Srinivas an appeal against the said order was maintainable before the Income Tax Appellate Tribunal and not before him. Accordingly, the CIT(A) based on his observation that the appeal filed by the assessee before him was not maintainable dismissed the same in limine, observing as under:
“6.2 The Assessing Officer on receipt of the directions from the Ld. DRP completed the assessment u/s. 147 r.w.s. 144C(13), on 21.12.2024, incorporating the directions of the Ld. DRP. 6.3. It is pertinent to mention here that appeal against any order passed after incorporation of the directions of Ld. Dispute Resolution Panel lies with the Honourbale Appellate Tribunal. The relevant provisions of sub section 253(1)(d) is reproduced as under: "Section 253(1)(d) in The Income Tax Act, 1961 (d) an order passed by the Assessing Officer under sub section (3) of Section 143 or section 147 (or section 153A or section 153C) in pursuance of the directions of the Dispute Resolution Panel or an order passed under Section 154 in respect of such order." 6.4 Therefore, the appeal against the order passed by the Assessing Officer in pursuance to the directions of the Ld. Dispute Resolution Panel lies before the jurisdictional Income Tax Appellate Tribunal and not an appealable order before the undersigned. Hence, this Appeal Commissionerate lacks jurisdiction and accordingly, the present appeal filed is dismissed in limine. The appellant is at liberty to file appeal before the Hon'ble ITAT.
In the result, the appeal is dismissed.
The assessee being aggrieved with the order of CIT(A), dated 25.02.2025, wherein he had after treating the appeal filed by the assessee before him as not maintainable dismissed the same in limine, assailed the same before us.
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Shri K. Ramanuja Sriharsha, the learned Authorized Representative (for short “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted at length his contentions regarding the merits of the case. The Ld. A.R based on his multi-facet contentions submitted that the declining of the assessee’s claim for exemption u/s 54F of the Act by the authorities below was not as per the mandate of law. However, no contention was advanced regarding the observation of the CIT(A) that the appeal against the final assessment order passed u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 based on the directions of the DRP-1, Bengaluru was not maintainable before him.
Per contra, Shri Gurupreet Singh the learned Senior Departmental Representative (for short, “Ld. DR”) rebutted the submissions advanced by the assessee’s counsel regarding the merits of the case. However, we find that the ld. DR had also at no stage of hearing of the appeal supported the observation of the CIT(A) wherein he had dismissed the appeal against the final assessment order passed by the A.O. u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 as not maintainable before him.
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We have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both parties in the backdrop of the orders of the lower authorities.
Admittedly, it is a matter of fact discernible from the record that the A.O. had passed a draft assessment order u/s 144C(1) of the Act, dated 26.03.2024.
Ostensibly, as can be gathered from the perusal of the order of CIT(A), the assessee had thereafter preferred to file objections before the DRP–1, Bengaluru. The DRP–1, Bengaluru vide directions in F.No.97/DRP-1/BNG/2024-25, dated 26.11.2024, had issued the following directions :
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Thereafter, the A.O. on receipt of the directions of the DRP-1, Bengaluru, had passed the final assessment order u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 wherein the income of the assessee was determined at Rs.2,68,50,592/-.
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We have given thoughtful consideration and concur with the CIT(A) that, now when the order u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 was passed by the A.O. after incorporating the directions of the DRP, therefore, an appeal against the said order was maintainable before the Tribunal and not before him. For the sake of clarity, Section 253(1)(d) of the Act, which contemplates that the appeal against the order passed by the A.O. under sub-section (3) of Section 143 or Section 147 in pursuance to the directions of the DRP lies with the Tribunal is culled out as under:
Section 253 – Appeals to the Appellate Tribunal (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order— (d) an order passed by an Assessing Officer under sub-section (3) of section 143 or section 147 in pursuance of the directions of the Dispute Resolution Panel or an order passed under section 154 in respect of such order;
We, thus, based on the aforesaid settled position of law find no infirmity in the view taken by the CIT(A), who had rightly observed that the appeal against the order passed by the A.O. u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 was maintainable only before the Income Tax Appellate Tribunal and not before him and had dismissed the appeal in limine.
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We find that though the CIT(A) vide his order dated 25.02.2025 had observed that the assessee was at liberty to file an appeal before the Tribunal, but the assessee instead of assailing the order passed by the A.O. u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 before the Tribunal, has erred in challenging the order passed by the CIT(A) dated 25.02.2025 before the Tribunal. At this stage, we may herein observe that the “memorandum of appeal” filed by the assessee appellant in “Form No.36” reveals that it is the order of the CIT(A)-10, Hyderabad, dated 21.02.2025 that has been assailed before us. For the sake of clarity, the relevant extract of Form No. 36 is culled out as under:
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We are of the considered view that as no infirmity emanates from the order of the CIT(A) who had rightly dismissed the appeal filed by the assessee as not maintainable for the reason that an appeal against the impugned final assessment order u/s 147 r.w.s. 144C(13) of the Act, dated 21.12.2024 was maintainable before the Tribunal and not before him, therefore, uphold the same.
Resultantly, the appeal filed by the assessee is dismissed.
Order pronounced in the Open Court on 26th August, 2025. (श्री मिुसूदन सावडिया) (श्री रवीश सूद) (MADHUSUDAN SAWDIA) (RAVISH SOOD) लेखा सदस्य/ACCOUNTANT MEMBER न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 26.08.2025. *TYNM/sps