NAFEES SULTANA,HYEDERABAD. vs. INCOME TAX OFFICER, WARD-14(1), HYDERABAD.

Facts

The Assessing Officer reopened the assessment for A.Y. 2014-15 for the assessee, Nafees Sultana, under Section 147 based on Form 26Q, which indicated rent receipts of Rs. 1.10 crore and interest income, despite no Income Tax Return being filed. The A.O. made an addition of Rs. 1,10,56,128/-. The assessee's appeal to the CIT(A) involved a 7-month delay, which the CIT(A) initially refused to condone but then proceeded to decide the appeal on merits, upholding the A.O.'s additions and dismissing the appeal.

Held

The Tribunal held that since the CIT(A) adjudicated the appeal on merits, it implicitly condoned the delay in filing the appeal. Regarding the merits, the Tribunal found that the A.O. was statutorily obligated to allow the notional deduction under Section 24(a) for 'Income from House Property'. Therefore, the matter was restored to the A.O. for re-adjudication, allowing the assessee an opportunity to substantiate her claim.

Key Issues

1. Whether the CIT(A) implicitly condoned the delay in filing the appeal by adjudicating the case on its merits. 2. Whether the Assessing Officer correctly computed 'Income from House Property' without allowing the notional deduction under Section 24(a) of the Income Tax Act, 1961.