SAI SRI ANUSHA VALLURU,VIJAYAWADA vs DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), VIJAYAWADA

Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM

Before: SHRI RAVISH SOOD, HONBLE & SHRI OMKARESHWAR CHIDARA, HONBLE

The present appeals filed by the abovementioned assessee’s are directed against the respective orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 30.04.2024 and 27.05.2025, which, in turn arises from the respective orders passed by the Assessing Officer (for short, “A.O”) under section 143(3) r.w.s. 147 of the Income-Tax Act, 1961 (for short, “the Act”), both dated 28.12.2016 for AY 2009-10.

As the issue involved in the captioned appeals are inextricably interlinked and interwoven, therefore, the same are taken up together and are disposed of vide a consolidated order. We shall first take up the appeal in wherein the impugned order has been assailed by the assessee on the following grounds of appeal before us:

“1. That, on the facts and in the circumstances of the case, and in law, the order dated 30.04.2024 passed by the Ld. CIT (Appeals), NFAC, confirming the assessment order passed U/S 143(3) r.w.s. 147 of the IT Act, by the Deputy Commissioner of Income Tax, Circle-2, Vijayawada, dt 28.12.2016, is erroneous, bad in law, and liable to be quashed.

2. That the Learned CIT(A) erred in passing an ex-parte order without granting sufficient and proper opportunity of being heard to the appellant, thereby violating the principles of natural justice.

3. That the impugned appellate order has been passed in violation of the mandatory provisions of Section 250(6) of the Income-tax Act, 1961, which require the Commissioner (Appeals) to state the points for determination, the decision thereon, and the reasons for the decision.

Page. No 2 I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru 4. That the Learned CIT(A) failed to appreciate that the Assessing Officer had already passed an order under Section 154 of the Act on Dt 04.08.2021 rectifying the impugned assessment order, pursuant to which the demand was reduced to Nil. The CIT (A) erred in law in ignoring the effect of the said rectification order and proceeded to uphold the original reassessment order which is non-existent.

5. For the foregoing reasons, as may be urged at the time of hearing, the appellant prays that the assessment order passed by the Learned Commissioner of Income Tax (Appeals) be quashed, and that the addition made therein be deleted, as being contrary to law, facts, and principles of natural justice.”

Succinctly stated, the AO observing that the assessee had not filed her return of income for the year under consideration, i.e, A.Y. 2009-10, initiated proceedings under section 147 of the Act. Thereafter, the AO issued a notice under section 148 of the Act, dated 29.02.2016. In response, the assessee e-filed her return of income for the A.Y. 2009-10 on 09.11.2016, declaring an income of Rs.1,84,550/-. Thereafter, the A.O vide his order under section 143(3) r.w.s 147 of the Act, dated 28.12.2016, after making an addition of Long-Term Capital Gains (for short, “LTCG”) of Rs.1,16,58,384/- (assessee’s share) framed the assessment.

Aggrieved, the assessee carried the matter in appeal before the CIT(A) who vide his order dated 30.04.2024 dismissed the same.

The assessee aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

We have heard the Learned Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record.

Page. No 3

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru 7. Shri C Subrahmanyam, CA, Learned Authorised Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the issue involved in the present appeal lies in a narrow compass. Elaborating on his contention, the Ld.AR submitted that the assessee had, along with 17 other co-owners, entered into a Joint Development Agreement (for short, “JDA”) on 30.07.2008. Thereafter, the AO had initiated re-assessment proceedings for the subject year, i.e., AY 2009-10 and issued notice under section 148 of the Act, dated 29.02.2016, wherein the assessee was called upon to file her return of income, in response thereto. In compliance, the assessee filed her return of income for the subject year i.e., A.Y. 2009-10 on 07.12.2016 declaring an income of Rs. NIL. However, the A.O vide his order passed under section 143(3) r.w.s 147of the Act, dated 28.12.2016 made an addition of LTCG of Rs.1,16,58,384/- pertaining to the transfer of land as per the aforementioned JDA dated 30.07.2008. The Ld. AR submitted that aggrieved with the order passed by the A.O under section 143(3) r.w.s. 147 of the Act, dated 28.12.2016, the assessee had filed an appeal before the CIT(A) on 27.01.2017.

Carrying his contention further, the Ld.AR submitted that the assessee had thereafter filed her return of income for the A.Y. 2011-12, declaring LTCG of Rs. 32,29,345/- pertaining to the land transferred as per the aforementioned JDA dated 30.07.2008. However, the AO treated the aforesaid return of income filed

Page. No 4

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru by the assessee as non-est/invalid. The Ld.AR submitted that the AO had thereafter issued to the assessee a notice under section 148 of the Act dated 28.03.2018 for the A.Y. 2011-12. In compliance, the assessee filed her return of income declaring LTCG of Rs. 32,29,345/-. Thereafter, the AO completed the re- assessment, vide his order passed under section 143(3) r.ws. 147 of the Act, dated 31.12.2018, wherein he determined LTCG at Rs.1,17,01,049/-.

Aggrieved, the assessee assailed the order passed by the A.O under section 143(3) r.w.s 147 of the Act, dated 31.12.2018 for AY 2011-12 before the CIT(A) on 19.01.2019. In the meantime, the assessee, during the pendency of her appeal before the CIT(A), had opted for “Vivad Se Vishwas Scheme” (DTVSV)for the A.Y. 2011-12 on 23.12.2020. Carrying his contention further, the Ld.AR submitted that the Pr. CIT, Vijayawada, dated 12.04.2021, had thereafter issued Form No. 5, dated 12.04.2021, based on the Direct Tax Vivad Se Vishwas Act, 2020 declaration filed by the assessee for the A.Y.2011-12.

10.

Shri C Subrahmanyam, Ld.AR submitted that, the A.O, i.e, ACIT-Circle- 2(1), Vijayawada, observing that the capital grains arising out of the JDA entered into by the assessee were assessed twice, i.e., in A.Y.2009-10 (the year in which agreement was entered) and A.Y. 2011-12 (the year of handing over of possession), thus, taking cognizance of the fact that the disputed tax arising from the said transactions for both the assessment years, which were one and same,

Page. No 5

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru had been settled and “Form No.5” and an order under the DTVSV, Act, was issued to the assessee by the Pr. CIT, Vijayawada dated 12.04.2021, vide his order passed under section 154 of the Act dated 09.08.2021, Page 22-23 of the “Assessee Paper book” (for short, “APB”), re-determined the income of the assessee as was originally assessed by him vide his order passed under section 143 r.w.s, 147 of the Act, dated 28.12.2016 for AY 2009-10 at Rs.1,84,550/- (as was returned by the assessee on 19.11.2016) and thus, as a consequence thereto reduced the balance outstanding tax liability in the hands of the assessee for the subject year, i.e., AY 2009-10 to Rs. NIL.

11.

The Ld. AR submitted that as the outstanding tax liability of the assessee for the subject year A.Y. 2009-10 was reduced by the A.O vide his order passed under section 154 of the Act, dated 09.08.2021 to Rs. NIL, therefore, she remained under a bonafide belief that her grievance, which had formed the basis of the appeal that was filed before CIT(A), had been redressed and thus, did no more survive.

12.

The Ld. AR submitted that it was only thereafter when Shri Jagan Mohan Rao, assessee’s uncle [one of the co-owners] who was also similarly assessed and had opted for DTVSV, had contacted the assessee and enquired as to whether she had filed an appeal against the CIT(A) order, that it was only then she had learnt

Page. No 6

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru about the dismissal of her appeal by the latter vide an exparte order dated 30.04.2024.

13.

The Ld. AR submitted that the assessee, on learning about the dismissal of her appeal, had immediately, without any further loss of time, filed the present appeal on 07.08.2025, which, by the time involved a delay of 403 days.

14.

Elaborating further on his contention, the Ld.AR submitted that as the assessee had throughout remained under a bonafide belief that pursuant to the order passed by the A.O under section 154 of the Act, dated 09.08.2021, wherein based on the “Form No. 5” issued in her case under DTVSV for the A.Y. 2011- 12, the impugned addition forming the genesis of the addition made in her case for the subject year, i.e., A.Y.2009-10 was vacated, therefore, had remained under a genuine belief that the appeal filed before the CIT(A) against the order passed by the A.O under section 143(3) r.w.s 147 of the Act, dated 28.12.2016 was rendered as infructuous and the matter had been finally put to rest. The Ld.AR submitted that as the delay in filing the appeal is not backed by any lackadaisical approach but is based on bonafide reasons, therefore, the same in all fairness and in the interest of justice be condoned.

15.

Per contra, Shri D. Hema Bhupal, Learned Senior Departmental Representative (for short, “Ld. DR”) objected to the application filed by the Page. No 7

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru assessee seeking condonation of the delay of 403 days. Elaborating on his contention, the Ld. DR submitted that as the delay of 403 days involved in filing the present appeal is inordinate, therefore, the same does not merit condonation. The Ld. DR submitted that as the assessee had failed to intimate to the CIT(A), the fact that the impugned addition made in her case by the A.O vide his order under section 143(3) r.w.s 147 of the Act, dated 28.12.2016, had been vacated by the by the A.O vide his order passed under section 154 of the Act dated 09.08.2021, therefore, no infirmity emerges from the order of the First Appellate Authority.

16.

We have given thoughtful consideration to the facts involved in the present case regarding the delay of 403 days involved in filing the present appeal before us. As the assessee based on the order passed by the AO under section 154 of the Act dated 09.08.2021, remained under a bonafide belief that as the impugned addition towards LTCG of Rs.1,16,58,384/- made in its case for the A.Y. 2009-10 had been vacated by the A.O, which in turn was based on the “Form No. 5” issued under the DTVSV Act, in her case for the A.Y.2011-12 thus, the impugned addition which had formed the very basis for filing of the appeal for AY 2009-10 before the CIT(A) did no more survive and was rendered as infructuous. We have given thoughtful consideration and are of the view that, as there are bonafide reasons leading to the delay of 403 days, therefore, the same merits condonation.

Page. No 8

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru 17. Coming to the controversy in hand, we find that the same lies in a narrow compass, i.e, the sustainability of addition of Rs.1,16,58,384/- made by the A.O vide his order under section 143(3) r.w.s, 147 of the Act, dated 28.12.2016, which thereafter had been upheld by the CIT(A) vide his order dated 30.04.2024. In our view, as the A.O vide his order under section 154 of the Act, dated 09.08.2021, had vacated the impugned addition of Rs. 1,16,58,384/- that was earlier made by him vide his order passed under section 143(3) r.w.s. 147 of the Act, dated 28.12.2016, therefore, the same could not have been upheld/sustained by the CIT(A). However, we are of the view that it was because of the failure of the assessee in not bringing to the notice of the CIT(A) the aforesaid order passed by the A.O under section 154 of the Act dated 09.08.2021, which had resulted in the infirmity in the impugned order before us. In case, the assessee would have brought to the notice of the CIT(A) the fact that the impugned addition of Rs.1,16,58,384/- had already been deleted by the A.O vide his order under section 154 of the Act, dated 09.08.2021 and is no more surviving, then there was no reason for the CIT(A) to have upheld the impugned addition despite the merger of the order passed by the A.O under section 143(3) r.w.s, 147 of the Act, dated 28.12.2016 with the aforementioned order passed under section 154 of the Act dated 09.08.2021.

Page. No 9

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru 18. Be that as it may, we are of the view that as the aforesaid claim of the assessee would require factual verification, therefore, in all fairness and in the interest of justice, the same requires to be set-aside to the file of the A.O, who is directed to re-visit the aforesaid issue in the backdrop of the above mentioned claim of the assessee, i.e., the impugned addition of Rs.1,16,58,384/- had been vacated pursuant to the order passed under section 154 of the Act dated 09.08.2021 and is no more surviving. In case the claim of the assessee is found to be in order, then the AO is directed to vacate the impugned addition.

19.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

20.

The Learned Authorised Representatives of both the parties fairly submitted that the facts and the issue involved in the present appeal remain the same, as was there before us in .

21.

The Ld. AR, at the threshold of hearing of the appeal, submitted that the same involves a delay of 7 days. Elaborating on the reasons leading to the delay, the Ld. AR submitted that the same had crept in for the reason that the assessee during the relevant period was suffering with viral fever. The Ld.AR to buttress his aforesaid claim had drawn our attention to medical certificates, application

Page. No 10

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru filed by the assessee seeking condonation of delay along with a supporting affidavit.

22.

Per contra, the Ld. DR objected to the seeking of the condonation of the delay involved in the present appeal.

23.

We have thoughtfully considered the reasons leading to the delay in filing the present appeal, and are of the view that as the same is not inordinate and is supported by justifiable reason, therefore, the same merits condonation.

24.

Coming to the merits of the case, we find that as stated by the Learned Authorised Representatives, the issue involved in the present appeal remains the same as was there before us in the appeal adjudicated by us hereinabove in .

25.

As brought to our notice by the Ld.AR the impugned addition of capital gains of Rs. 1,31,18,962/- made by the A.O vide his order under section 143(3) r.w.s, 147 of the Act, dated 28.12.2016, pursuant to the certificate issued by the Pr. CIT, Vijayawada in Form No. 5 on 12.04.2021 for the A.Y. 2011-12 had been vacated and thus, no more survives.

Page. No 11

I.T.A.No.468/VIZ/2025 Sai Sri Anusha Valluru I.T.A.No.469/VIZ/2025 Jagan Mohan Rao Valluru 26. The Ld.AR submitted that the assessee had inadvertently omitted to bring the aforesaid fact to the notice of the CIT(A), who had vide his exparte order dated 27.05.2025, upheld the addition made by the AO and dismissed the appeal.

27.

In our view, as the facts and the issue involved in the present appeal remain the same as were there before us in the appeal of the other co-owner in A.O who is directed to verify the veracity of the aforesaid claim of the assessee that the impugned addition of Rs.1,31,18,962/- made by the A.O in his case for the A.Y. 2009-10 had been vacated pursuant to the order passed under section 154 of the Act dated 04.08.2021, Page nos. 22 and 23 of the APB. In case the claim of the assessee is found to be in order, then the AO is directed to vacate the impugned addition.

28.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

SAI SRI ANUSHA VALLURU,VIJAYAWADA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), VIJAYAWADA