AI Insights
The case involves Venugopal Reddy Gelivi, an NRI, who appealed against the order of the Commissioner of Income-Tax (Appeals) - 10, Hyderabad, which arose from the order passed by the Assessing Officer under Section 147 r.w.s. 144 of the Income Tax Act, 1961. The A.O. had initiated proceedings claiming that the assessee's income from capital gains on the sale of a property had escaped assessment. However, the Tribunal found that the A.O. had erred in not considering the return of income filed by the assessee, which already disclosed the capital gains. The Tribunal's decision was influenced by a recent Supreme Court judgment advocating a liberal approach in condoning delays in filing appeals, which was applicable in this case due to the assessee's non-resident status and lack of awareness of the procedural timelines.
Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 706037 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-07-2025
Appeal Filed By
Assessee
Order Result
Allowed
Assessment Year
2015-2016
Judgement Text
"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.393/Hyd/2025 (निर्धारण वर्ा/ Assessment Year:2015-16) Venugopal Reddy Gelivi, R/o.Hyderabad. PAN : AFPPG4404G. Vs. The Income Tax Officer, International Taxation - 1, Hyderabad. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri Vinod Kumar Suthar, C.A. राजस्व का प्रतततितित्व/ Department Represented by : Shri Gurpreet Singh, Sr.AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 24.06.2025 घोर्णध की तधरीख/ Date of Pronouncement : 03.07.2025 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 29.10.2024, which in turn arises from the 2 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi order passed by the Assessing Officer (for short “A.O.”) under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (for short “the Act”) dated 27.04.2023 for A.Y. 2015-16. 2. Succinctly stated, the A.O. observed that the assessee along with three other co-owners, had during the subject year sold an immovable property viz. House No.SRT-267, bearing Municipal No.7-2-488, admeasuring 150 Sq.yards (equivalent to 125.42 Sq.mtrs), situated at Industrial Housing Colony, Sanatnagar, Hyderabad, vide a Sale Deed Document No. 2340 of 2014, dated 10.12.2014, which was registered with the office of the Joint Sub- Registrar–7, S.R. Nagar, Hyderabad, for a total sale consideration of Rs.60,00,000/- as against the SRO value of Rs.66,36,000/-, wherein his share in the sale consideration was one-fourth. The A.O. observed that, as per the information available on record, the income of the assessee on account of “capital gains” arising from the aforesaid transfer of his share in the property had escaped assessment, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act, dated 26.03.2021 was issued to the assessee. 3. However, the assessee did not file his return of income in compliance to the notice u/s 148 of the Act, dated 26.03.2021. 3 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi Also, the notice issued by the A.O. u/s 142(1) of the Act, dated 20.01.2023 was nor complied with by the assessee. Considering the aforesaid facts, the A.O. was constrained to proceed with and frame the assessment to the best of his judgment u/s 144 of the Act. 4. During the course of assessment proceedings, the A.O. observed that the assessee, who is an NRI, had, along with his wife, had sold the subject immovable property vide a sale deed, dated 10.12.2014 that was registered with the Joint Sub-Registrar–7, S.R. Nagar, Hyderabad, for a total sale consideration of Rs. 60,00,000/- as against the SRO value of Rs. 66,36,000/-. Accordingly, the A.O. triggered the provisions of Section 50C of the Act, and by treating the market value (S.R.O. Value of Rs.66,36,000/-) as the deemed sale consideration received on the sale of the subject property, determined the “Long-Term Capital Gains” (“LTCG\") on the transfer of the subject property. As the assessee had one-fourth share in the aforesaid property, therefore, the A.O. determined his income under the head \"Long-Term Capital Gains\" (“LTCG\") at Rs. 16,59,000/-. 4 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A), considering the fact that the A.O. had framed the assessment vide an ex parte order passed u/s 147 r.w.s. 144 of the Act, dated 27.04.2023, therein exercised the powers vested with him vide the amendment made available to Section 251 of the Act vide Finance Act (No.2) Act, 2024, w.e.f. 01.10.2024, and set aside the assessment to the file of the A.O. with a direction to frame a fresh assessment. Accordingly, the CIT(A), based on his aforesaid observations allowed the appeal filed by the assessee for statistical purposes. 6. The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us. 7. We have heard the learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record. 8. Shri Vinod Kumar Suthar, C.A. the Learned Authorized Representative (in short “Ld.AR”) for the assessee, at the threshold of the hearing of the appeal, submitted that the present appeal involves a delay of 68 days (pointed by the Registry as 65 days). 5 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi Elaborating on the reasons leading to the delay, the Ld. AR fairly submitted that the same had crept in because the assessee, who is a non-resident, was not aware of the time limit for filing the appeal and had also taken some time to engage a tax consultant for filing the appeal before the Tribunal. The Ld. AR submitted that as the delay in filing of the appeal had occasioned for bona fide reasons and not due to any lackadaisical approach of the assessee, therefore, the same, in all fairness, be condoned. 9. Per contra, Shri Gurpreet Singh, the learned Senior Departmental Representative (for short “Ld. DR”) objected to the seeking of condonation of the delay involved in filing of the appeal by the assessee. We have heard the learned authorized representatives of both parties qua the delay involved in filing of the appeal in the backdrop of the material available on record. We find that the assessee in the present case before us has fairly stated that the delay of 68 days in filing of the present appeal had crept in because he had remained oblivion of the income tax proceedings and had also taken some time to engage the services of a consultant for filing the present appeal. We are of the firm conviction that as the assessee in the present case has come up with clean hands and 6 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi fairly admitted the reasons leading to the delay in filing of the appeal, therefore, the same merits to be condoned. Our aforesaid view that a liberal approach should be adopted while considering an application filed by an appellant seeking condonation of the delay involved in filing the appeal is supported by the recent judgment of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025, wherein the Hon'ble Apex Court while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income Tax Appellate Tribunal, Raipur Bench, had observed that a justice oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay in filing the appeal. We thus, in terms of our aforesaid observations, condone the delay involved in filing of the present appeal. 10. On merits, it transpires that the A.O. had initiated proceedings u/s 147 of the Act for the reason that as the assessee had failed to file his return of income and disclose the “Capital Gain” on the sale 7 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi of the subject property, therefore, his income chargeable to tax had escaped the assessment. As observed by us hereinabove, the A.O. had issued notice u/s 148 of the Act, dated 26-03-2021, calling upon the assessee to file his return of income for the year under consideration. 11. We find on a perusal of the record, to which our attention was drawn by the Ld. AR, that the A.O. had initiated the proceedings u/s 147 of the Act based on misconceived and wrong observations. We say so, for the reason that the assessee had filed his original return of income for the subject year i.e., A.Y. 2015-16, on 29-12-2015, declaring an income of Rs. 7,70,996/- [Page 10 to 23 of APB]. On a perusal of the return of income, we find that the assessee based on the actual sale consideration of Rs. 60 lacs, (his one-fourth share i.e., Rs. 15 lacs) had duly disclosed the the consequential amount of \"Long-Term Capital Gains\" (“LTCG\") in his return of income for the subject year. 12. We thus, are of the firm conviction that as the assessee had filed his return of income for the year under consideration i.e. A.Y. 2015-16 on 29-12-2015, wherein he had already disclosed the 8 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi \"Long-Term Capital Gains\" (“LTCG\") on the sale transaction of the subject property, therefore, the very basis for initiation of the assessment proceedings by the A.O. u/s 147 of the Act, wherein he had failed to take cognizance of the said return of income filed by the assessee is found to be based on misconceived facts. We are of the firm conviction that as the initiation of the proceedings u/s 147 of the Act does not have nexus with the material available on record; but, in fact militates against the facts discernible from the record, therefore, the A.O. had grossly erred in law and on facts of the case in assuming jurisdiction for initiating the impugned proceedings, based on which the assessment had thereafter been framed by him u/s 147 r.w.s. 144 of the Act, dated 27-04-2023. 13. We thus, in terms of our aforesaid deliberations, quash the assessment framed by the A.O. u/s 147 r.w.s. 144 of the Act, dated 27-04-2023 for want of valid assumption of jurisdiction on his part for initiating the assessment proceedings. As we have quashed the assessment for want of valid assumption of jurisdiction on the part of the A.O., therefore, we refrain from adverting to and adjudicating the other issues, based on which the impugned addition and also 9 ITA No.393/Hyd/2025 Venugopal Reddy Gelivi the assumption of jurisdiction by the A.O. has been assailed before us, which, thus, are left open. 14. Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations. Order pronounced in the Open Court on 3rd July, 2025. Sd/- Sd/- (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 03.07.2025. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Venugopal Reddy Gelivi, Plot No.426, Mayuri Colony, HUDA Colony, Miyapur, Hyderabad – 5000049. 2. रधजस्व/ The Revenue : The Income Tax Officer, (International Taxation) – 1, Hyderabad. 3. The Commissioner of Income Tax (IT & TP), Hyderabad. 4. The Chief Commissioner of Income Tax (IT) (SZ), Bengaluru. 5. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 6. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad "
