XL COLOUR COATING ,CHENNAI V. ITO, NCW-15(1), CHENNAI

ITA 3505/CHNY/2025

AI Insights

The case involves XL Colour Coating, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2016-17. The primary contention arose from the assessee's failure to comply with notices during the assessment proceedings, leading to an ex parte dismissal of their appeal. The Assessing Officer had applied section 50C of the Income Tax Act, 1961, due to the sale of a property below its market value, resulting in a capital gains tax assessment. The Tribunal, acknowledging the assessee's lack of compliance, decided to remand the case for a fresh assessment, providing an opportunity for the assessee to present necessary documentation and arguments.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833495 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 27-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SBR KUMAR LAGHIMSETTI
• Assessee Lawyers: Y. SRIDHAR
• Keywords: Condonation of delay; Sale consideration of property below Jantri Value; Cost of acquisition; Capital Gains
• Section: 147; 148; 142(1); 50C

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी इंट ूरी रामाराव, लेखा सद˟ एवं ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ क े समƗ । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.3505/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2016-17 XL Colour Coating, Plot No. 76, Industrial Developed Plots, Perungudi, Chennai 600 096. [PAN:AAAFX0897J] Vs. The Income Tax Officer , Non Corporate Ward 15(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri Y. Sridhar, FCA ŮȑथŎ की ओर से/Respondent by : Shri SBR Kumar Laghimsetti, Addl. CIT सुनवाई की तारीख/ Date of hearing : 21.01.2026 घोषणा की तारीख /Date of Pronouncement : 02.02.2026 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 28.02.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2016-17. 2. We find that this appeal is filed with a delay of 211 days. The assessee filed an affidavit for condonation of delay stating the reasons. Printed from counselvise.com I.T.A. No.3505/Chny/25 2 Upon hearing both the parties and on examination of the said affidavit, in the interest of justice, we condone the delay and admit the appeal for adjudication. 3. At the outset, the ld. AR Shri Y. Sridhar, CA submits that there was no compliance by the assessee before the Assessing Officer and the ld. CIT(A) and the appeal of the assessee was dismissed exparte. The ld. AR prayed that the matter may be remanded to the file of the Assessing Officer to afford one more opportunity to the assessee to substantiate its case before the Assessing Officer. 4. The ld. DR Shri SBR Kumar Laghimsetti, Addl. CIT fairly conceded that the matter may be remanded to the file of the ld. CIT(A). 5. Having heard both the parties and perused the material on record. In the assessment order, the Assessing Officer noted that the assessee sold a property for ₹.5,72,00,000/- below the market value of ₹.7,89,36,000/-, thereby the provisions of section 50C of the Income Tax Act, 1961 [“Act” in short] is applicable to the assessee. The Assessing Officer calculated income from capital gain at ₹.3,56,04,777/- after deducting the indexed cost of acquisition amounting to ₹.4,33,31,223/- from the market value of ₹.7,89,36,000/-. Printed from counselvise.com I.T.A. No.3505/Chny/25 3 The Assessing Officer also noted that the assessee has also received contract receipt of ₹.58,54,325/-. Accordingly, the Assessing Officer issued notice under section 148 of the Act. Notice under section 142(1) of the Act was also issued, but, however, there was no response from the assessee to any of the notices issued by the Assessing Officer. Accordingly, the Assessing Officer made addition of ₹.3,56,04,776/- under long term capital gains and ₹.4,68,346/- being 8% of contract receipt of ₹.58,54,325/- and completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 19.03.2022. Since the assessee could not file any reply to the hearing notices issued by the ld. CIT(A), the ld. CIT(A) partly allowed the appeal of the assessee on merits. On perusal of the assessment order as well as impugned order, we note that no compliance was made by the assessee during assessment proceedings and appellate proceedings. Therefore, we deem it proper to remand the matter to the file of the Assessing Officer to consider the submissions/documentary evidence as may be filed by the assessee and decide the issue afresh in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes. Printed from counselvise.com I.T.A. No.3505/Chny/25 4 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 02nd February, 2026 at Chennai. Sd/- Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 02.02.2026 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "