ITAT Condones Over Two-Year Delay, Gives Taxpayer Fresh Opportunity to Contest Rs 1.30 Crore Property Sale Addition:

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has given a taxpayer another opportunity to contest a Rs 1.30 crore tax addition relating to the sale of an immovable property for the assessment year 2013-14.

The case concerns Gungun Chanda, who had not filed an income-tax return for the relevant year. Based on information available with the Income Tax Department that she had sold an immovable property for Rs 1.30 crore, the assessment was reopened under Section 147 of the Income Tax Act.

The Assessing Officer issued notices under Sections 148 and 142(1), but there was no response from the taxpayer. As a result, the assessment was completed ex parte and Rs 1.30 crore was treated as short-term capital gain and added to her income.

Chanda later approached the Commissioner of Income Tax (Appeals) but her appeal was filed more than two years late. The CIT(A) refused to condone the delay and did not admit the appeal. The taxpayer then approached the ITAT.

Before the Tribunal, her counsel argued that she had not received the physical copies of the notices or orders. It was also submitted that an incorrect email address had been recorded on the ITBA portal, because of which she did not receive the notices issued by the CIT(A). According to the taxpayer, she became aware of the proceedings only after receiving a recovery intimation on her registered mobile number.

The taxpayer also told the Tribunal that there was an important dispute regarding the value of the property transaction. She claimed that the property was actually sold for Rs 65 lakh and not Rs 1.30 crore, as considered by the Assessing Officer. Her counsel submitted that she had the necessary documents to establish the actual transaction and requested another opportunity to present her case before the CIT(A).

The Department opposed the request and supported the order of the CIT(A). After considering the submissions, the ITAT held that the delay in filing the appeal was due to a reasonable cause and was neither deliberate nor intentional. Relying on judgments of the Supreme Court, including Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. and Inder Singh v. State of Madhya Pradesh, the Tribunal condoned the delay and admitted the taxpayer’s appeal.

The Tribunal, however, did not decide whether the Rs 1.30 crore addition was correct. The ITAT set aside the order dated January 16, 2026 and remanded the matter back to the CIT(A) for fresh consideration as the CIT(A) had not concluded the case on merits.

The Tribunal directed the taxpayer to update her correct e-mail and postal/communication addresses on the ITBA portal as well as before the CIT(A). She was also required to monitor the proceedings on a regular basis and submit all relevant documents and explanation whenever a notice of hearing is received.

The ITAT also directed the CIT(A) to re-decide the appeal in accordance with law after giving reasonable opportunity of being heard to the taxpayer. Appeal allowed for statistical purposes.