Tribunal finds Section 50C addition and Rs. 12 crore surrender unsustainable without seized material; directs CIT(A) to re-examine entire matter afresh
Meetu Kumari | Dec 7, 2025 |
ITAT Hyderabad Condones 868-Day Delay, Sends Back Section 153A Additions for Fresh Review
The assessee, Shri Pusa Nanda Kumar, appealed against the order of the CIT(A) for A.Y. 2007-08, challenging additions made in the assessment under Section 153A.
The appeal reached the Tribunal with a substantial delay of 868 days, for which the assessee filed an affidavit explaining that his earlier Chartered Accountant had advised him not to file further appeal, he later after changing counsel, realized that strong legal grounds existed, particularly on the lack of incriminating material, and part of the delay overlapped with the period excluded by the Supreme Court’s COVID-19 limitation extension orders.
Issue Before Tribunal: Whether additions made under Section 153A, particularly the Section 50C enhancement and the Rs. 12 crore income, could survive when no incriminating material relating to these issues was found during the search, and whether the CIT(A) failed to properly evaluate these legal and factual contentions.
ITAT’s Decision: The Tribunal first condoned the 868-day delay, holding that the explanation, wrong professional advice, followed by the COVID-19 limitation relaxation, constituted a bona fide and reasonable cause. The ITAT also noted that the assessee had made genuine efforts to settle the dispute through Vivad se Vishwas, reinforcing that the delay was neither deliberate nor to gain any undue benefit. However, condonation was made subject to payment of Rs. 10,000 to the PM-NRF.
The Tribunal found prima facie merit in the assessee’s contention that the Section 153A additions lacked incriminating material, which is impermissible. It noted that the sale deed clearly showed the assessee had not sold the land in his individual capacity, and the AO had made the Section 50C addition without any supporting seized material. Therefore, the Tribunal set aside the CIT(A)’s order and remanded the matter for re-examination after giving the assessee a proper opportunity of hearing.
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