ITAT Sets Aside Rs 59.84 Lakh LTCG Addition, Orders De Novo Assessment:

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, has set aside an income tax assessment involving Long-Term Capital Gains (LTCG) of Rs 59.84 lakh and remanded the matter to the Assessing Officer (AO) for a fresh assessment. The Tribunal also restored the related penalty proceedings under Section 271(1)(c) of the Income Tax Act.

The case concerned Salesh Tyagi, through his legal heir Smt. Shalini Tyagi, for Assessment Year (AY) 2012-13. The AO had completed the assessment on a best-judgement basis under Section 144 read with Section 147 of the Income Tax Act on November 30, 2019, after the assessee failed to make representations during the proceedings. The AO assessed LTCG of Rs 59.84 lakh and subsequently imposed a penalty under Section 271(1)(c).

The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (CIT(A), NFAC), upheld the AO’s additions and penalty-related action through an order dated December 5, 2025. The assessee then approached the ITAT, challenging the findings.

Before the Tribunal, the assessee’s representatives submitted that Salesh Tyagi was a co-owner of the property along with Sachin Tyagi, who had faced a similar assessment. In Sachin Tyagi’s case, the ITAT had already remitted the matter to the AO for fresh consideration through its order dated April 21, 2025.

Considering the similarity between the cases, the ITAT Chandigarh set aside the impugned order and restored the matter to the AO for de novo assessment. The Tribunal directed the assessee to present and substantiate the case before the AO. It also restored the penalty proceedings for fresh adjudication based on the outcome of the quantum assessment.

The tribunal held that "we set aside the impugned order and restore the matter back to Ld. AO for de novo assessment with a direction to the assessee to plead and prove its case forthwith. The penalty is consequential in nature and therefore, the same is also restored back to Ld. AO for re-adjudication in the light of outcome of quantum assessment."

Accordingly, both appeals were allowed for statistical purposes.