Rectification under S.154 vacating LTCG addition post-Vivad se Vishwas settlement renders original reassessment non-surviving; delay condoned on bona fide belief.

आदेश/ORDER 

PER RAVISH SOOD, JM:

The present appeals filed by the abovementioned assessee’s are directed against the respective orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 30.04.2024 and 27.05.2025, which, in turn arises from the respective orders passed by the Assessing Officer (for short, “A.O”) under section 143(3) r.w.s. 147 of the Income-Tax Act, 1961 (for short, “the Act”), both dated 28.12.2016 for AY 2009-10.

2. As the issue involved in the captioned appeals are inextricably interlinked and interwoven, therefore, the same are taken up together and are disposed of vide a consolidated order. We shall first take up the appeal in ITA No. 468/VIZ/2025 wherein the impugned order has been assailed by the assessee on the following grounds of appeal before us:

“1. That, on the facts and in the circumstances of the case, and in law, the order dated 30.04.2024 passed by the Ld. CIT (Appeals), NFAC, confirming the assessment order passed U/S 143(3) r.w.s. 147 of the IT Act, by the Deputy Commissioner of Income Tax, Circle-2, Vijayawada, dt 28.12.2016, is erroneous, bad in law, and liable to be quashed.

2. That the Learned CIT(A) erred in passing an ex-parte order without granting sufficient and proper opportunity of being heard to the appellant, thereby violating the principles of natural justice.

3. That the impugned appellate order has been passed in violation of the mandatory provisions of Section 250(6) of the Income-tax Act, 1961, which require the Commissioner (Appeals) to state the points for determination, the decision thereon, and the reasons for the decision.

4. That the Learned CIT(A) failed to appreciate that the Assessing Officer had already passed an order under Section 154 of the Act on Dt 04.08.2021 rectifying the impugned assessment order, pursuant to which the demand was reduced to Nil. The CIT (A) erred in law in ignoring the effect of the said rectification order and proceeded to uphold the original reassessment order which is non-existent.

5. For the foregoing reasons, as may be urged at the time of hearing, the appellant prays that the assessment order passed by the Learned Commissioner of Income Tax (Appeals) be quashed, and that the addition made therein be deleted, as being contrary to law, facts, and principles of natural justice.”

3. Succinctly stated, the AO observing that the assessee had not filed her return of income for the year under consideration, i.e, A.Y. 2009-10, initiated proceedings under section 147 of the Act. Thereafter, the AO issued a notice under section 148 of the Act, dated 29.02.2016. In response, the assessee e-filed her return of income for the A.Y. 2009-10 on 09.11.2016, declaring an income of Rs.1,84,550/-. Thereafter, the A.O vide his order under section 143(3) r.w.s 147 of the Act, dated 28.12.2016, after making an addition of Long-Term Capital Gains (for short, “LTCG”) of Rs.1,16,58,384/- (assessee’s share) framed the assessment.

4. Aggrieved, the assessee carried the matter in appeal before the CIT(A) who vide his order dated 30.04.2024 dismissed the same.

5. The assessee aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

6. We have heard the Learned Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record.

7. Shri C Subrahmanyam, CA, Learned Authorised Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the issue involved in the present appeal