KURUVA PAKKIRAPPA,ADONI vs. ITO, WARD-1, ADONI

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ITA 1323/HYD/2026Status: DisposedITAT Hyderabad05 August 2026AY 2019-202010 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing appeals before the CIT(A) due to the assessee's lack of technical knowledge and the nature of his income. The CIT(A)'s orders were set aside, and the matters were remanded to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee, an SBI Customer Service Point agent, did not file his return of income. The assessment was reopened, and the Assessing Officer estimated income at 8% of bank credits, also levying penalties. The assessee's appeals to the CIT(A) were dismissed due to significant delays.

What were the issues?

Whether the delay in filing appeals before the CIT(A) should be condoned, and if so, whether the assessment and penalty orders should be adjudicated on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 270A,Section 271B,Section 272A(1)(d),Section 139,Section 148,Section 142(1),Section 44AB,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO

Pronounced: 05.08.2026

आयकर अपीलीय अिधकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD SMC-BENCH, HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT

ITA Nos.1322 to 1325/HYD./2026 िनधा�रण वष�/Assessment Year 2019-2020) KURUVA PAKKIRAPPA ITO, WARD-1 5/31 JOHARAPURAM AAYKAR BHAVAN, VILLAGE, ASPARI, BESIDE RTC ADONI-518301, ANDHRA BUSTAND Vs. PRADESH KURNOOL-518301, ANDHRA PRADESH अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number CLAPP1385A of Assessee: अपीलाथ� �ारा/Appellant Sri T Satyanarayana, Advocate represented by: ��थ� �ारा/Respondent Shri Laxmi Kanth, SR AR represented by: सुनवाई की तारीख / Date of conclusion of hearing: 28.07.2026 घोषणा की तारीख / Date of pronouncement: 05.08.2026

2 ITA.Nos.1322 to 1325/Hyd./2026 आदेश / ORDER These four appeals by the Assessee are directed against four separate Orders dated 20.02.2026 and 18.02.2026 of the learned CIT(A) arising from the assessment order passed u/sec.147 r.w.s.144B, penalty levied u/sec.270A, 271B and 272A(1)(d) of the Income Tax Act [in short "the Act"], 1961, respectively, for the assessment year 2019-2020.

2.

The assessee is an individual and working as SBI Customer Service Point/Bank Mithra Agent and has not filed his return of income u/sec.139 of the Act for the year under consideration. The assessment was reopened by the Assessing Officer by issuing notice u/sec.148 on 27.03.2023. In response to the notice, the assessee filed return of income declaring income from commission of Rs.2,45,680/-. During the assessment proceedings, the Assessing Officer noted that the assessee has various transactions in his two bank accounts with SBI having total credits of Rs.1,83,15,782/- and cash withdrawal of Rs.1,77,61,120/- during the year under consideration. In reply to the notice issued by the

3 ITA.Nos.1322 to 1325/Hyd./2026 Assessing Officer u/sec.142(1) of the Act, the assessee explained that he is an Agent in SBI Customer Service Point/Bank Mithra Agent and therefore, the transaction in his bank accounts is not his income but the assessee is earning only commission income. The Assessing Officer completed the assessment by estimating the income of the assessee @ 8% on the total credits of Rs.1,83,15,782/- amounting to Rs.14,65,263/- and also initiated the penalty u/sec.270A as well as penalty u/sec.271B and 272A(1)(d) of the Act for non-getting the accounts audited u/sec.44AB of the Act and non-compliance of notice u/sec.142(1) of the Act, respectively. The assessee challenged the assessment order before the learned CIT(A) however, the appeal filed by the assessee was belated after a delay of 595 days. Similarly, the appeals filed against the penalty orders were also belated by 456 days and hence, the learned CIT(A) dismissed all the appeals of the assessee in limine after declining to condone the delay in filing the appeals.

4 ITA.Nos.1322 to 1325/Hyd./2026 3. The learned Authorised Representative of the Assessee has submitted that the assessee has explained the cause of delay that assessee was not aware of the assessment order passed by the Assessing Officer as well as the penalty orders as the assessee was not able to access the Income Tax Portal due to lack of technical knowledge and he came to know about the impugned orders passed by the Assessing Officer when he received an intimation of the outstanding tax demand cum bank attachment notice dated 27.11.2025. Immediately, the assessee took steps to file the appeals before the learned CIT(A) but the appeals filed by the assessee were dismissed as there was delay of 595 and 456 days. The learned Authorised Representative of the Assessee has thus submitted that the Assessing Officer has assessed the entire credit in the bank account of the assessee by estimating the same @ 8% whereas the commission as per the Memorandum of Understanding between the assessee and the bank is only at fixed amount per transaction and average commission income of the assessee comes to Rs.9,000/- to Rs.10,000/- per month. Thus, the credits in the bank account, which is

5 ITA.Nos.1322 to 1325/Hyd./2026 in the nature of Escrow account, is not the income of the assessee and further, the estimation of the income @ 8% is highly arbitrary and unjustified. Thus, the learned Authorised Representative of the Assessee has submitted that if the delay in filing the appeals before the learned CIT(A) are not condoned it would result in gross injustice as the Assessing Officer has made high addition in comparison to the real commission income of the assessee and also levied various penalties. Thus, he has pleaded that the delay in filing the appeals before the learned CIT(A) may be condoned and the matter may be remanded to the record of the Assessing Officer for fresh adjudication by considering the relevant details and record.

4.

On the other hand, the learned DR has opposed to the condonation of delay in filing the appeals before the learned CIT(A) and submitted that this is a case of gross negligence on the part of the assessee as after filing the return of income in response to notice u/sec.148 of the Act, the assessee did not comply with the notice issued by the Assessing Officer which has resulted the assessment framed

6 ITA.Nos.1322 to 1325/Hyd./2026 by the Assessing Officer by estimating the income of the assessee @ 8%. He has relied upon the orders of the learned CIT(A).

5.

I have considered the rival submissions as well as relevant material on record. The assessee has explained the cause of delay in filing the appeals before the learned CIT(A) that the assessee was not aware about the assessment order as well as the penalty orders passed by the Assessing Officer and only when the bank account of the assessee was attached for recovery of the demand, the assessee came to know about the orders passed by the Assessing Officer and therefore, the appeals were filed belatedly by the assessee. The assessee has filed an affidavit/application for condonation of delay which was reproduced by the learned CIT(A) in Para no.2 of the impugned order as under:

“1. The appellant respectfully submits that the appeal against the assessment order ought to have been filed on or before 09.10.2024. However, due to certain unavoidable and bona fide circumstances, the present appeal is being filed on 08.01.2026, resulting in a delay of 456 days. 2. The delay is neither intentional nor deliberate. It has occurred due to the following genuine and reasonable causes,

7 ITA.Nos.1322 to 1325/Hyd./2026 1. The appellant is educated only up to the Degree level and has very limited exposure to digital processes, online communications, and the procedural requirements of the Income Tax Department. The appellant was not aware of the passing of the assessment order dated 10.09.2024, as he had not been able to access the Income Tax portal due to lack of technical knowledge. He came to know of the existence of the order only when he received an Intimation of Outstanding Tax Demand cum Bank Attachment Notice dated 27.11.2025. With the assistance of a tax consultant, the appellant accessed the Income Tax portal for the first time on 03.12.2025, where he became aware of the passed order and the earlier notices.

3.

Immediately upon learning of the appealable order and the time limits prescribed under the law, the appellant engaged counsel. Despite certain professional and personal constraints faced by the counsel, the appeal papers were prepared at the earliest possible time, and the appeal is now being filed without any further delay.

4.

In light of the above bona fide circumstances, the appellant humbly prays. that the Honble Commissioner may kindly condone the delay of 456 days in the interest of substantial justice. Non- condonation of delay would cause grave hardship and irreparable loss to the appellant, whereas condonation would allow the matter to be decided on its merits."

5.1. Though the lack of technical knowledge cannot be a reason for delay in filing the appeals however, having considered the background of the assessee who is working as

8 ITA.Nos.1322 to 1325/Hyd./2026 SBI Customer Service Point/Bank Mithra Agent and getting a very meagre commission income based on each transaction of deposit, opening of bank account, cash withdrawal by the customers through the Escrow account in the name of the assessee maintained by the bank. If appeal is dismissed in limine, the assessee would be remediless. Thus, it is clear that the transactions in the bank account do not belong to the assessee but these are the transactions by the customers with the bank through the assessee. The assessee has claimed to have an average commission of Rs.9,000/- to Rs.10,000/- per month and therefore, the estimation of income by the Assessing Officer @ 8% ignoring the fact that the assessee is only working as an Agent/operating as SBI customer service point cannot have the income @ 8% which is applied by the Assessing Officer under the provisions of sec.44AD of the Act. Therefore, considering the facts and circumstances of the case, a lenient view is taken regarding the reasons explained by the assessee for delay in filing the appeals before the learned CIT(A) and accordingly, the delay in filing the appeals before the learned CIT(A) is condoned

9 ITA.Nos.1322 to 1325/Hyd./2026 subject to cost of Rs.2,000/- [Rs. Two Thousand Only] per appeal in total Rs.8,000/- [Rs. Eight Thousand Only] to be paid to ITAT Tax Bar Association, Hyderabad within a period of one month from the date of this order.

6.

Since the Assessing Officer has passed an ex-parte assessment order and also levied the penalties for non- compliance of the notice u/sec.142(1) of the Act and the learned CIT(A) has dismissed the appeals of the assessee in limine without deciding the same on merits therefore, in view of condonation of delay in filing the appeals before the learned CIT(A), the impugned orders of the learned CIT(A) are set aside and all the matters i.e., assessment and penalties u/sec. 270A, 271B and 271A(1)(d) are remanded to the record of the Assessing Officer for fresh adjudication after giving an appropriate opportunity of hearing to the assessee. Needless to say, the assessee shall furnish relevant details and record before the Assessing Officer.

7.

In the result, all the four appeals of the Assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files

10 ITA.Nos.1322 to 1325/Hyd./2026 Order pronounced in the open Court on 05.08.2026

Sd/- VIJAY PAL RAO VICE PRESIDENT Hyderabad, Dated 05th day of August, 2026 VBP Copy to: 1 KURUVA PAKKIRAPPA, 5/31 JOHARAPURAM VILLAGE, ASPARI, ADONI-518301, ANDHRA PRADESH 2 ITO, WARD-1, AAYKAR BHAVAN, BESIDE RTC BUSTAND, KURNOOL-518301, ANDHRA PRADESH 3 THE PR. CIT, KURNOOL 4 THE D.R., ITAT, HYDERABAD SMC- BENCH, HYDERABAD 5 GUARD FILE VADREV TRUE COPY Digitally signed by VADREVU U PRASADA RAO ASSISTANT REGISTRAR / PRASAD Date: I.T.A.T., HYDERABAD 2026.08.05 A RAO 10:57:16 +05'30'

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