SAMA PRABHAKAR REDDY,NALGONDA vs. ITO, WARD-1, NALGONDA

Thereafter, the AO vide his order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 26/03/2022, in absence of any explanation forthcoming regarding the source of the aforesaid cash deposits held the entire amount as having been sourced out of the assessee’s unexplained money under section 69A of the Act, and determined his income at the same amount. Also, the AO while culminating the assessment initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income.

Thereafter, the AO vide his order passed under section 271(1)(c) of the Act, dated 21/09/2022 imposed a penalty of Rs.39,39,139/- under section 271(1)(c) of the Act for concealment of particulars of income.

Aggrieved, the assessee assailed the order passed by the AO under section 271(1)(c) of the Act before the CIT(A). However, as the assessee had delayed the filing of the appeal by 764 days (i.e., two years and one month), the CIT(A) taking cognizance of the fact that the assessee despite admitting the aforementioned delay and indicating in his Memorandum of Appeal, i.e., Form-35 that an affidavit a/w a petition explaining the reasons leading to the condonation would be filed at the time of hearing of the appeal, had however not come forth with any such application/affidavit. Apart from that, the CIT(A) observed that the assessee, despite having afforded seven opportunities, had failed to participate in the appellate proceedings before him. Accordingly, the CIT(A) based on the aforesaid facts observed that not only the assessee had adopted a lackadaisical approach qua the appellate proceedings before him but also failed to remove the deficiencies in the appeal before him, dismissed the appeal by treating the same as barred by limitation in terms of section 249(3) of the Act.

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

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below as well as considered the material available on record.

Considering the Ld. AR’s contention that the assessee had inadvertently failed to furnish the condonation application a/w the supporting affidavit explaining the reason leading to the delay at the time of hearing of the appeal, the matter in all fairness and in the interest of justice specifically in the backdrop of the fact that the quantum assessment framed by the AO vide his order passed under section 144 r.w.s 144 r.w.s 144B of the Act, dated 26/03/20222 had been set aside by the Tribunal vide its order passed in ITA No.907/Hyd/2024, dated 13/11/2024, thus, on the same terms be set aside to the file of the CIT(A) with a direction to re-decide the matter after disposing of the quantum appeal.

Admittedly, the assessee had delayed the filing of the appeal before the CIT(A) and despite stating at Column No.15 of the Memorandum of Appeal that an application explaining the reason leading to the delay in filing of the appeal a/w supporting affidavit would be filed in the course of the hearing of the appeal, but had failed to do the needful in the course of the proceedings before the CIT(A).

However, we cannot remain oblivion of the fact that as the quantum assessment framed in the case of the assessee vide the order passed under section 147 r.w.s. 144 r.w.s 144B of the Act, dated 26/03/2022, in which the impugned order of penalty proceedings under section 271(1)(c) were initiated, had been set aside by the Tribunal vide its order passed in ITA No.907/Hyd/2024, dated 13/11/2024 to the file of the CIT(A) for fresh adjudication in accordance with law. We are of firm conviction that in all fairness and in the interest of justice, now when the very basis on which the impugned proceedings had been initiated does no more survive and has been set aside, the present order passed by the CIT(A) summarily dismissing the appeal and approving the order passed by the AO under section 271(1)(c) of the Act cannot be sustained.

We thus, in terms of our aforesaid deliberations, set aside the order of the CIT(A) to his file with a direction to re-adjudicate the appeal after disposing of the quantum appeal which has been set aside by the Tribunal to his file for fresh adjudication.

In the result, appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.