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

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No. 2481/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2013-14) Shri Sama Prabhakar Vs. Income Tax Officer Reddy, NALGONDA Ward – 1 PAN: AXHPS4047B Nalgonda (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: Advocate SNSR Chinmai राज� व �ारा/Revenue by: Shri Mohan Babu, Sr. AR सुनवाई की तारीख/Date of hearing: 09/07/2026 घोषणा की तारीख/Pronouncement: 15/07/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Shri Sama Prabhakar Reddy (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) (“Ld. CIT(A)”) dated 14.01.2025 for the A.Y. 2013-14. 2. At the outset, it is noticed that there is a delay of 275 days in filing the present appeal before the Tribunal. The assessee has filed a petition for condonation of delay supported by an affidavit explaining the reasons for the delay. The Learned Authorized Representative (“Ld. AR”) submitted that

the assessee is a small milk distributor working on a commission basis and is not well educated. It was submitted that the assessee is not well acquainted with the provisions of the Income-tax Act, the appellate procedure, or online/e-mail communications. Due to lack of proper knowledge and awareness, the assessee could not seek appropriate professional advice within the prescribed period of limitation. The Ld. AR further submitted that the assessee had consulted several persons regarding the course of action available against the impugned order and was eventually advised to file an appeal before the Tribunal. Thereafter, the assessee approached the present counsel and took necessary steps for filing the appeal. In the process, a delay of 275 days occurred. It was contended that the delay was neither deliberate nor intentional and that the assessee has a bona fide case on merits. Therefore, it was prayed that the delay may be condoned and the appeal may be admitted for adjudication on merits. 3. Per contra, the Learned Departmental Representative (“Ld. DR”) opposed the condonation petition and submitted that the reasons furnished by the assessee are not sufficient to explain the entire period of delay. It was therefore prayed that the delay should not be condoned and the appeal be dismissed as barred by limitation. 4. We have considered the rival submissions and perused the material available on record. It is an undisputed fact that there is a delay of 275 days in filing the present appeal before the Tribunal. The explanation furnished by the assessee is that he is a small milk distributor earning commission income, is not

well educated, and is not conversant with the legal and procedural requirements relating to filing of appeals under the Income-tax Act. The assessee has further explained that due to lack of awareness and proper guidance, he could not take timely professional advice and, after consulting various persons, ultimately approached a tax professional for filing the present appeal. On consideration of the facts and circumstances of the case, we find that the explanation offered by the assessee cannot be said to be mala fide or lacking in bona fides. There is nothing on record to suggest that the delay was deliberate, intentional, or attributable to any ulterior motive. It is a settled proposition of law that substantial justice should prevail over technical considerations and that matters should ordinarily be decided on merits rather than being dismissed on technical grounds. We further note that the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. CIT (174 taxmann.com 21) has categorically observed that while dealing with petitions for condonation of delay, a liberal and justice-oriented approach should be adopted so as to advance the cause of substantial justice. Considering the totality of facts and circumstances, the explanation furnished by the assessee, the affidavit placed on record, and the principles laid down by the Hon’ble Supreme Court, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. Accordingly, in the interest of substantial justice, we condone the delay of 275 days in filing the present appeal and admit the appeal for adjudication on merits.

“1. The order passed by the Learned Commissioner of Income Tax (Appeals) u/s 250 dated 14.01.2025 confirming the penalty of Rs. 30,000/- under section 271(1)(b) is erroneous in law and on facts, arbitrary, and liable to be set aside. 2. The Learned CIT(A) erred in confirming penalty for alleged noncompliance with notices dated 08.07.2021, 24.12.2021, and 10.03.2022, without appreciating that the said period coincided with the COVID-19 pandemic when normal life, movement, and access to professional and electronic assistance were severely disrupted, and therefore the alleged non-compliance was not willful or contumacious. 3. The Learned CIT(A) failed to appreciate that the appellant is a small commission-based milk distributor, not well educated and not conversant with electronic communications, and depends on others for accessing and responding to online notices, and the alleged noncompliance occurred due to lack of effective knowledge of electronic communications coupled with the extraordinary circumstances prevailing during the pandemic period. 4. The Learned CIT(A) erred in confirming penalty despite the existence of reasonable cause and in disregard of the principles embodied in section 273B and further erred in confirming the penalty mechanically without proper appreciation of surrounding circumstances, and in any event the penalty confirmed is harsh, unjustified, and liable to be deleted in full. 5. Any other ground that may be urged at the time of hearing.” 6. The brief facts of the case are that the assessee had filed an appeal before the Ld. CIT (A) against the penalty order passed by the Learned Assessing Officer (“Ld. AO”) under section 271(1)(b) of the Income-tax Act, 1961 (“the Act”) for Assessment Year 2013-14. The Ld. CIT(A), however, dismissed

the appeal of the assessee and confirmed the penalty levied by the Ld. AO.

“6. We have heard the rival contentions and perused the material on record. In the present case, the assessee has not appeared before the Assessing Officer and so also a non-filer. We fail to understand as to why the assessee was not filing return of income, despite huge cash received by the assessee over a period of 5 years. In our considered opinion, it was the duty of the assessee to file return of income and the assessee should have been

vigilant in responding to the notices, more particularly when the assessee was indulging in essential service like supply of milk. Covid period has not prevented the assessee to supply milk or deposit amount in the bank account and it is evident that the assessee was active during covid period also. Furthermore, the assessee was not complying before the Ld.CIT(A) and more than 8 notices were issued to the assessee which is clear in paragraph 6 of the order of the Ld.CIT(A) order. We cannot approve the conduct of the assessee, however, considering the totality of circumstances and more particularly since the assessment was completed during the covid period and keeping in view the principles of natural justice, we grant another opportunity to the assessee to present his case before the Ld.CIT(A) subject to payment of Rs.10,000/- each in ITA No.907 & 919/Hyd/2024 and Rs.15,000/- each in ITA No.920 & 921/Hyd/2024 and Rs.3,000/- in ITA No.922/Hyd/2024 and thus the total cost of Rs.53,000/- (Rupees fifty three thousand only) in favour of Prime Minister National Relief Fund, which shall be payable within a period of one month from the date of receipt of this order. Ld.CIT(A) is directed to grant fresh opportunity of being heard to the assessee. Further Ld.CIT(A) is also directed to admit any document / evidences as the case may be required to be filed by the assessee in support of his case. On considering all the documents and the evidences if any, filed by the assessee, Ld.CIT(A) shall decide the matter in accordance with law.” 10. On perusal of the above, it is evident that the satisfaction for initiation of penalty proceedings under section 271(1)(b) of the Act, which is the subject matter of the present appeal, emanates from the quantum proceedings that have already been restored by the Tribunal to the file of the Ld. CIT(A). In our considered opinion, once the very foundation on the basis of which satisfaction was recorded and the impugned penalty proceedings were initiated has been set aside by the Tribunal for fresh adjudication, the penalty proceedings arising therefrom is also liable to be set aside. Therefore, in the interest of justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter to his file with a direction to re-adjudicate the penalty appeal afresh after

finalization of the quantum proceedings pursuant to the directions contained in the Tribunal’s order in ITA No. 907/Hyd/2024 dated 13.11.2024. Needless to mention, the Ld. CIT(A) shall provide adequate opportunity of being heard to the assessee and decide the issue in accordance with law.

Order pronounced in the Open Court on 15th July, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 15th July, 2026. Vinodan/sps

Copy to: S.No Addresses 1 Sama Prabhakar Reddy, H.No.6-2/302, Tejaswai Nilayam, Beside NG College, Hyderabad Road, Nalgonda 508001 2 Income Tax Officer Ward-1 Nalgonda 508001 3 Pr. CIT, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File

By Order Digitally signed by TUMMALACHARLA TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.07.15 12:18:42 +05'30'