KUPPIREDDY SRINIVAS REDDY,K.V. RANGAREDDY vs. ITO, WARD-1, MAHABUBNAGAR

आयकर अपीलीय अिधकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD B-BENCH, HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G. ACCOUNTANT MEMBER ITA Nos.395, 396, 397 & 398/HYD/2026 िनधा�रण वष�/Assessment Years: 2015-2016 & 2016-2017 KUPPIREDDY SRINIVAS REDDY ITO, WARD-1 H.NO. 9-29/3/22, SRILAKSHMI NILAYAM, NEW TOWN BANDLAGUDA JAGIR, MAHABUBNAGAR Vs. DON BOSCO NAGAR, MAHBUBNAGAR- S.O. RAJENDRANAGAR,, 509001, TELANGANA RANGA REDDY-500086, TELANGANA अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number BKYPS8239J of Assessee: अपीलाथ� �ारा/Appellant represented by: Sri KC Devdas, CA ��थ� �ारा/Respondent represented by: Sri K Prasad, Sr. AR सुनवाई की तारीख / Date of conclusion of hearing: 29.06.2026 घोषणा की तारीख / Date of pronouncement: 03.07.2026

2 ITA.Nos.395 to 398/Hyd./2026 आदेश / ORDER PER BENCH: These two sets of two appeals [Total 4 appeals] by the Assessee are directed against 04 separate Orders of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, all dated 15.12.2025 arising from assessment orders u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act [in short "the Act"], 1961 and penalty Orders u/sec.271(1)(c) of the Income Tax Act [in short "the Act"], 1961, for the assessment years 2015-2016 and 2016-2017, respectively. 2. First we take up the quantum appeals i.e., ITA.Nos.395 and 397/Hyd./2026 for the assessment years 2015-2016 and 2016-2017 where the assessee has raised common grounds except quantum of addition. The grounds raised by the assessee for the assessment year 2015-2016 [ITA.No.395/Hyd./2026] are as under: “Under the facts and circumstances of the case: 1. The order of the Commissioner of Income Tax Appeals (NFAC), (The Ld.CIT(A)') in passing an order u/s.147 r.w.s. 144 of the Income Tax Act 1961 ('the Act') on 15.12.2025 and in determining the

3 ITA.Nos.395 to 398/Hyd./2026 Income at Rs.78,94,680 is totally unsustainable both on fact and in law. 2. The Ld.CIT (A)/NFAC failed to note that the Appellant was prevented by reasonable and sufficient cause in not complying to the notices issued by the department from time to time. 3. The Ld.CIT(A)/NFAC erred in holding that the appeal is not maintainable having regard to the reasons explaining in the Condonation of Delay application. 4. The Appellant reserves it's right to further substantiate the reasons for delay in filing the appeal by 569 days. 5. The learned CIT(A)/NFAC erred in not considering the merits of the case which was fully explained in the Statement of Facts filed along with Form No.35 and the grounds of Appeal filed thereon. 6. The Ld CIT (A)/NFAC ought to have decided the appeal on merits as the Appellant earned nominal profits on the distribution of cool drinks of Coca Cola Beverages (P) Ltd under the name and style of M/s. Balaji Agencies during the assessment year 2015-16. 7. The Ld CIT(A)/NFAC failed to note that the Appellate was an illiterate person and had no background of education whatsoever as he had studied only up to 10th Class in Telugu Medium. 8. The Ld CIT(A)/NFAC having called for the Statement of Transactions from the company pertaining to the appellant and having found he was only in a small way selling the cool drinks of Coca Cola and therefore ought to have clearly held that the entire gross value of transactions was not Income and adopted an easy route of holding that they were unexplained deposits u/s. 69A which is contrary to the facts and evidence on record. 9. The Ld.CIT(A)/NFAC failed to note that the deposit of Rs.78,94,680 name with State Bank of India during the F.Y 2014-15 related to the assessment year 2015-16 were all gross value of transactions and did not have the character of Income.

4 ITA.Nos.395 to 398/Hyd./2026 10. The Ld.CIT(A)/NFAC failed to note the none of the statutory notices were received by the appellant and the appellant being non-computer savvy was not aware of the intricate provisions of the I.T ACT and therefore the Ld.CIT(A) erred in not containing the delay in filing the appeal. 11. The Ld.CIT(A)/NFAC erred in not considering the facts on merits mentioned in the Statement of Facts and Grounds of Appeal filed along with Form No:35 and erred in coming to a conclusion that the entire deposits of Rs.78,94,680/- was Income assessable u/s.69A and erred in ignoring the statement furnished by the Coca-Cola company. 12. The Ld.CIT(A)/NFAC failed to note that the appellant had shifted his address and a copy of the Rental Deed was also filed to demonstrate the above fact and thus erred in coming to the conclusion that the sum of Rs.78,94,680 was assessing as Income u/s.69A of the I.T Act, 1961 and the deposits. 13. The Ld.CIT(A)/NFAC failed to note that the appellant in the Statement of Facts filed along with appeal had clearly stated that he had filed VAT Returns disclosing purchases and sales before the commercial Taxes Dept., Ledger copy of purchases and payments made to the company were also filed as supporting evidence and also contended that the cool drinks distribution business operates on a low gross profit margin of about 3% and that the deposits in the bank account were sales and that the net profit was about 1% of the sales and thus he had no Income taxable under the I.T Act, 1961. 14. The Ld.CIT(A)/NFAC erred in taxing the sum of Rs.78,94,680 as Income merely becomes of the appellant did not file his Return of Income overlooking the fact that he had no taxable Income.

5 ITA.Nos.395 to 398/Hyd./2026 15. The Appellant further submits that the assessment has been finalised without proper consideration of the facts and in the process violating the principles of natural justice and fair-play. 16. The Appellant has every reason to believe that the notice Issued u/s.148 of the I.T. Act 1961 on 20.04.2022 being beyond three years from the end of the assessment-year 2015-16 the Income assessable would be less then 50lacs adopting the principles of assessment of Income and not the gross figure of Rs.78,94,680 the Income thereupon would fall below 50lacs rendering the entire proceedings being without jurisdiction and thus the additions are to be deleted. 17. The Appellant craves to add, modify or amend the above grounds anytime during the course of appeal.”

6 ITA.Nos.395 to 398/Hyd./2026 delay. Learned Counsel for the Assessee has submitted that the assessments for the assessment years 2015-2016 and 2016-2017 were framed ex-parte as no notice issued by the Assessing Officer was served physically on the assessee. The assessee is an uneducated person and was doing business of trading in cold drinks distribution of Hindustan Coca Cola Beverages Pvt. Ltd., [in short “HCCBPL”]. The Assessing Officer has assessed the total deposits in the bank account of the assessee as income of the assessee which is a gross injustice when the bank account of the assessee reflects the transaction of deposit as well as the transfer of money in favour of the soft drink company HCCBPL. Thus, the learned Counsel for the Assessee has submitted that the deposit in the bank account is nothing but the turnover of the assessee from sales of the soft drink which is used for the purpose of purchase of the soft drink as reflected from the bank account itself. However, the Assessing Officer has ignored the transactions showing the transfer of money from the bank account of the assessee to the HCCBPL and considered only the deposits made by the assessee out of its turnover. Thus,

7 ITA.Nos.395 to 398/Hyd./2026 the learned Counsel for the Assessee has submitted that the Assessing Officer has acted arbitrarily in making the additions while passing the ex-parte assessment order instead of assessing the correct income of the assessee as per the CBDT Circular. The learned Counsel for the Assessee has further submitted that dismissing the appeal in limine by the learned CIT(A) has resulted a gross injustice to the assessee keeping in view that the Assessing Officer has made an arbitrary and unjustified addition while passing the ex-parte assessment. The learned Authorised Representative of the Assessee has submitted that the assessee has explained the reasons for the delay in filing the appeals before the learned CIT(A) and specifically pointed out that the assessee shifted his residence from the old address to the new address whereas the notices were issued and sent by the Assessing Officer at the old address of the assessee which were not served upon the assessee. The assessee filed copy of the Rent Deed to show that the assessee shifted its residence and therefore, there was a ‘reasonable and bonafide reasons’ beyond the control of the assessee for not receiving the

8 ITA.Nos.395 to 398/Hyd./2026 notices issued by the Assessing Officer. Due to lack of knowledge of the notice issued by the Assessing Officer as well as the assessment order passed by the Assessing Officer, the assessee could not file the appeal before the learned CIT(A) within the period of limitation provided u/sec.249(3) of the Act. Learned Counsel for the Assessee has then referred to the affidavit filed by the assessee before the Tribunal explaining the cause of delay and submitted that only when the assessee received a communication relating to the outstanding demand and recovery proceedings the assessee verified the status and found that the assessment order as well as the penalty orders were passed by the Assessing Officer and therefore, the assessee immediately took steps for filing the appeals before the learned CIT(A). The learned Authorised Representative of the Assessee has also referred to the SMS communication received from the Income Tax Department which were forwarded to the Chartered Accountant and therefore, the assessee was under the bonafide belief that necessary action would be taken by the Tax Consultant as the assessee was completely dependent on

9 ITA.Nos.395 to 398/Hyd./2026 the Tax Consultant. He has also referred to the order passed by the Assessing Officer u/sec.271(b) and submitted that in Para no.3.4 of the said order it is stated that a Reference was made to the Verification Unit through Insight Portal on 22.04.2024 to serve the notice/letters to the assessee physically however, it is stated that till date no report has been received by the Verification Unit which shows that the notices were not served physically to the assessee. He has also referred to the copy of the demand notice dated 20.06.2026 and submitted that all the notices were sent at the old address whereas the assessee shifted to the new address which was explained before the learned CIT(A) with documentary proof of lease agreement but the learned CIT(A) has declined to condone the delay. In support of his contention, he has relied upon the following Judgments: i. CIT vs. K.F. Bioplant (P) Ltd., 233 Taxman 74 (Bom.HC) ii. Collector, Land Acquisition vs. MST. Katiji & Others [1987] 167 ITR 471 (SC)

10 ITA.Nos.395 to 398/Hyd./2026 3.1. The learned Counsel for the Assessee submitted that even the vigilant litigant is prone to commit mistakes and therefore, unintentional lapses on the part of the litigant should not normally a closed door of justice permanently. He has further submitted that Hon'ble Supreme Court has also laid down the principle that when substantial justice and technical considerations are pitted against each other, then, the cause of substantial justice deserves to be preferred so that the dispute can be dissolved on the merits instead of technicalities. There is no presumption that the delay is occasioned deliberately or on account of culpable negligence or malafides. Refusing to condone the delay can result in a meritorious matter being thrown out at a threshold and cause of justice defeated. Thus, learned Counsel for the Assessee has submitted that when the assessee has explained the cause of delay by giving all the relevant facts which are duly supported by the documentary evidences then, the learned CIT(A) ought to have condone the delay and decide the appeal on merits instead of dismissing the same in limine.

11 ITA.Nos.395 to 398/Hyd./2026 4. On the other hand, the learned DR has submitted that there is an inordinate delay of 569 and 593 days in filing the appeals before the learned CIT(A) for the assessment years 2015-2016 and 2016-2017 respectively and assessee has failed to explain the reasonable cause. The only reason explained by the assessee was change of address which can be considered for the purpose of service of notice and assessment order physically however, the notice and orders were also sent through email to the email-ID of the assessee and therefore, the assessee cannot take this excuse of change of address. He has further contended that assessee cannot take an excuse of change of address when the same was not updated with the Income Tax Department therefore, the Assessing Officer cannot be blamed for issuing the notices to the address available with the Department. He has referred to the findings of the learned CIT(A) and submitted that the learned CIT(A) has considered the explanation of the assessee and found that this is not sufficient explanation to the satisfaction of the learned CIT(A) and therefore, the negligence on the part of the assessee cannot be considered

12 ITA.Nos.395 to 398/Hyd./2026 as sufficient cause. He has further submitted that the assessee has is a non-complier and has not filed any return of income for the year under consideration and consequently, the Assessing Officer reopened the assessment by issuing the notice u/sec.148 of the Act based on the information that there are huge cash deposits in the bank account of the assessee. Thus, the learned DR has vehemently opposed to the condonation of delay in filing the appeal before the learned CIT(A). 5. In rebuttal, the learned Counsel for the Assessee has submitted that during the assessment year under consideration the assessee has incurred huge loss and therefore, the assessee could not file the return of income. In subsequent assessment years the assessee is regularly filing the returns of income which were accepted by the Department therefore, there was no question of escapement of any income for these two years.

13 ITA.Nos.395 to 398/Hyd./2026 after a delay of 569 days and 593 days for the assessment years 2015-2016 and 2016-2017 respectively. The reasons for delay explained by the assessee are reproduced by the learned CIT(A) in Para no.5 as under: "Respected Sir, The appellant humbly submits this petition seeking condonation of delay of 569 days in filing the appeal against the assessment order dated 03.02.2024 passed u/s 147 r.w.s. 144 of the Income Tax Act, 1961. 1. The delay in filing the appeal has occurred solely due to non- receipt of statutory notices and the assessment order at the correct address, which was beyond the control of the appellant.

1.1. The appellant had shifted his residence from 1-17/3, Midjil, Kalwakurthy, Mahabubnagar, Telangana 509357 to H.No. 9-29/3/22, Bandlaguda Jagir Village, Gandipet Mandal, Ranga Reddy District, Telangana 500086, with effect from 1st September 2021. (Rental deed date 25th October 2021)

1.2. All statutory notices issued u/s 148 and 142(1) as well as the assessment order were sent to the old address at Midjil, Mahabubnagar, despite the appellant no longer residing there. The appellant, therefore, did not receive

14 ITA.Nos.395 to 398/Hyd./2026 any of these communications and remained unaware of the proceedings and the order passed. 1.3. Only upon subsequent follow-up with the income tax department and on obtaining information through the Income Tax portal was the appellant made aware of the assessment order, by which time the period prescribed for filing the appeal had already lapsed. 1.4. The appellant has enclosed a Rental Deed evidencing his residence at the new address as proof of the change of address.

1.5 The assessee due to heavy competition in this line of business and suffered huge losses and discontinued this line of business and shifted to above said address.

15 ITA.Nos.395 to 398/Hyd./2026 5. There is a delay 569 days from the date of assessment order. So, YOUR HONOUR may condone the delay of 569 days to give justice the assessee. We request to your HONOUR to help the assessee and condone the delay. 6. The appellant may be permitted to draw the kind attention of the Hon'ble CIT(Appeals) to the observation made by the Hon'ble Apex Court in the landmark judgment in the case of Collector Land Acquisition, Anantnag & ANR Vs Mst. Katiji & Others (1987) 2 SCC 107(A-4), the relevant extract of which is reproduced below. “1, ….. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. …………… 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately or on account of culpable negligence, or account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious rise.

16 ITA.Nos.395 to 398/Hyd./2026 6. ………….. The appellant does not stand to benefit by resorting to delay. The appellant, therefore, prays the Hon'ble Commissioner of Income-Tax (Appeals) to kindly condone the delay, admit the appeal and pass appropriate orders granting relief as prayed for. 7. The appellant has acted in good faith and has no intention of evading statutory obligations. As soon as he became aware of the matter, he has approached the authorities through proper channels and filed the present appeal. 8. The appellant prays that the delay be condoned under section 251(1) read with section 254(2) of the Income Tax Act, 1961, as the cause of delay is genuine, unintentional, and not attributable to any fault on his part. 9. The appellant further submits that substantial justice would be served by allowing the appeal to be heard on its merits, rather than dismissing it due to a technical delay arising from incorrect address details. In view of the above, the appellant humbly requests that the delay be condoned and the appeal be admitted for hearing."

17 ITA.Nos.395 to 398/Hyd./2026

6.1. The assessee has explained that due to non-receipt of statutory notices and assessment order at the correct address the assessee was not aware about the impugned order passed by the Assessing Officer. The assessee has given details of the old address where the Assessing Officer issued the notice whereas the assessee shifted to a new address. In support of the said contention, the assessee filed the Rent Deed. The learned CIT(A) has not disputed the change of address by the assessee and even otherwise that fact as explained by the assessee of change of address is not in dispute. Though, there was no fault on the part of the Assessing Officer for sending the notice at the old address however, the change of address resulting non-receipt of the notice issued by the Assessing Officer as well as the assessment order is the main reason for the non-receipt of the order as well as communication by the assessee. Thus, this fact of non-service of notice and assessment order physically on the assessee is also corroborated by the order passed by the Assessing Officer u/sec.271(1)(b) dated 20.06.2024 in Para no.3.4 as under:

18 ITA.Nos.395 to 398/Hyd./2026 “As per SOP case was also referred to Verification Unit (VU) through Insight Portal on 22.04.2024 to serve notices/letters on the assessee physically. However, till date, report has not been submitted by the Verification Unit.”

6.2. Therefore, it is not a question of who is at fault for non-communication of notice and assessment order but whether the explanation of the assessee for having no knowledge of the assessment order is found to be factually correct and bonafide or not. The assessee has also filed an affidavit explaining the cause of delay which reads as under:

“AFFIDAVIT I, Kuppireddy Srinivasa Reddy, S/o Kuppireddy Narayana Reddy, aged about 56 years, residing at H.No. 9-29/3/22, Bandlaguda Jagir Village, Gandipet Mandal, Ranga Reddy District, Telangana 500086, do hereby solemnly affirm and state as under:

I am the appellant in the above appeal and am fully 1. acquainted with the facts of the case. I am competent and authorised to swear this affidavit. For Assessment Year 2015-16, an assessment order 2. under section 147 read with sections 144 and 1448 of the Income-tax Act, 1961 ( 'the Act' ) was passed on

19 ITA.Nos.395 to 398/Hyd./2026 03.02.2024, wherein an amount of ₹78,94,680/- was treated as unexplained money under section 69A of the Act. The appeal against the said assessment order was 3. required to be filed on or before 04.03.2024 period. However, the appeal was filed before the learned Commissioner of Income Tax (Appeals), NFAC, on 24.09.2025 resulting in a delay of 569 days. 4. The delay was neither deliberate nor intentional but occurred due to circumstances beyond my control and due to my bona fide belief that my tax matters were being properly attended to by my Chartered Accountant Shri N. Shashi Kumar 5. I was born and brought up in a rural village in Mahabubnagar District and have studied only up to the 9th standard. I cannot read or write English, and I have no knowledge of computers, e-mails, internet-based applications and electronic filing systems. 6. I was engaged in the business of distribution and sale of cool drinks in Midjil Village Mahbubnagar District. My business activities were largely confined to Midjil village and neighbouring villages, and I have throughout depended upon professional assistance for all tax- related compliances. 7. Until the year 2018, I was not even aware of the requirement of filing income-tax returns. Thereafter, on the advice of one of my friends, I engaged Mr. Namani Shashi Kumar, Chartered Accountant, for filing my returns. Since then, all my returns, portal-related

20 ITA.Nos.395 to 398/Hyd./2026 compliances and communications with the Income-tax Department were being handied through him. 8. The e-mail address and portal credentials used for income-tax purposes were created and maintained by the said Chartered Accountant. I did not have the technical ability to independently access the e-mail account or regularly monitor the Income-tax portal. I was under a bona fide belief that all statutory communications issued by the Department were being monitored and attended to by my tax consultant. I was originally residing at Midjil Village, 9. Mahabubnagar District. Owing to severe business losses and financial difficulties, 1 shifted my residence in September 2021 to Hyderabad and started residing with my son at Bandlaguda Jagir, Ranga Reddy District. The fact of my shifting residence was known to my tax 10. consultant. Since I had completely entrusted all income- tax matters to him, I believed that any necessary updates or compliances would be attended to by him. 11. From time to time, whenever I received any SMS communication from the Income-tax Department on my mobile phone, 1 forwarded the same to the said Chartered Accountant and believed that necessary action would be taken by him. I was under the Bonafide impression that the CA is taking care of the messages received from the Department. The Deponent has tabulated the dates when communication was sent to the assesse's mobile and also attached the screenshots

21 ITA.Nos.395 to 398/Hyd./2026 of the message chats evidencing forwarding of the messages received from the Department to the CA and his response to the same.

22 ITA.Nos.395 to 398/Hyd./2026 13. During the year 2025, I received further communications relating to outstanding tax demand and recovery proceedings. Upon receiving such communications, I informed my son and showed him the messages received from the Department. My son thereafter contacted the earlier Chartered 14. Accountant who did not respond to our calls and subsequently we consulted another senior Chartered Accountant, Mr. Ashok, practising at Mahabubnagar, for obtaining proper advice regarding the matter. Only at that stage did I become fully aware of the 15. assessment order, penalty order and the consequential demand raised by the Department. On being advised about the legal remedies available, immediate steps were initiated for filing the appeal before the learned CIT(A)-NFAC along with a petition seeking condonation of delay. The delay occurred because of: 16.  My limited educational background;  Inability to understand English and technical communications;  complete dependence upon my tax consultant for compliance matters;  change of residence from Midjil Village to Hyderabad.  Lack of awareness regarding electronic notices and portal-based proceedings; and

23 ITA.Nos.395 to 398/Hyd./2026  bonafide belief that my tax consultant was attending to all communications received from the Department.

24 ITA.Nos.395 to 398/Hyd./2026 would be thrown out at the threshold violating the principles of natural justice and fair play. 22. I therefore humbly pray that the Hon'ble Tribunal may be pleased to condone the delay of 569 days in filing the appeal before the learned CIT(A)-NFAC and pass such other order as may be deemed fit and proper in the facts and circumstances of the case.”

6.3. Though the assessee has committed a mistake for not verifying the relevant communication digitally and in ITBA Portal of the Department however, it is also a fact that due to change of address the assessee could not receive the notices issued by the Assessing Officer as well as the assessment order physically. It is also pertinent to note that the Assessing Officer has reopened the assessment for these two assessment years based on the information that there are cash deposits in the bank account of the assessee and passed the ex-parte assessment order by assessing the total deposits in the bank account to tax. This action of the Assessing Officer in assessing the total deposits in the bank account as income of the assessee is highly arbitrary when the assessments were reopened based on the deposits in the bank account and the additions were made by the Assessing

25 ITA.Nos.395 to 398/Hyd./2026 Officer by ignoring the debit side of the bank account showing the transfer of money on regular basis to HCCBPL. Once this fact is manifest and apparent from the bank account statement itself then, ignoring the said fact and making the addition of the entire deposit as income of the assessee instead of taking the deposit as turnover of the assessee from the business of purchase and sale of soft drink in the name and style of Balaji Agency is highly arbitrary and unjustified on the part of the Assessing Officer. Though there is an inordinate delay in filing the appeals however, refusing to condone the delay would certainly result a gross injustice to the assessee as the Assessing Officer has assessed the income arbitrarily instead of real income. The Assessing Officer was supposed to assess the real income based on the information and material available with him and therefore, when the addition is made based on the deposits in the bank account of the assessee then, it is also required to see the transactions of outflow of deposits and transfer of money clearly shows that the deposits in the bank account does not reflect the income but the same at the most is a gross receipt

26 ITA.Nos.395 to 398/Hyd./2026 being turnover of the business of purchase and sale of soft drink which is also subject to VAT as per the record filed by the assessee. The Hon'ble Supreme Court in the case of Collector, Land Acquisition & Another vs. MST. Katihi & Others (supra) has laid down certain principles for taking the liberal approach while construing the ‘sufficient cause’ and condonation of delay as under: “1. Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period," 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

27 ITA.Nos.395 to 398/Hyd./2026 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.” 6.4. Thus, the Hon'ble Supreme Court has observed that justice-oriented approach has to be taken for construing the ‘sufficient cause’ for delay while considering the condonation of delay. If the litigant is not found to be guilty of malafides or culpable negligence then, a pragmatic approach should be taken for cause of substantial justice. Accordingly, in the facts and circumstances of the case, when the Assessing Officer has assessed the entire deposits in the bank account ignoring the debit side of the bank account showing that the funds were used/transferred for purchase

28 ITA.Nos.395 to 398/Hyd./2026 of cool drinks from HCCBPL then, denial of condonation of delay will definitely result in gross injustice to the assessee and the assessee would be remediless. Accordingly, following the principle of deciding the matters on merits instead of technicalities, we take a lenient view to condone the delay in filing the appeals before the learned CIT(A) for the assessment years 2015-2016 and 2016-2017 subject to cost of Rs.5000/- in each appeal [Rs. Five Thousand in each appeal in total Rs.10,000/-] to be paid to the ITAT Tax Bar Association, Hyderabad within a period of one month from the date of this Order. Since the learned CIT(A) has not decided the quantum appeals on merits but the same were dismissed in limine therefore, the impugned orders of the learned CIT(A) are set aside and the matters in quantum appeals in ITA.Nos.395 and 397/Hyd./2026 are remanded to the record of the learned CIT(A) for fresh adjudication on merits after giving a proper opportunity of hearing to the assessee.

29 ITA.Nos.395 to 398/Hyd./2026 issued by the Assessing Officer u/sec.148 of the Act being barred by limitation as per the provisions of sec.149(1) read with proviso of the Income Tax Act. The learned CIT(A) is directed to consider this issue raised by the assessee as additional grounds while passing the fresh Order. 8. In the result, appeals ITA.Nos.395 and 397/Hyd./ 2026 of the Assessee are allowed for statistical purposes.

ITA.Nos.396 & 398/Hyd./2026 – Ays. 2015-2016 & 2016-2017 – Penalty Appeals:

30 ITA.Nos.395 to 398/Hyd./2026 Appellant company and the character of receipt does not partake the character of Income and therefore the Learned CIT(A)/NFAC erred in levying a penalty of Rs.24,39,456/-u/s.271(1)(c) of the I.T Act, 1961.

To sum up, 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

31 ITA.Nos.395 to 398/Hyd./2026

Order pronounced in the open court on 03.07.2026.

Sd/- Sd/- MANJUNATHA G VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, dated 03rd day of July, 2026 VBP

Copy to:

KUPPIREDDY SRINIVAS REDDY, H.NO. 9-29/3/22, SRILAKSHMI NILAYAM, BANDLAGUDA JAGIR, DON 1 BOSCO NAGAR, S.O. RAJENDRANAGAR,, RANGA REDDY-500086,TELANGANA 2 ITO, WARD-1, NEW TOWN MAHABUBNAGAR, MAHBUBNAGAR-509001, TELANGANA 3 THE Pr. CIT, HYDERABAD 4 THE D.R., ITAT, HYDERABAD B-BENCH, HYDERABAD. 5 GUARD FILE TRUE COPY VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.07.03 ASSISTANT REGISTRAR / RAO 10:59:57 +05'30' I.T.A.T., HYDERABAD