RASALA KIRAN KUMAR,HYDERABAD vs. ITO, WARD-10(1), HYDERABAD

“The Ld. CIT(A) erred in dismissing the appeal in limine without adjudicating the merits violation of principles of natural justice and statutory mandate.

The AO erred in adopting the stamp duty value of Rs.56,42,000/- as full value of consideration under section 50C without applying the proviso to section 50C(2) read with the registered agreement of sale dated 23/03/2016 fixing consideration at Rs.47,00,000/-.

The AO erred in computing the appellant’s proportionate share of consideration as Rs.14,15,646/- instead of the correct figure of Rs.14,10,500/- by applying an area-based ratio (65.33/260.37) rather than the actual co-ownership ratio (1/4th).

The AO erred in computing the cost of acquisition at Rs.4,25,000/- without including registration charges of Rs.56,457/- (being 1/3rd of Rs.1,69,370/-). Resulting in correct indexation and inflation of LTCG.”

Succinctly stated, the AO based on information that the assessee had during the subject year sold immovable property for a consideration of Rs.56,42,000/- but had not filed his return of income for the year under consideration, initiated proceedings under section 147 of the Act. 29/03/2022 wherein the assessee was called upon to explain as to why a notice under section 148 of the Act be not issued to him. However, the assessee failed to furnish his reply to the aforesaid notice. Accordingly, the AO passed an order under section 148A(d) of the Act, dated 26/04/2022. Notice under section 148 of the Act, dated 26/04/2022 was issued and duly served upon the assessee. However, the assessee failed to file his return of income in response to the aforesaid notice.

During the course of the assessment proceedings, the AO observed that the assessee had in the subject year sold an immovable property (Dwelling House) jointly admeasuring 260.37 sq mts, dated 06/04/2017 a/w three other persons, viz., (i) Sri Rasala Venu Gopal Yadav; (ii) Sri Rasala Kishore Kumar; and (iii) Sri Vimmadisetty Jagdish Kumar for a consideration of Rs.46,80,000/-, as against the stamp value of Rs.56,42,000/- determined by the SRO. It was observed that the assessee a/w two other persons had sold their share admeasuring 196 sq mts and the remaining co-owner sold his share admeasuring 64.37 sq mts out of the total area of 260.37 sq mts. As the shares of the aforementioned sellers was not mentioned in the sale deed, therefore, the AO worked out the share of the assessee proportionately on the basis of the area of the property at 65.33 sq mts (out of 196 sq mts) against which his share of sale consideration worked out to Rs.14,15,646/-. The AO observed that Kiran Kumar Rasala vs. ITO the subject property admeasuring 196 sq mts was purchased by Sri Rasala Venu Gopal Yadav, Sri Rasala Kishore Kumar and Shri Kiran Kumar Rasala (the assessee himself) on 11/07/2007 for a consideration of Rs.12,75,000/-. Accordingly, the AO worked out the cost of acquisition falling to the share of the assessee at Rs.8,96,124/-. The AO based on his aforesaid deliberations worked out the long-term capital gains (LTCG) on the transfer of the subject property in the hands of the assessee at Rs.5,19,522/-.

Thereafter, the AO vide his order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 28/12/2023 after making the aforementioned addition determined the income of the assessee at Rs.5,19,522/-.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, as the assessee had delayed the filing of the appeal by 206 days, therefore, he had a/w the appeal filed a petition seeking condonation of the delay supporting with his affidavit. However, the CIT(A) did not find favour with the assessee’s explanation and declined to condone the delay. Accordingly, the CIT(A) dismissed the appeal in limine.

The Ld. AR at the threshold of hearing of the appeal, submitted that though the assessee had diligently provided all the requisite information, i.e., the notices received in the course of the assessment proceedings as well as the assessment order, dated 28/12/2023 to his Chartered Accountant and reposed full faith that he would take necessary steps and file the appeal assailing the impugned assessment order within the stipulated time period, but to his surprise and disappointment, a subsequent consultation with another Chartered Accountant revealed that no appeal was filed against the impugned assessment order. The Ld. AR submitted that the assessee on learning about the aforesaid failure of his Chartered Accountant in filing the appeal with the CIT(A), therein involving no further loss of time engaged a new tax professional and filed the appeal, which by the time involved a delay of 206 days. Elaborating further, the Ld. AR submitted that as the delay in filing of the appeal was due to genuine and bona fide reasons and not on account of any lackadaisical approach or negligence on the part of the assessee, Kiran Kumar Rasala vs. ITO therefore, the same in all fairness and in interest of justice ought to have been condoned by the CIT(A). The Ld. AR to buttress his aforesaid factual contentions had drawn our attention to the condonation petition supported by an affidavit of the assessee as was filed before the CIT(A), which has been culled out by the latter in his order at Page 6-7. The Ld. AR to buttress his contention that now when the delay in filing the appeal before the CIT(A) had occasioned for bona fide reasons, therefore, he ought to have been taken a liberal and justice-oriented approach instead of summarily dismissing the appeal had relied upon certain judicial pronouncements.

Per contra, Shri B Laxmi Kanth, Learned Senior Departmental Representative (for short, “Sr-DR”) vehemently objected to the contentions advanced by the Ld. AR. It was submitted that as the assessee had not only delayed the filing of the appeal before the CIT(A) but had achequered history wherein he had neither voluntarily filed his return of income nor in response to the notice issued under section 148 of the Act, dated 26/04/2022, but had also suffered an ex-parte order under section 144 of the Act, which reveals the lackadaisical approach that was consistently adopted by him regarding his income tax matter. Apart from that, it was submitted that as the assessee had explained the delay in filing of the appeal before the CIT(A) based on an unsubstantiated explanation Also, we find that it has been the assessee’s claim that he had handed over the assessment order passed by the AO, dated 28/12/2023 well within the stipulated time period to his Chartered Accountant and remained under a bona fide belief that he would take necessary steps and file the appeal within the stipulated time period, but it came as a matter of utter surprise and disappointment when he subsequently learned that the Kiran Kumar Rasala vs. ITO appeal was not filed. As observed herein above, the assessee claims that the moment he learnt about the failure on the part of his tax consultant in filing the appeal before the CIT(A), he had involving no further loss of time filed the same by availing the services of another tax consultant, which by the time involved a delay of 206 days.

We find that the assessee had supported his aforesaid claim regarding the reasons leading to the delay in filing the appeal by filing an affidavit before the CIT(A). In our view, considering the totality of the facts, the CIT(A) ought to have taken cognizance of the material aspect that the delay in filing the appeal had crept in because of the failure on the part of a tax consultant, while for the assessee remained under a bona fide belief that the appeal had been filed within the prescribed time period. Although, we cannot remain oblivion of the fact that the assessee appellant ought to have remained vigilant and cross verified the factual position instead of drawing support from certain assumptions regarding the timely filing of the appeal, but at the same time are of the view that in the totality of the facts leading to the delay, the CIT(A) ought to have adopted a liberal and justice oriented approach and condoned the delay instead of summarily dismissing the appeal on the ground of limitation. Our aforesaid view is fortified by the recent decision of the Hon'ble Supreme (SC). The Hon'ble Apex Court, while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income Tax Appellate Tribunal, Raipur Bench, had observed that a justice-oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay involved in filing the appeal.

We thus, in terms of our aforesaid observations, set aside the order passed by the CIT(A) and direct him to condone the delay involved in the appeal filed before him and dispose of the same considering the specific grounds of appeal based on which the assessee has assailed the impugned order of assessment before him.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. AY: 2018-19

We shall now take up the aforementioned appeal filed by the assessee in ITA No.1465/Hyd/2026, which in turn arises from the order passed by the CIT(A), dated 11/03/2026, wherein he has upheld the penalty imposed by the Joint Commissioner of Income Tax, NFAC, Delhi under section 271D of the Act. Delhi had dismissed the appeal filed by the assessee by declining to condone the delay of 29 days involved in the appeal filed before him. It was submitted that as in the quantum appeal, the aforesaid delay in filing of the appeal before the CIT(A) was attributable to the negligence on the part of the assessee’s erstwhile tax consultant, while for the assessee had remained under a bona fide belief that the appeal had been filed within the stipulated time period.

We have given thoughtful consideration and are of the view that as the reason leading to the delay in filing of the present appeal remains the same as was there before us in the quantum appeal of the assessee in ITA No.1464/Hyd/2026, which had been set aside by us to the file of the CIT(A) with a direction to condone the delay and decide the appeal on merits, therefore, we on the same terms set aside the present appeal to the file of the CIT(A) with a direction to condone the delay and dispose of the appeal qua the specific grounds based on which the impugned order of penalty under section 271D of the Act has been assailed before him.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. S d /- (मधुसूदन साव"डया) (रवीश सूद) (MADHUSUDAN SAWDIA) (RAVISH SOOD) लेखासद"य/ACCOUNTANT MEMBER "या"यकसद"य/JUDICIAL MEMBER d/- Hyderabad, dated: 09/09/2026. OKK/sps आदेशक"""त"ल"पअ"े"षत/ Copy of the order forwarded to:-

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण /DR,ITAT, Hyderabad.

The Commissioner of Income Tax 6. गाड"फ़ाईल / Guard file