SAMPATHRAO S YERAVELLI,HYDERABAD vs. DCIT, CIRCLE -12(1), HYDERABAD

Succinctly stated, the AO, based on information that the assessee during the subject year had carried out substantial financial transactions, initiated proceedings under section 147 of the Act. The AO issued notice under section 148A(b) of the Act, dated 14/02/2024, which, however, was not complied with by the assessee. Notice under section 148 of the Act, dated 05/03/2024, was issued to the assessee. In response, the assessee filed his return of income on 09/03/2024, declaring an income of Rs.41,59,840/-.

Thereafter, the AO vide his order passed under section 147 r.w.s 144B of the Act, dated 31/01/2025 determined the income of the assessee at Rs.48,21,840/- after disallowing his claim for deduction/exemption aggregating to Rs.6,62,000/- , viz., (i) disallowance of the assessee’s claim of exemption under section 10(13A) of the Act: Rs.5,00,000/-; and (ii) disallowance of assessee’s claim of deduction under section 24(b) of the Act: Rs.1,62,000/-.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) observed that though the appeal filed by the assessee on 24/04/2025 before him involved a delay of 49 days, the assessee had neither acknowledged the delay in filing the appeal in “Form-35” nor filed any application seeking condonation of the same along with the appeal. Accordingly, the CIT(A), based on his aforesaid observations, dismissed the appeal in limine.

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

We have heard the Learned Authorized Representatives of both parties, perused the orders of the authorities below and the material available on record.

Shri ASRSS Siva Prasad, CA, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, fairly submitted that though the appeal filed before the CIT(A) involved a delay of 49 days, but inadvertently due to a clerical mistake the assessee appellant had failed to acknowledge the delay in Column No.14 of “Form-35”. Elaborating on his contention, the Ld. AR submitted that the assessee, under the misconception that the appeal was filed within the stipulated time period, failed to file an application seeking condonation of delay. It was submitted that the matter, in all fairness, be set aside to the file of the CIT(A) with liberty to the assessee to file an application explaining the reason leading to the delay in filing of the appeal before him.

Per contra, Shri Laxmi Kanth, Learned Senior Departmental Representative (for short, “Ld. Sr. DR”) submitted that as the assessee had failed to acknowledge the delay of 49 days involved in filing of the appeal, the CIT(A) had rightly dismissed the same in limine.

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties.

Admittedly, it is a matter of fact borne from the record that the appeal filed by the assessee before the CIT(A) ought to have been filed on or before 02/03/2025, i.e., within a period of 30 days of receipt of the order. However, as the appeal was filed on 21/04/2025, it involved a delay of 49 days.

We have given thoughtful consideration and find substance in the Ld. AR’s contention that though the appeal involved a delay of 49 days, but inadvertently the assessee appellant on account of a bona fide mistake had failed to acknowledge the delay in Column No. 14 of “Form-35”, as a result whereof no application explaining the reasons leading to the said delay and seeking condonation of the same was filed before the CIT(A).

In our view, considering the aforesaid facts, the matter in all fairness and in the interest of justice merits to be restored to the file of the CIT(A) with a liberty to the assessee to file an application explaining the delay of 49 days involved in the appeal filed before the first appellate authority. The CIT(A) is directed to consider the explanation of the assessee appellant regarding the reasons leading to the delay based on an application, if any, filed before him in the course of the set aside proceedings in light of the discretion vested with him under section 249(3) of the Act.

Before parting, we may herein observe that we have simpliciter set aside the matter to the file of the CIT(A) for affording liberty to the assessee to file an application explaining the reasons to the delay in filing of the appeal before him, but in no way have expressed any view regarding the reasons leading to the said delay, which the CIT(A) shall remain at liberty to look into in exercise of the powers vested with him under section 249(3) of the Act.

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