ANITHA AKULA,WARANGAL vs. ITO, WARD-1, WARANGAL

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ITA 2426/HYD/2025Status: DisposedITAT Hyderabad30 April 2026AY 2016-178 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee's medical condition. The CIT(A)'s order was set aside as it did not adjudicate the appeal on merits.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed in limine due to a 35-day delay. The assessee had provided medical records indicating treatment for knee injuries as the cause for the delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned based on medical grounds, and if the CIT(A) erred in not deciding the appeal on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 149,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘SMC’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G

Hearing: 28.04.2026

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER आ.अपी.सं /ITA.No.2426/Hyd/2025 Assessment Year 2016-2017 Anitha Akula, The Income Tax Officer, HANAMKONDA. Ward-1, vs. Warangal – 506 001. WARANGAL – 506 002. Telangana. State of Telangana. PAN AOJPA8283L (Appellant) (Respondent) िनधा�रती �ारा/Assessee by : Sri A Vamseedhar, CA राज� व �ारा/Revenue by : Sri Mookambikeyan S, Sr. AR सुनवाई की तारीख/Date of hearing: 28.04.2026 घोषणा की तारीख/Pronouncement: 30.04.2026 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT :

This appeal by the Assessee is directed against the Order dated 31.10.2025 of the learned CIT(A)-NFAC, Delhi, for the assessment year 2016-2017.

2.

The assessee has raised the following grounds of appeal:

2 ITA.No.2426/Hyd./2025 1. “On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the delay in filing the appeal cannot be condoned, despite sufficient cause mentioned. The appellant prays that the delay be condoned and the appeal be admitted for hearing on merits. 2. That the impugned reassessment order passed u/s 147 r.w.s 144 read with section 144B of the Act, dated 06-03-2024, and as confirmed by the learned CIT(A), NFAC vide order u/s 250 dated 31-10-2025, is bad in law, without jurisdiction, violative of principles of natural justice and deserves to be quashed. 3. The learned AO and learned CIT(A) erred in conducting and upholding reassessment proceedings under sections 148A, 148, and 147 through the jurisdictional AO instead of the mandatory faceless manner under section 151A, Faceless Jurisdiction of Income-tax Authorities Scheme, 2022, and e-Assessment of Income Escaping Assessment Scheme, 2022 (Notification No.18/2022 dated 29.03.2022), rendering the proceedings void ab initio as held in Kankanala Ravindra Reddy v. ITO 156 taxmann.com 178 (Telangana HC) and Tecumseh Products India P. Ltd. v. DCIT 174 taxmann.com 1203 (Telangana HC). 4. The learned AO and learned CIT(A) failed to follow section 144B procedure for faceless assessment despite the appellant's detailed replies to notices under sections 142(1) and show cause notice, violating principles of natural justice and statutory safeguards introduced by Finance Act, 2021. 5. The reassessment notice under section 148 dated 29.03.2023, issued beyond three years from the end of AY 2016-17 (31.03.2017), is time-barred under section 149(1)(a), as the extended ten-year period under section 149(1)(b) does not apply where alleged escaped income of Rs.6,13,090/- falls below the

3 ITA.No.2426/Hyd./2025 Rs.50 lakh threshold, rendering proceedings wholly without jurisdiction. 6. The learned AO and learned CIT(A) erred in equating gross cash deposits of Rs.76,63,630/- with escaped income of Rs.50 lakhs under section 149(1)(b) without tangible material quantifying actual income escapement, contrary to CBDT Instruction No.01/2022, Explanation 1 to section 148, and para 6 thereof requiring independent verification beyond RMS-flagged information. 7. The order under section 148A(d) erroneously stated escapement to the extent of Rs.76,63,630/- without evidence of Rs.50 lakh income escapement at the issuance stage, which the learned CIT(A) wrongly endorsed, violating section 149(1)(b) and Supreme Court in Union of India v. Ashish Agarwal 138 taxmann.com 642. 8. The learned AO erred in initiating proceedings under section 148A(b) and issuing notice under section 148 dated 29.03.2023 without fulfilling mandatory preconditions under sections 147, 148, 148A, and 149, making the reassessment void ab initio and liable to be quashed. 9. On facts and in law, the learned CIT(A) erred in not deciding the appeal on merits and upholding the section 148A(d) order dated 29.03.2023 (DIN:ITBA/AST/F/148A/2022-23/1051580022(1)) and section 148 notice dated 29.03.2023 (DIN: ITBA/AST/S/ 148_1/2022-23/1051623200(1)) for AY 2016-17, which failed to comply with sections 147-149 procedures and limitations. 10. The learned AO and learned CIT(A) erred in applying section 44AD(6)(iii) 8% rate on Rs.76,63,630/- deposits as business turnover, ignoring exclusion for commission/agency business where appellant's spouse acted as agent for M/s Tirumala Milk Products Pvt. Ltd., with actual commission at Rs.60,966 below exemption limit.

4 ITA.No.2426/Hyd./2025 11. The learned AO and learned CIT(A) rejected uncontroverted evidence including bank statements, agency letter, and principal's ledger showing deposits as pass-through collections remitted to principal, treating homemaker appellant as independent business owner without basis, leading to arbitrary addition of Rs.6,13,090/- 12. The appellant craves leave to add, amend, modify or withdraw any ground(s) of appeal at any stage of the appellate proceedings.”

3.

At the outset, the learned Authorised Representative of the Assessee has submitted that the learned CIT(A) has dismissed the appeal of the assessee in limine being not maintainable due to barred by limitation. He has pointed out that there was a delay of 35 days in filing the appeal before the learned CIT(A). The assessee has explained the cause of delay in filing the appeal however, the learned CIT(A) has declined to condone the delay and consequently, the appeal of the assessee was dismissed in limine and not adjudicated on merits. The learned Authorised Representative of the Assessee has submitted that the assessee has explained the reasons for delay in filing the appeal before the learned CIT(A) as she was undergoing the treatment of knee injuries and was in immobilization state which was also advised by the Doctor. In support of his

5 ITA.No.2426/Hyd./2025 contention, he has referred to the medical record of undergoing the treatment as well as medical certificate issued by the hospital viz., Sri Rama Hospital Centre for Joint Replacements, Spinal Injuries and Complex Trauma Care which is placed at Page no.181 of the paper book. Thus, the learned Authorised Representative of the Assessee has submitted that the delay of 35 days in filing the appeal before the learned CIT(A) may be condoned.

4.

On the other hand, the learned DR has not seriously opposed to the condonation of delay of 35 days in filing the appeal before the learned CIT(A) in view of the medical condition of the assessee.

5.

Having considered the rival submissions as well as perusal of the relevant record, at the outset, we note that there was a delay of 35 days in filing the appeal before the learned CIT(A). The learned CIT(A) has dismissed the appeal of the assessee as not maintainable and therefore, the same was not adjudicated on merits. The assessee has filed the medical record before us showing that the assessee was undergoing the treatment for her knee injuries as she was

6 ITA.No.2426/Hyd./2025 suffering from knee Desmorhexis of Lat Collateral Ligament Grade-I – II. The medical certificate issued in this regard reads as under:

7 ITA.No.2426/Hyd./2025 5.1. Accordingly, in the facts and circumstances of the case and in the interest of justice, we condone the delay of 35 days in filing the appeal before the learned CIT(A).

5.2. Since the learned CIT(A) has not adjudicated the appeal of the assessee on merits, therefore, the impugned order of the learned CIT(A) is set aside, and the matter is remanded to the record of the learned CIT(A) for adjudication of the appeal of the assessee on merits. Needless to say, the assessee be given an appropriate opportunity of hearing before passing the fresh order.

6.

In the result, appeal of the Assessee is allowed for statistical purposes.

Order pronounced in the open Court on 30.04.2026.

Sd/- Sd/- [MANGUNATHA G.] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT

Hyderabad, Dated 30th April, 2026

VBP

8 ITA.No.2426/Hyd./2025

Copy to: Anitha Akula, #7-1-297, Akulawada, New Bus 1. Stand Road, HANAMKONDA. Warangal–506 001. Telangana. The Income Tax Officer, Ward-1, Aayakar Bhavan, 2. BSNL Office, WARANGAL – 506 002. Telangana. 3. The Pr. CIT, Hyderabad. 4. The DR, ITAT, “SMC” Bench, Hyderabad. 5. Guard file.

BY ORDER VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.04.30 RAO 12:05:55 +05'30'

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