SATYA SRINIVAS AKELLA,HYDERABAD vs. ADIT(INT TAXN)-1, HYDERABAD

Succinctly stated, the AO observed that the assessee, a Non- Resident Indian (individual), had, during the subject year, carried out a purchase of shares of Sai Ganga Panakeia Pvt Ltd., of Rs.34,99,823/-, but had not filed his return of income for the year under consideration, i.e., AY 2019-20, initiated proceedings under section 147 of the Act. An order under section 148A(d) of the Act, dated 31/03/2023, was passed by the AO. Thereafter, notice under section 148 of the Act, dated 31/03/2023, was issued and served upon the assessee. However, the 3

Thereafter, the AO issued notices under section 142(1) of the Act, dated 25/10/2023 and 25/01/2024, wherein the assessee was called upon to submit the data and documents relevant to the assessment proceedings. As the assessee failed to come forth with any reply, the AO, vide his order dated 24/05/2024, passed under section 147 r.w.s 144 of the Act, held the investments made by the assessee towards the purchase of shares of Rs.34.99 lakhs (approx.) as unexplained investments under section 69 of the Act.

Aggrieved, the assessee carried the matter in appeal before the CIT(A).

As the assessee had delayed the filing of the appeal before the CIT(A) by 433 days, he had filed an application seeking condonation of the same. However, the CIT(A) did not accept the assessee's explanation, declined to condone the delay, and 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, as well as considered the judicial pronouncement

Shri Kranthi Palivela, CA, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal submitted that the CIT(A) had grossly erred in law and facts of the case in not appreciating the explanation of the assessee regarding the reasons leading to the delay in filing of the appeal before him and had most arbitrarily declined to condone the same. Elaborating on his contention, the Ld. AR submitted that the assessee, who is a Non- Resident Indian (NRI) residing in the USA, had no taxable income in India during the subject year and, thus, remained under a bona fide belief that no obligation was cast upon him to file his return of income in India. The Ld. AR submitted that the assessee, during the subject year, had made an investment in an Indian company, viz., Sai Ganga Panakeia Pvt. Ltd., through his lawfully earned funds in the USA, which he transferred via a banking channel from his US bank account.

Coming to the reasons leading to the delay in filing of the appeal before the CIT(A), the Ld. AR submitted that as the income tax credentials of the assessee were originally set up by a third party Chartered Accountant who had provided his own email address for registration, therefore, the assessee had remained unaware of the notices which were issued by the AO in the course of the assessment

Elaborating further on his contention, the Ld. AR submitted that it was only when the assessee updated his credentials that he received a tax demand notice on 14/07/2025 through email, which disclosed the details about the assessment framed in his case vide the order passed under section 147 r.w.s 144 of the Act, dated 24/05/2024. The Ld. AR submitted that the assessee, on learning about the ex parte assessment order passed in his case, had thereafter, involving no further loss of time, taken necessary steps and filed the appeal with the CIT(A), wherein he had also reiterated the bonafide reasons leading to the delay in filing of the appeal of more than a year since the framing of the assessment. The Ld. AR submitted that as the delay in filing of the appeal before the CIT(A) had crept in for the bona fide reason that the assessee, a Non-Resident Indian (NRI), holding a US Green Card and settled abroad had learnt about the same only on updating his income tax credentials on 20/04/2025 pursuant whereto he was in receipt of an SMS verification on 15/07/2025 and email on 14/07/2025, there was a reason for condoning the said delay. The Ld. AR submitted that on necessary verification it was gathered that the assessment order passed by the AO under section 147 r.w.s 144 of the Act, dated 24/05/2024 was earlier forwarded to the email of the third party Chartered Accountant, which was linked to his profile, as a result whereof he had both

Per contra, Ms. Uppaluri Meena, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”) relied upon the orders of the authorities below. It was submitted that, as there was an inordinate delay in filing the appeal by the assessee appellant, the CIT(A) had rightly declined to condone the same and dismissed the appeal in limine.

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below.

As observed herein above, the assessee is a Non-Resident Indian settled in the USA. At the threshold, we may herein observe that as the assessee remained under a bona fide belief that, as he had no income chargeable to tax in India, no obligation was cast upon him to file his return of income. It is the claim of the assessee that he made an 7

We find substance in the Ld. AR’s contention that as there were bona fide reason leading to the delay in filing of the appeal before the CIT(A), which, in our view, could not have been summarily discarded by attributing the same to any lackadaisical approach or a purposive inaction on the part of the assessee, the same in all fairness and interest of justice ought to have been condoned by the CIT(A) by adopting a liberal approach. As observed herein above, the claim of the assessee that he had remained unaware about the framing of the assessment in his case by an ex-parte order under section 147 r.w.s 144 of the Act, dated 24/05/2024 for the reason that the said assessment order and the notices issued prior thereto were forwarded at the email Id of a third party Chartered Accountant which had inadvertently remained linked to his profile, as a result whereof he could neither participate in the assessment proceedings nor file the appeal with the CIT(A) within the prescribed time period carries substance and ought not to have been summarily rejected.

We, thus, are of firm conviction that the CIT(A) should have, in the totality of the facts of the case, condoned the delay involved in the filing of the appeal instead of summarily dismissing the appeal on the ground

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

The Principal Commissioner of Income Tax, Hyderabad.

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

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