MANCHALA SATYANARAYANA NAIDU,HYDERABAD vs. ITO, WARD- 9(1), HYDERABAD

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ITA 175/HYD/2026Status: DisposedITAT Hyderabad27 August 2026AY 2017-187 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay due to the assessee's bona fide reasons and ignorance of tax proceedings. The issue regarding the rate of tax under Section 115BBE for AY 2017-18 was decided in favor of the assessee, following High Court judgments.

What were the facts?

The assessee, a 75-year-old agriculturist unfamiliar with tax procedures, filed an appeal with a significant delay. The Assessing Officer made an addition under Section 69A, and the CIT(A) dismissed the appeal ex-parte.

What were the issues?

Whether the delay in filing the appeal should be condoned, and whether the higher tax rate under Section 115BBE was applicable for AY 2017-18.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE,Section 250(6)

AI-generated summary — verify with the full judgment below

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

Before: Shri Ravish Sood

Hearing: 27/08/2026

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� सम� | Before Shri Ravish Sood, Judicial Member आ.अपी.सं /ITA No. 175/Hyd/2026 (िनधा�रण वष�/Assessment Year: 2017-18) Shri Manchala Vs. Income Tax Officer Satyanarayana Naidu, Ward-9(1) Hyderabad Hyderabad PAN: AARPM1246M (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: Shri S.K. Gupta, Advocate राज� व �ारा/Revenue by: Shri B Laxmi Kanth, Sr. AR सुनवाई की तारीख/Date of hearing: 27/08/2026 घोषणा की तारीख/Pronouncement: 27/08/2026 आदेश/ORDER The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 08.06.2024 which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 144 of the Income Tax Act, 1961 (“the Act”) fort the A.Y 2017- 18. 2. The assessee has assailed the impugned order on the following grounds of appeal: “1. In the facts and circumstances of the case, the order of the CIT(A) is not sustainable on facts or in law. 2. In the facts and circumstances of the case, the Ld. CIT(A) erred in dismissing the appeal ex-parte for non- prosecution, without adjudicating the grounds of

appeal on merits, which is contrary to the provisions of section 250(6) of the Income-tax Act, 1961. 3. In the facts and circumstances of the case, the Ld. CIT(A) erred in treating the cash deposits of Rs. 11,86,500/- as unexplained money u/s 69A, without properly appreciating the fact that the assessee had sources for explaining the cash deposits. 4. The appellant may be permitted to add, delete, and amend any ground with leave of the Honourable Tribunal.” The assessee has also raised an additional ground which reads as under: “Whether on the facts and in the circumstances of the case, the revenue is empowered to impose 60% tax under section 115BBE of the Act for transactions before 1.4.2017, especially for transactions that took place before demonetization?”.

As the assessee-appellant has sought my indulgence to adjudicate a legal issue that does not require looking any further beyond the facts available on record, I have no hesitation in admitting the same. My aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd vs. CIT, reported in (1998) 229 ITR 383 (SC.

3.

Shri S.K. Gupta, Learned A.R for the assessee at the threshold of the hearing, submitted that the present appeal involves a delay of 511 days. The Ld. AR submitted that, though the period of delay is admittedly inordinate, the reasons for the delay justify its condonation. Elaborating on his contention, the Ld. AR submitted that the assessee is a septuagenarian, a 75-year-old agriculturist not familiar with the use of computers and email, and that it is for the first time he has been subjected to income tax. The Ld. AR, to buttress his contention, has drawn my attention to the “affidavit” filed

by the assessee dated 05.06.2026 wherein the aforesaid factual position has been deposed. The assessee-appellant in the above-mentioned “affidavit” has deposed that he is not conversant with the use of computers and emails and thus remained oblivious about the income tax proceedings initiated in his case. He further stated that he had only learned of the same when the Department initiated recovery proceedings against him. The Ld. AR submitted that as the delay in filing the appeal had crept in for bona fide reasons and not on account of any lackadaisical approach of the assessee appellant, the same, in all fairness and in the interest of justice, be condoned.

4.

Per contra, the Learned Departmental Representative (“Ld. DR”) submitted that the inordinate delay in filing of the appeal should not be condoned.

5.

We have given thoughtful consideration to the arguments put forth by both the Ld. ARs regarding the reasons leading to the delay in filing the present appeal.

6.

We find that the assessee had not only delayed the filing of the present appeal but had also been subjected to an ex- parte assessment order under section 144 of the Act dated 24.12.2019. Apart from that, the appeal filed by the assessee before the Ld. CIT (A) has also been dismissed for non- prosecution. Although the aforementioned facts at first blush do not inspire any confidence regarding the claim of the Ld. AR that the delay in filing the present appeal has crept in for bonafide reasons, and, the same, prima facie, reveals a consistent lackadaisical approach adopted by the assessee

regarding his income-tax proceedings, but on a cumulative perusal of the reasons leading to the delay in filing the appeal before the Tribunal i.e. the assessee being a septuagenarian and 75 years old agriculturist by profession, an illiterate person, and had for the very first time as stated by the Ld. AR has been subjected to income tax proceedings and was therefore absolutely oblivious to the tax proceedings and not conversant with modern electronic procedures; as a result, the notices issued by the Department went unattended. Although I am of the firm conviction that inordinate delay in filing an appeal should not be liberally looked into, but considering the totality of the facts and circumstances involved in the case of the present assessee, I am of the view that, as the same had crept in for bona fide reasons, the same thus merits to be condoned. My aforesaid view is supported by the recent judgment of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. CIT (174 taxmann.com 21), wherein the Hon'ble Supreme Court held that a justice-oriented and liberal approach should be adopted while considering an application for condonation of delay filed by an appellant. Respectfully following the said principle, I condone the delay in filing the present appeal before the Tribunal.

7.

Coming to the merits of the case, the Ld. AR submitted that, as per instructions, he seeks not to press the original grounds of appeal, i.e., ground nos. 1 to 4, and shall confine his contentions only regarding the “additional ground of appeal” wherein the rate of tax of 60% charged upon the assessee for quantifying his tax liability for the Assessment Year 2017-18 by triggering the provisions of section 115BBE

of the Act, has been challenged. I, thus, in terms of the aforesaid concession of the Ld. AR dismiss the “Grounds of appeal Nos. 1 to 4” as not pressed.

8.

Elaborating on his contention, the Ld. AR submitted that the aforesaid issue as of date, i.e., tax liability on the deemed income of an assessee as per Section 115BBE for the Assessment Year 2071-18 is no more res integra and is covered by the judgment of the Hon'ble High Court of Rajasthan in the case of Deepak Maratha Vs. Union of India, Writ Petition No.3625 of 2020, dated 27th May, 2026.

9.

Apart from that, the Ld. AR has relied upon the judgment of the Hon'ble Madras High Court in the case of S.M.I.L.E Microfinance Ltd Vs. Assistant Commissioner of Income Tax (2025) 479 ITR 172(Mad), which had been followed by the Hon'ble High Court of Rajasthan in the case of Deepak Maratha Vs. Union of India (Supra). The Ld. AR based on his aforesaid contention submitted that the addition of Rs.11,86,500/- made by the A.O by treating the cash deposits made in the assessee’s bank accounts held with Corporation Bank and A.P Mahesh Cooperative Urban Bank Ltd. by treating the same as having been sourced out of the assessee’s unexplained income made under section 69A of the Act be subjected to tax under Section 115BBE of the Act as was applicable during the subject year, i.e., as per the normal rate of 30%.

10.

Per contra, the Ld. DR relied upon the orders of the authorities below.

11.

I have given thoughtful consideration to the facts, and find that the solitary issue involved in the present appeal, i.e., the quantification of the tax liability under Section 115BBE of the Act with respect to the addition made by the A.O under Section 69A of the Act for AY 2017-18, is covered by the judgment of the Hon'ble High Court of Rajasthan in the case of Deepak Maratha Vs. Union of India (Supra), wherein the Hon'ble High Court, in its order, had concluded at Para No.17, as under:

“17. SUMMARY/CONCLUSION As an upshot of the discussion and analysis, as above, in our opinion, the Correct Legal Position which emerges is summarized as below:- (i) The law applicable to an assessment year is the law in force on the first day of that year -- i.e., 01st April. A provision coming into force after that date, without express retrospective language, cannot be applied to assessments for that year. (ii) Changes in law occurring after the commencement of a financial year cannot govern the tax liability for that year unless the amendment is expressly made retrospective. (iii) The amendment to Section 115BBE came into force on 01.04.2017 i.e. the first day of financial year 2017-18. For FY 2016-17, the law in force on 01.04.2016, prescribing a rate of 30%, must govern. The enhanced rate of tax @60% came into force on 01.04.2017 and can apply only from that date, i.e. for financial year 2017-18 onwards. (iv) The Taxation Laws (Second Amendment) Act, 2016 contains no express language for it's retrospective effect of section 115BBE.” (emphasis supplied by me)

I, thus, respectfully follow the aforesaid judgment, and, to the said extent, set aside the order of the Ld. CIT (A) and direct the A.O to rework out the tax liability of the assessee in terms of the aforesaid observations.

12.

In the result, the appeal of the assessee is partly allowed in terms of the aforesaid observations.

Order pronounced in the Open Court on the conclusion of hearing, i.e., on 27th August, 2026. Sd/- (RAVISH SOOD) JUDICIAL MEMBER

*Hyderabad, dated 27th August, 2026. Copy to: S.No Addresses 1 Shri Manchala Satyanarayana Naidu, Plot No.76, Dwarakamai Nagar, Autonagar, Vanasthalipuram, Ranga Reddy 500070 2 Income Tax Officer Ward-9(1) IT Towers, AC Guards, Masab Tank, Hyderabad 500004 3 Pr. CIT, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order

TIRUPATI YAMINI Digitally signed by TIRUPATI YAMINI NAGA MALLESWARI NAGA Date: 2026.08.28 10:41:39 MALLESWARI +05'30'

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