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., for a consideration 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

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 r.w.s 115BBE of the Act. Also, the AO observed that since the assessee had under reported the income for the year under consideration, penalty proceedings were initiated and a notice under section 274 r.w.s 270A of the Act, dated 24/05/2024 was issued to the assessee. As there was no compliance from the assessee to the said notice, the AO issued a “Show Cause Notice” (SCN) under section 274 r.w.s 270A of the Act, dated 07/02/2025, that was duly served upon the assessee. Thereafter, the AO, vide his letter dated 03/03/2025, called upon the assessee to show cause as to why the penalty under section 270A of the Act should not be levied in his case, on the ground of under-reporting of income. However, as there was no reply from the assessee to the said SCN, the AO levied a penalty of 4 Rs.13,64,931/- on account of under-reporting of income of Rs. 34.99 lakhs and passed an order under section 270A of the Act, dated 19/03/2025. 4. 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 144 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 Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions.

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 reason leading to the delay in filing of the appeal before him and had 5 Satya Srinivas Akella vs. ADIT (Int. Taxn) most arbitrarily declined to condone the same. Elaborating further on his contention, the Ld. AR submitted that as the delay in filing the appeal before the CIT(A) had crept in for bona fide reason that the assessee, a Non-Resident Indian (NRI), holding a US Green Card and settled abroad had learnt about the passing of the assessment order as well as penalty order only while updating his income tax credentials on 20/04/2025, pursuant whereto he was in receipt of an SMS verification on 15/07/2025 and an email on 14/07/2025, thus, there was a justifiable reason explaining the delay which the CIT(A) in all fairness and interest of justice ought to haven condoned.

The Ld. AR further submitted that the assessee, in his quantum appeal in I.T.A. No.216/Hyd/2026, has assailed before the Tribunal the order of the CIT(A), dated 11/11/2025, wherein the latter had sustained an addition of Rs.34,99,823/- made by the AO, vide his order passed under section 147 r.w.s 144 of the Act, dated 24/05/2024 under section 69 of the Act. Elaborating on his contention, the Ld. AR submitted that the Tribunal, while deciding the quantum appeal, had considered the submissions of the assessee and remitted the matter back to the file of the CIT(A) with a direction to re-adjudicate the same on merits in accordance with law and after affording a reasonable opportunity of being heard to the assessee. Carrying his contention further, the Ld. AR submitted that as the Tribunal had remitted the quantum appeal to the file of the CIT(A) for fresh adjudication, therefore, the present appeal

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 same in limine.

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

We find substance in the Ld. AR’s contention that as there was a 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 company, the same, in all fairness and interest of justice ought to have been condoned by the CIT(A) by adopting a liberal approach. 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 of limitation. Our aforesaid view that a liberal

On merits, we find substance in the Ld. AR’s contention that since the quantum appeal has already been remitted back by the Tribunal, the present appeal, wherein the assessee has assailed the penalty levied under section 270A of the Act, should be remitted back to his file with a direction to decide the same after deciding the quantum appeal. We thus, fin terms of our aforesaid observations are of the view that as the quantum appeal of the assessee in I.T.A. No.216/Hyd/2026 has already been set aside to the file of the CIT(A), the present appeal, is also remitted back to the file of the CIT(A) with a direction to re-adjudicate the same on merits in accordance with law and after affording a reasonable opportunity of being heard to the assessee.

(i) The Principal Commissioner of Income Tax, Hyderabad. (ii) PCIT/CIT (International Taxation), Hyderabad.

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

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