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Facts
The assessee deposited Rs.9.30 lakhs during demonetization but failed to file her Income Tax Return for AY 2017-18. The Assessing Officer made an ex-parte assessment, adding Rs.26.44 lakhs, which the CIT(A) sustained due to the assessee's non-response to notices. The assessee appealed, citing ill-health for non-compliance and claiming the amount included a gold loan, alleging double-counting by the AO.
Held
The Tribunal condoned a 276-day delay in filing the appeal, accepting the assessee's ill-health as a genuine reason for non-compliance. Noting that both assessment and first appeal proceedings were ex-parte, the Tribunal set aside the CIT(A)'s order and remitted the matter to the Assessing Officer for a de novo verification, granting the assessee a fresh opportunity to present her case.
Key Issues
Condonation of delay in filing appeal due to ill-health; validity of ex-parte assessment and addition of unexplained cash deposits and alleged double-counting by tax authorities.
Sections Cited
142(1), 69A, 144, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “SMC” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
For Assessee : CA, Rajnish Pissay For Revenue : Sri Gudimella V P Pavan Kumar, Sr. AR Date of Hearing : 23.12.2025 Date of Pronouncement : 23.12.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the assessee against the order dated 06.06.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.
At the outset, there is a delay of 276 days in filing the present appeal before the Tribunal. The assessee has filed petition seeking for condonation of delay along with affidavit
2 ITA.No.990/Hyd./2025 explaining the reasons for the delay in filing the appeal within the period of limitation. The learned Authorised Representative of the Assessee has submitted that the Order of the learned CIT(A) was received by the assessee on 06.06.2024. He submitted that the assessee was bedridden due to a paralytic attach and, therefore, the present appeal could not be filed before the Tribunal within the period of limitation. The learned Authorised Representative of the Assessee has also filed relevant medical certificates and reports in support of his contention and pleaded for condonation of delay of 276 days in filing the present appeal before the Tribunal.
On the other hand, the learned DR strongly opposed for condonation of delay, however, did not dispute the factual aspect.
We have gone through the affidavit filed by the assessee. We find that, the reasons explained by the assessee in his affidavit seem to be genuine and bonafide by taking note of her ill-health which is evident from the supporting
3 ITA.No.990/Hyd./2025 medical certificates furnished by the assessee. The Hon’ble Supreme Court in the case of Collector, Land Acquisituon vs., MST Katiji [1987] 167 ITR 471 (SC) has laid down certain principles for condoning the delay and directed the lower courts to follow a lenient approach for condoning the delay. Going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra), there is no dispute if an appeal is dismissed on account of technicalities, a meritorious case may be thrown out of judicial review. Therefore, while condoning the delay, the courts must have a liberal approach or lenient approach considering the reasons given by the petitioners or appellants. Therefore, going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra) and considering the submissions of the assessee, we condone the delay of 276 days in filing the appeal before the Tribunal and admit the appeal for adjudication.
Briefly stated facts of the case are that, the assessee is an individual and did not file her return of income for the assessment year 2017-2018 under consideration. As 4 ITA.No.990/Hyd./2025 per the information available with the department, the assessee has deposited a sum of Rs.9,30,000/- during the demonetization period [09.11.2016 to 30.12.2016] in her bank account maintained with Telangana State Co.Op Bank, Himayath Nagar Branch, Hyderabad. The Assessing Officer has issued notice u/sec.142(1) of the Act as well as show cause notice calling the assessee to furnish her reply/ explanation. Since, the assessee did not file her reply along with supporting documentary evidences to substantiate her claim, therefore, the Assessing Officer at his best Judgment assessed the income of the assessee at Rs.26,44,069/- u/sec.69A of the Act vide order dated 29.11.2019 passed u/sec.144 of the Income tax Act, 1961 [in short “the Act”].
Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A) has also issued various notices u/sec.250 of the Act dated 07.01.2021, 12.10.2023, 13.11.2023 and 14.05.2024. Since, there was no response from the assessee to substantiate her claim, the learned CIT(A) has sustained the addition made by the Assessing Officer.
5 ITA.No.990/Hyd./2025 7. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal, challenging the addition made by the Assessing Officer and sustained by the learned CIT(A).
CA, Rajnish Pissay, learned Counsel for the Assessee during the course of hearing invited the attention of the Bench, assessment order passed by the Assessing Officer and submitted that in the computation sheet of the Assessment Order, the Assessing Officer has taken income from other sources at Rs.26,44,069 but the gross total income was adopted at Rs.35,74,069/-. Further, an additional amount of Rs.9,30,000/- which had already formed a part of the total deposits made as stated by the Assessing Officer has been added again to the assessed income, which is an error apparent from the record and leads to double taxation. He submitted that the total of the credits made by the assessee during the assessment year 2017-201 into the SB A/c No. of the assessee xxxx5097 is only Rs.18,19,048/- and not Rs.26,44,069/-as stated by the Assessing Officer in the Assessment Order. In support of this 6 ITA.No.990/Hyd./2025 contention, the learned Authorised Representative of the Assessee has filed copy of SB A/c maintained with Telangana State Co-Op Apex Bank Ltd for the above stated period. The learned Authorised Representative of the Assessee has further submitted that the assessee had availed gold loan on 21.07.2016 vide GL No.787/9683 for a sum of Rs.8,89,000/- which was deposited into the SB A/c of the assessee maintained with Telangana State Co-Op Apex Bank Ltd and forms a part of the total credits of Rs.18,19,048/- made into the SB Account of the assessee. He, therefore submitted that the actual deposits made by the assessee into SB A/c No. of the assessee maintained with Telangana State Co-Op Apex Bank Ltd apart from the gold loan availed by her amounting to only Rs.9,30,048/-. He submitted that the assessment was completed by the Assessing Officer not based on facts available with him. The learned Authorised Representative of the Assessee submitted that due to bad health and the consequent unavoidable circumstances suffered by the assessee which are beyond the control of the assessee, she could not respond to the notices issued by the Assessing
7 ITA.No.990/Hyd./2025 Officer and the learned CIT(A). He, therefore, pleaded that in the interest of justice one more opportunity of hearing may please be provided by remitting the matter to the file of Assessing Officer for de novo verification and examination as the transactions of the assessee are routed through banking channel.
On the other hand, the learned DR submitted that despite various opportunities provided to the assessee, she did not respond to furnish her explanation either at assessment stage or during the course of first appellate proceedings before the learned CIT(A) which is evident from the record. He relied upon the orders of the authorities below.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. We find that, during the course of appellate proceedings before the learned CIT(A), despite issue of notices on several occasions, the assessee has not explained reasons for non-appearance and according to the assessee, due to certain reasons beyond the control of the assessee, she could not file relevant details before the learned CIT(A). We find
8 ITA.No.990/Hyd./2025 that, since, the assessment proceedings before the Assessing Officer is also ex-parte and the assessee did not get any opportunity before the learned CIT(A) to represent her case, in our considered view, the matter needs to be set-aside to the file of Assessing Officer for reconsideration. Thus, we set- aside the order of the learned CIT(A) and restore the issue back to the file of Assessing Officer for reconsideration. The Assessing Officer is directed to reconsider the issue de-novo, after providing one more opportunity of hearing to the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 23.12.2025.