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Facts
The assessee (HUF) declared agricultural income of Rs. 50,00,000 for AY 2020-21 but claimed it was a clerical error, with the actual income being Rs. 5,00,000. The AO made an addition of Rs. 45,00,000 under Section 69A due to the assessee's failure to furnish supporting documents, which the CIT(A) upheld. The appeal to the Tribunal was filed with a 144-day delay due to the Karta's retirement and inability to access official communications.
Held
The Tribunal condoned the 144-day delay, finding sufficient cause. On merits, noting the assessee's non-compliance and non-furnishing of crucial documents to the lower authorities, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO for de novo adjudication with instructions to provide adequate opportunity to the assessee to furnish all relevant evidence.
Key Issues
Condonation of delay in filing appeal; whether an addition made under Section 69A for unexplained agricultural income, purportedly due to a clerical error, should be sustained when supporting documents were not provided.
Sections Cited
69A, 143(3), 144B
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Income Tax Appellate Tribunal, Hyderabad ‘ B SMC ‘ Bench, Hyderabad
Before: Shri Ravish SoodShri Madhusudan Sawdia
(िनधा�रण वष�/Assessment Year: 2020-21) Shri Kaithi Govardhan Vs. Income Tax Officer Reddy ( HUF ) Ward 7 (1) Hyderabad Hyderabad PAN:AAHHK3441C (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri SNSR Chinmai, Advocate राज� व �ारा/Revenue by:: Shri T. Venkanna, Sr. DR सुनवाई की तारीख/Date of hearing: 15/12/2025 घोषणा की तारीख/Pronouncement: 19/12/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.:
This appeal is filed by Shri Kaithi Govardhan Reddy (HUF) (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 23.12.2024 for the A.Y. 2020-21. 2. At the outset, we observe that there is a delay of 144 days in filing the present appeal before this Tribunal. In support of the condonation petition, the Karta of the assessee-HUF (“Karta”)
Page 1 of 8 has filed a copy of affidavit, explaining the reasons for the said delay. In this regard, the Learned Authorised Representative (“Ld. AR”) submitted that the Karta was earlier employed in the Police Department, and accordingly, the email ID furnished in Form No. 35 was the official email ID of the Police Department. It was submitted that upon his retirement from the Police Department the Karta could not receive or access communications sent to the said official email ID and, therefore, remained unaware of the order passed by the Ld. CIT(A). It was further submitted that after retirement, the Karta joined as Chief Vigilance Officer in GVPR Engineers Limited in April 2024, a position which required extensive and frequent official travel, and as a result, he was regularly out of Hyderabad on official duties. In support, the Karta has also submitted the details of his tour programmes from January 2025 to July 2025. The Ld. AR further submitted that it was only on 21.07.2025, when the Karta could meet the counsel, that he became aware of the fact that the Ld. CIT(A) had already passed the appellate order. Immediately thereafter, steps were taken to file the present appeal before this Tribunal without any further delay. The Ld. AR contended that the delay in filing the appeal was neither intentional nor deliberate, and there was no mala fide intention on the part of the Karta. It was submitted that the delay occurred due to bona fide and unavoidable circumstances, and therefore, prayed that the delay may be condoned in the interest of substantial justice and the appeal be admitted for adjudication on merits.
Per contra, the Learned Departmental Representative (“Ld. DR”) did not raise any serious objection to the condonation petition and left the issue to the discretion of the Bench.
We have carefully considered the rival submissions and perused the affidavit filed in support of the condonation petition. We find that the explanation furnished by the Karta is reasonable, plausible and supported by material facts. It is well- settled law that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, particularly when no gross negligence, deliberate inaction or mala fide can be attributed to the appellant. In the present case, the delay of 144 days has been properly explained. We are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. Accordingly, the delay of 144 days in filing the appeal is condoned, and the appeal is admitted for adjudication on merits.
The assessee has raised the following grounds of appeal:
6. The brief facts of the case are that the assessee is a HUF, which filed its return of income for the Assessment Year 2020-21 on 10.03.2021, declaring agricultural income of Rs.50,00,000/-. The case of the assessee was selected for scrutiny to verify the large claim of agricultural income. During the assessment proceedings, the assessee submitted that it had earned agricultural income of only Rs.5,00,000/- during the year under consideration, however, due to a clerical mistake, instead of Rs.5,00,000/-, the figure of Rs.50,00,000/- was mentioned in the return of income. During the assessment proceedings, the Learned Assessing Officer (“Ld. AO”) called for the copy of statement of affairs, capital account and bank statements from the assessee. However, the assessee failed to furnish the said documents. Accordingly, the Ld. AO treated the difference of Rs.45,00,000/- as unexplained and made addition under section 69A of the Income Tax Act, 1961 (“the Act”). The Ld. AO also noted that the assessee had not filed returns for the immediately preceding two assessment years, and further, the assessee had not filed any revised return to support its plea of clerical mistake. The Ld. AO, relying upon the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. v. CIT (284 ITR 323), rejected the claim of the assessee and passed the assessment order under section 143(3) r.w.s. 144B of the Act on 21.09.2022, determining the total income of the assessee at Rs.45 lakhs.
7. Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT(A). However, the assessee failed to comply with the notices issued by the Ld. CIT(A) and Page 4 of 8 consequently, the Ld. CIT(A) dismissed the appeal and confirmed the assessment order.
8. Aggrieved by the order of the Ld. CIT (A), the assessee is in further appeal before this Tribunal. At the outset, the Ld. AR submitted that the only issue involved in the present appeal is that the agricultural income declared at Rs.50,00,000/- in the return of income was a clerical mistake and the actual agricultural income earned during the year was only Rs.5,00,000/-. It was submitted that under the Act, only real income can be brought to tax, and a mere clerical/typographical error cannot be the basis for sustained addition. The Ld. AR invited our attention to the returns of income for earlier assessment years 2014-15, 2015-16 and 2016-17 placed at page nos. 7 to 9 of the paper book and submitted that in those years, the assessee had declared agricultural income of Rs.4,00,000/-, Rs.4,50,000/- and Rs.5,00,000/-, respectively. The Ld. AR further invited our attention to the returns of income for subsequent assessment years 2021-22 and 2022-23 placed at page nos. 12 to 15 of the paper book and submitted that in both the subsequent years also, the assessee has shown agricultural income of Rs.5,00,000/- only. Therefore, the pattern of agricultural income in earlier and subsequent years substantiates the assessee’s contention that the figure of Rs.50,00,000/- was wrongly mentioned instead of Rs.5,00,000/- in the year under consideration. Accordingly, the Ld. AR prayed that the addition may be deleted.
9. Per contra, the Ld. DR submitted that the assessee was non-compliant before the Ld. CIT(A) and even before the Ld. AO, the assessee failed to furnish the statement of affairs, capital Page 5 of 8 account and bank statements, despite specific requisition. Therefore, the claim that agricultural income was only Rs.5,00,000/- could not be verified from contemporaneous records/evidence. The Ld. DR further submitted that the assessee did not file returns of income for the immediately preceding two assessment years and the assessee has not substantiated its claim by filing supporting evidence. Therefore, the assessee’s claim is not liable to be accepted. Accordingly, the Ld. DR supported the orders of the authorities below.
We have heard the rival submissions and perused the material placed on record. At the outset, we find that the assessee has claimed that the agricultural income declared at Rs.50,00,000/- is due to a clerical mistake and the correct agricultural income is only Rs.5,00,000/-. However, it is an admitted position that the assessee failed to file the statement of affairs, capital account and bank statements before the Ld. AO despite specific requisition made during the course of assessment proceedings. This failure on the part of the assessee prevented the Ld. AO from verifying the correctness of the assessee’s claim and also from examining whether there was any corresponding material/evidence to support the contention of clerical mistake. We also find it material to note that the assessee did not file returns of income for the immediately preceding two assessment years. Further, though the assessee has relied upon the returns of earlier years and subsequent years placed in the paper book to contend that it consistently declared agricultural income in the range of Rs.4,00,000/- to Rs.5,00,000/-, it is also crucial to mention that the returns for the succeeding assessment years Page 6 of 8 were filed after the case of the assessee was selected for scrutiny in the year under consideration. In such circumstances and considering the non-furnishing of primary documents before the Ld. AO, we are of the view that the issue requires thorough verification by the Ld. AO from all the relevant contemporaneous documents and evidence. Considering the totality of facts and circumstances of the case, in the interest of justice, we deem it appropriate to set aside the matter to the file of the Ld. AO for de novo adjudication. Accordingly, we set aside the impugned order on this issue and restore the matter to the file of the Ld. AO to decide the issue afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee shall be at liberty to file all relevant evidence/material in support of its claim. The assessee is directed to cooperate in the remand proceedings and not to take unnecessary adjournments.