G K CONSTRUCTIONS.CO,HYDERABAD vs. ITO, WARD-8(1), HYDERABAD
आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘A’ Bench, Hyderabad
BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT
AND SHRI MANJUNATHA G. ACCOUNTANT MEMBER
आ.अपी.सं /ITA No.1608/Hyd/2025
Assessment Year 2017-2018
G K Constructions Co.
Hyderabad – 500 050. Telangana.
Ward-8(1),
Hyderabad.
(Appellant)
(Respondent)
िनधाŊįरतीȪारा /Assessee by: CA C. Maheshwar Reddy
राज̾ वȪारा /Revenue by:
G Saratha, Sr. AR
सुनवाई की तारीख/Date of hearing:
26.11.2025
घोषणा की तारीख/Pronouncement:
19.12.2025
आदेश/ORDER
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the Order dated 17.09.2025 of the learned CIT(A)-National
Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2017-2018. 2
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The assessee has raised the following grounds of appeal : 1. “The order of the Ld. CIT(A) in dismissing the appeal against order u/s 143(3) is not sustainable with regards to the facts as well as in law.
The Ld. CIT(A) ought not to have dismissed the appeal solely rejecting the petition for condonation of delay, as the delay was caused by genuine and Bonafide reasons, which are clearly explained before the Ld. CIT(A).
The Ld. CIT(A) ought to not to have dismissed the appeal, after the Appellant had made detailed submissions citing relevant judicial precedents, and should have considered the submissions of the Appellant.
The Ld. CIT(A) ought to have adjudicated the case of the Appellant on merits without merely dismissing basing on delay in filing of the appeal, which is not sustainable.
The Ld. CIT(A) ought to have observed that the case laws relied upon by the Appellant are genuinely applicable to the Appellant's case and are to be considered by the Ld. CIT(A).
The Ld. CIT(A) ought to have considered that there is no scope for making addition of Rs.2,74,31,960/- towards secured loans as unexplained investment since the Appellant has furnished the information before the Ld. CIT(A) which ought to have been adjudicated.
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The Ld. CIT(A) ought to have observed the fact that the addition of capital contribution of the partners of the firm amounting to Rs.3,20,22,764/-cannot be made in the hands of the Appellant, as such the addition is bad in law.
The Ld. CIT(A) ought to have considered the detailed submissions, wherein the source of capital contribution of each partner was clearly explained, and ought to have observed that there is no reason for the Ld. AO to treat the same as unexplained investment u/s 69. 9. The Ld. CIT(A) ought to have observed that the Appellant has submitted the sources and established the identity of the partner and genuineness of the partners capital contribution, and hence there was no scope for making addition in the hands of the Appellant firm.
The Ld. CIT(A) ought to have observed that the Ld. AO has passed the order without going into the facts and circumstances of the case, and hence the additions are liable to be deleted.
The Ld. CIT(A) ought to have considered the additional evidence filed before him and should have sent to the AO for furnishing remand report, which was not done by the Ld. CIT(A), thereby making the order legally invalid.
The Ld. CIT(A) ought to have observed the fact that the assessment order was passed u/s 143(3) instead of passing order u/s 144 since no submissions were filed before Ld. AO, and accordingly the entire assessment proceedings are invalid.
The Appellant craves to add/leave/alter/modify any other ground of appeal at the time of hearing.”
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At the outset, the learned Authorised Representative of the Assessee has submitted that the appeal of the assessee was dismissed by the learned CIT(A) in limine being barred by limitation. He has submitted that the assessee is a partnership firm, filed it’s return of income for the year under consideration on 17.02.2018 admitting Rs.NIL income as there was no commercial operations during the year. He has referred to the return of income and financial statements placed at Page nos.10-16 of the paper book. The case of the assessee was selected for scrutiny and the Assessing Officer while passing assessment order made addition of Rs.3,20,22,764/- in respect of capital introduced by the partners of the assessee firm. Further, the Assessing Officer has also made an addition of Rs.2,74,31,960/- in respect of secured loan taken by the assessee firm from the Union Bank. He has referred to the balance-sheet of the assessee as on 31.03.2017 to show that the amount of Rs.3,20,22,764/- is shown as capital introduced by the partners. Further, an amount of Rs.2,74,31,960/- was also reported as unsecured loan taken from bank. A copy of the 5 ITA.No.1608/Hyd./2025
bank loan account is also placed at pages17-22 of the paper book. Thus, the learned Authorised Representative of the Assessee has submitted that the additions made by the Assessing Officer on account of capital introduced by the partners as well as unsecured loans taken from the bank is highly arbitrary and unjustified. The learned Authorised
Representative of the Assessee has pointed out that the assessment order dated 25.12.2019 was not communicated to the assessee either through ITBA portal or otherwise.
Therefore, the assessee was not aware about the impugned order of the Assessing Officer whereby unwanted and unwarranted additions were made by the Assessing Officer on account of capital introduced by the partners as well as secured loans taken by the assessee firm from the bank. The Assessing Officer has taken these amounts from the balance- sheet of the assessee and treated the same as unexplained cash credits u/sec.68 of the Act. The learned Authorised
Representative of the Assessee has pointed out that thereafter there was outbreak of Covid-2019 pandemic and, therefore, the assessee could not gather any information
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regarding the impugned assessment order passed by the Assessing Officer until the notice u/sec.188A of the Act dated
28.11.2022 was issued to one of the partners Sri Katikaneni
Hanumantha Rao received on 02.12.2022. The said notice is placed at page-23 of the paper book. After receiving the said notice by the partner, he immediately communicated to the department regarding non-communication of the assessment proceedings vide it’s reply dated 02.12.2022 which is placed at pages 25 and 26 of the synopsis. The learned Authorised
Representative of the Assessee also referred to the application filed on behalf of the assessee dated 07.12.2022 for supply of copy of the assessment order placed at pages-27 and 28 of the synopsis. Thus, the learned Authorised Representative of the Assessee has submitted that prior to the notice issued u/sec.188A of the Act dated 28.11.2022, the assessee was not having the knowledge of the assessment order passed by the Assessing Officer and thereafter, the assessee took immediate steps for obtaining the copy of the assessment order and filed appeal before the learned CIT(A). Thus, the learned Authorised Representative of the Assessee has 7
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submitted that the assessee explained the cause for delay before the learned CIT(A) which is bonafide and beyond the control of the assessee. He has pointed-out that the Covid-
2019 pandemic was also a reason for non-communication of the assessment order to the assessee and, therefore, the learned CIT(A) ought to have condone the delay in filing the appeal. Thus, he has pleaded that the delay in filing the appeal before the learned CIT(A) may be condoned and since the additions were made by the Assessing Officer are highly arbitrary and unjustified and even against the law may be deleted.
1. The learned Authorised Representative of the Assessee has submitted that the additions made by the Assessing Officer are not sustainable as held by the Hon’ble Juri ictional High Court, Hon’ble Supreme Court as well as other High Courts and this Tribunal. The learned Authorised Representative of the Assessee has relied upon various decisions which are as under :
Nova Medicare vs. Income-tax Officer [2023] 150 taxmann.com 363 (Telangana);
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CIT vs. Bharat Engineering & Construction Co. [1972] 83 ITR 187 (SC); 3. CIT, Kanpur vs. Lal Mohar [2017] 88 taxmann.com 260 (Allahabad); 4. Satty and Associates Hyd vs. ACIT CC-1(2), Hyd. [2025] 170 taxmarin.com-432 (Hyderabad-Trib); 5. CIT vs. M. Venkateswara Rao [2015] 57 taxmann.com 373 (Andhra Pradesh and Telangana); 6. CTT-1, Patna vs. Anurag Rice Mills [2017] 88 taxmann.com 420 (Patna); 7. CIT, Rajkot-II v. Odedara Construction [2014] 45 taxmann.com 65 (Gujarat); 8. ACTT vs. Durga Granites [2022] 138 taxmann.com 335 (Hyderabad-Trib.);
2. Thus, the learned Authorised Representative of the Assessee has contended that if the delay in filing the appeal before the learned CIT(A) is not condoned which would amount to gross injustice when the Assessing Officer has assessed the income by making unsustainable and illegal additions. The delay in filing the appeal was neither
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intentional nor deliberate, but, due to the non- communication and knowledge of the assessment order passed by the Assessing Officer. He has relied upon the Judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji [1987] 167
ITR 471 (SC).
On the other hand, the learned DR has vehemently objected to condonation of delay and submitted that there is an abnormal and inordinate delay of 1076 days in filing the appeal before the learned CIT(A) and assessee has failed to explain any ‘reasonable cause’ much less to a ‘sufficient cause’ for such an inordinate delay in filing the appeal. The assessee has taken only an excuse that at the time of registering the Firm, the phone no. of one of the employee of the assessee firm was given and, therefore, the assessee could not receive the notice issued by the Assessing Officer as well as the order passed by the Assessing Officer. Once the assessee has given a particular phone no. and email for communication, then, the Assessing Officer cannot be held liable for non-receipt of notice by the assessee. Therefore, this 10 ITA.No.1608/Hyd./2025
is a case of gross negligence on the part of the assessee for not filing the appeal before the learned CIT(A) within the period of limitation. The learned CIT(A) while considering the condonation of delay has dealt with all the relevant facts as well as the case law on the point and held that the reasons explained by the assessee are not sufficient and, therefore, the learned CIT(A) was not satisfied that the assessee was having any ‘sufficient cause’ for not filing the appeal within the period of limitation or for the inordinate delay. He has relied upon the impugned order of the learned CIT(A).
We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has passed the assessment order on 25.12.2019. Therefore, the limitation for filing the appeal in the ordinary course was up- to 25.01.2019. However, the appeal was filed by the assessee before the learned CIT(A) was on 04.01.2023. It is pertinent to note that at the time of passing the assessment order, there was an advent of Covid-2019 pandemic which ultimately lead to the restrictions on the movement by the Authorities w.e.f. 15.03.2020. By considering all these exceptional, pandemic
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and abnormal conditions, the Hon’ble Supreme Court in the case of suo motu Cognizance for Extension of Limitation reported in [2022] 441 ITR 722 (SC) extended the limit for filing the petitions, appeals etc., up-to 28.02.2022 and thereafter also allowed further 90 days for taking appropriate steps. Thus, up-to 30.05.2022 the limitation was available for filing the suits, petitions, applications, appeals, and all other quasi proceedings etc. The assessee has explained the cause of delay before the learned CIT(A) that the assessee was not aware about the assessment order dated 25.12.2019. The learned Authorised Representative of the Assessee has specifically pointed out that the order was not even uploaded on the ITBA portal and, therefore, the assessee was not having any means to know about the assessment order.
Thus, the assessee has explained the cause of delay as no communication of the notice issued by the Assessing Officer as well as the assessment order. The learned Authorised
Representative of the Assessee has also referred to the notice issued by the Assessing Officer u/sec.188A of the Act dated
28.11.2022 to one of the partners viz., Sri Katikaneni
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Hanumantha Rao which is placed at Page-23 of the synopsis and thereafter, the assessee took steps to obtain a copy of the assessment order and then, filed the appeal before the learned CIT(A) on 14.01.2023. Thus, it is clear that except the notice issued u/sec.188A of the Act dated 28.11.2022, the department has not brought any record to show that the assessment order was served on the assessee prior to the said date. Therefore, in the absence of the service of the impugned order to the assessee, the assessee was not supposed to file an appeal before the learned CIT(A). After the said notice issued u/sec.188A of the Act dated 28.11.2022, the assessee filed reply dated 02.12.2022 and made an application to the Assessing Officer for supply of the copy of the assessment order on 07.12.2022 and thereafter, filed an appeal before the learned CIT(A) without any delay. All these facts as emerging from the record clearly establish that the delay in filing the appeal before the learned CIT(A) was not deliberate, but, due to the non-communication and knowledge of the assessment order passed by the Assessing Officer. The conduct of the assessee after the notice issued by the Assessing Officer
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u/sec.188A of the Act dated 28.11.2022 clearly shows that the assessee has taken all necessary steps without any further delay and, therefore, there was no intentional delay in filing the appeal before the learned CIT(A). It is also pertinent to note that due to the outbreak of Covid-2019
pandemic, there was a break of communication between the assessee and its employees which is also a cause of non- communication of the impugned order passed by the Assessing Officer.
It is settled proposition of law that while condoning the delay, the Court should take a lenient view by considering the explanation and reasons for delay whether Bonafide or is a mere device to cover the ulterior purpose such as an attempt to save the limitation in an underhand way. Therefore, if the reasons explained by the assessee shows that it has acted bonafidely and no attempt was made to take the advantage of filing the appeal belatedly and further if the reasons explained by the assessee are bonafide and justify the delay, then, the Court should be liberal in construing the ‘sufficient cause’ and should lean in favour of the litigant who
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approached the Court belatedly. Whenever substantial justice and technical considerations are pitted against each other, cause of substantial justice has to be preferred and justice-oriented approach has to be taken while deciding the matter for condonation of delay as held by the Hon’ble
Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra).
In the case in hand, when the Assessing Officer has made the additions on account of the capital introduced by the partners as well as secured loans taken by the assessee from the Union Bank which is an undisputed fact as evident from the record and particularly, from the bank loan account statement, then, dismissing the appeal of the assessee on the technical reason of limitation would certainly cause the gross injustice to the assessee. It is pertinent to note that when the assessee was yet to start the business operations, then, the question of unexplained cash credits treating as income of the assessee is highly arbitrary and un- permissible. Further, the assessee has produced all the relevant documentary evidences including the confirmation
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of the partners and source of the fund in the hand of the partners, then, even if the Assessing Officer has doubted the creditworthiness of the partners who introduced the capital, the addition cannot be made in the hands of partnership firm, but, can be considered in the hands of the partners as held by the Hon’ble Supreme Court, Hon’ble Juri ictional High
Court as well as in the series of judicial precedents as relied upon by the assessee. Therefore, prima facie the assessee has made out a case of arbitrary additions made by the Assessing
Officer which needs to be considered in light of the relevant evidences brought on record by the assessee which was not considered by the learned CIT(A) as the appeal of the assessee was dismissed on technical ground.
Therefore, in the facts and circumstances of the case, we are satisfied that the assessee has explained the ‘sufficient cause’ for delay in filing the appeal before the learned CIT(A). The majority of the delay period is falling during the Covid-2019 pandemic period and, therefore, in the interest of justice, we condone the delay of 1076 days in filing the appeal before the learned CIT(A). Accordingly, the 16 ITA.No.1608/Hyd./2025
impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the Assessing Officer for de novo assessment, after verification and examination of the relevant record filed by the assessee as well as by considering the binding precedents in the shape of Judgments of Hon’ble
Supreme Court, Hon’ble Juri ictional High Court as well as other decisions on this issue. Needless to say, the assessee be given an appropriate opportunity to of hearing before passing the fresh order.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 19th day of December, 2025. [MANJUNATHA G.]
[VIJAY PAL RAO]
ACCOUNTANT MEMBER
VICE PRESIDENT
Hyderabad, Dated 19th December, 2025
VBP
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Copy to :
G K Constructions Co. Hyderabad – 500 050. C/o. B. Narsing Rao & Co. LLP, Plot No.554, Road No.92, MLA Colony, Jubilee Hills, Hyderabad. PIN – 500 096. Telangana.
The Income Tax Officer, Ward-8(1), Signature Towers, Kondapur, Hyderabad – 500 084. Telangana. 3. The Pr. CIT, Hyderabad. 4. The DR, ITAT, “A” Bench, Hyderabad. 5. Guard file.
BY ORDER
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