KAMISETTY ASHOK KUMAR (HUF),HYDERABAD vs. INCOME TAX OFFICER, WARD-15(1), HYDERABAD

The brief facts of the case are that the assessee is a Hindu Undivided Family (HUF) and did not file any return of income for Assessment Year 2015–16. On the basis of information available on record, the Learned Assessing Officer (“Ld. AO”) noticed that the assessee had sold an immovable property for a Page 2 of 6 consideration of Rs.1,73,00,000/-. Accordingly, the Ld. AO initiated proceedings under section 147 of the Income Tax Act, 1961 (“the Act”). During the assessment proceedings, the assessee did not respond to any of the notices issued by the Ld. AO. The Ld. AO, therefore, proceeded to complete the assessment under section 144 of the Act on the basis of material available on record. The Ld. AO, due to non-compliance by the assessee, brought to tax the entire sale consideration of Rs.1,73,00,000/- as short-term capital gain. The Ld. AO also noticed that the assessee had received rental income of Rs.6,31,395/- during the relevant previous year and accordingly assessed the same under the head “Income from Business.” Finally, the assessment was completed by the Ld. AO under section 147 read with section 144 of the Act on 11.03.2024 assessing the total income of the assessee at Rs.1,79,31,395/-.

Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). However, there was a delay of 294 days in filing the appeal before the Ld. CIT (A). The Ld. CIT(A) refused to condone the delay and dismissed the appeal without adjudicating the issues on merits.

Aggrieved with the order of the Ld. CIT(A), the assessee has preferred the present appeal before this Tribunal. During the appellate proceedings, the Learned Authorised Representative (“Ld. AR”) submitted that the delay in filing the appeal before the Ld. CIT(A) was neither intentional nor deliberate. It was submitted that the Karta of the assessee-HUF is settled in the United States of America. He resides outside India and has been regularly filing

Per contra, the Learned Departmental Representative (“Ld. DR”) submitted that he has no serious objection if the matter is restored to the file of the Ld. AO for fresh adjudication, considering that the original assessment was completed ex parte and the assessee could not respond to any notices. The Ld. DR

We have carefully considered the submissions of both parties and examined the material available on record. It is evident that the delay in filing the appeal before the Ld. CIT(A) occurred due to the assessee coming to know of the assessment order only at a later stage. In our considered view, the reasons explained by the assessee constitute sufficient cause to condone the delay in filing the appeal before the Ld. CIT(A). The assessee should not suffer for the lapses of the earlier consultant, particularly when the Karta resides outside India and there is no indication of deliberate inaction or malafide intention. We therefore condone the delay of 294 days in filing the appeal before the Ld. CIT(A). Further, since the assessment was completed ex parte under section 144 of the Act, without any participation by the assessee, and the Ld. CIT(A) has not examined the matter on merits, we deem it proper to remand the issue to the file of the Ld. AO for de novo adjudication. Accordingly, we remand the issue to the file of the Ld. AO with a direction that the Ld. AO shall provide due opportunity of being heard to the assessee. The assessee shall be at liberty to file all evidences and submissions in support of its claims. The assessee is also directed not to seek unnecessary adjournments during the proceedings.

In the result, the appeal of the assessee is allowed for statistical purposes.