PRASANTH PUTTAMAREDDY,NELLORE vs. INCOME TAX OFFICER, WARD-1, NELLORE

Aggrieved with the assessment order, the assessee preferred appeal before the Ld. CIT(A).

Before the Ld. CIT(A), the assessee had filed an appeal with a delay of 332 days and explained the reasons for the delay in filing of the appeal, as per which, the assessee is an NRI and had left India on 21.04.2016 and had not come back from the USA till date. Therefore, the notice issued by the A.O. during the assessment proceedings was not received by the assessee, and because of this, the assessee could not represent before the A.O. Act. To this effect, the assessee submitted that, since he was out of the country during the relevant period, the delay in filing of the appeal was neither intentional nor deliberate. The Ld. CIT(A), however, dismissed the appeal in ‘limine’ without condoning the delay and held that, the reasons given by the assessee did not come under ‘reasonable cause’ as provided under the Act.

Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee Shri M.V. Prasad, C.A. submitted that, the assessee, being an NRI, could not receive the notices issued by the A.O. as he had left India on 21.04.2016 and had not returned. It was submitted that, the notice was served on relatives, and only thereafter, the assessee became aware of the proceedings and approached the office to file the appeal, resulting in a delay of 332 days. It was contended that, the delay was neither deliberate nor intentional and is supported by bona fide reasons. It was further submitted that, the Ld. CIT(A) ought to have condoned the delay and decided the issue on merits, and the file of the A.O. for de novo consideration.

The learned Sr. A.R. for the Revenue, Shri D. Praveen, on the other hand, supporting the order of the Ld. CIT(A), submitted that, notices were issued to the last known address of the assessee, and therefore, the non-appearance cannot be taken as a sufficient cause for condoning such a long delay. It was submitted that, the Ld. CIT(A) has rightly dismissed the appeal in ‘limine’ as the reasons given by the assessee did not constitute reasonable cause. It was further contended that, the A.O. had passed the assessment order based on the material available on record and after issuing statutory notices, and therefore, the order requires no interference.

We have heard both sides, perused the material available on record and had gone through the orders of the authorities below. We find that, the assessee is an NRI and left India for the purpose of employment in the year 2016 and did not come back up to the date when the A.O. has passed the order. However, when the notice server try to serve notice on his relative, he came to know about the income tax proceedings and thus, approached to file appeal, and in that process, there is a delay of 332 days. Since the assessee was out of the country and was not present during the relevant period, in our considered view, the explanation offered by the assessee for not filing the appeal before the Ld. CIT(A) is bona fide and does come under reasonable cause. Thus, the Ld. CIT(A) ought to have condoned the delay and decided the issue on merits. Since the Ld. CIT(A) dismissed the appeal in ‘limine’ without deciding the appeal on merits, the matter needs to be set aside to the file of the A.O. Thus, we condone the delay in filing of the appeal before the Ld. CIT(A) and restore the issue back to the file of the A.O. to reconsider the issue de novo in accordance with law. The assessee is directed to furnish relevant evidences in support of his case as and when the case is posted for hearing.

In the result, the appeal of the assessee is allowed for statistical purposes. for A.Y. 2016-17.

The present appeal filed by the assessee is consequential to the appeal filed by the assessee in A.Y. 2016-17. The A.O. levied penalty under Section 271(1)(c) of the Income-tax Act, 1961 on the addition made towards investment for purchase of property under Section 69A of the Act, and the penalty order under Section 271(1)(c) was passed vide order dated 22.08.2024.

Once again, the assessee has filed the appeal against the penalty order passed under Section 271(1)(c) with a delay of 120 days and explained the very same reason that he is out of the country and only after knowing the fact that the relatives informed him about the notice, he went to the office and filed the appeal and in that process, it has resulted in delay of 120 days. The Ld. CIT(A) on the very same reasons dismissed the appeal filed by the assessee without condoning the delay and held that, the reasons given by the assessee do not come under ‘reasonable cause’ as provided under the Act.

Aggrieved with the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee submitted that, the delay of 120 days occurred only because the assessee was out of the country and came to know about the notice when relatives informed him about the proceedings. It was submitted that, the delay was neither intentional nor deliberate and that the Ld. CIT(A) should have condoned the delay and decided the issues on merits. It was further submitted that, the penalty under Section 271(1)(c) is purely consequential in nature and cannot survive since the quantum assessment in A.O. for de novo consideration.

The Learned Senior A.R. for the Revenue, on the other hand, opposed the petition filed by the assessee for condoning the delay in filing of the appeal and argued that the assessee had filed the appeal with a delay of 120 days, for which the reasons given by the assessee do not come under sufficient cause as provided under the Act and that the Ld. CIT(A) has rightly dismissed the appeal in ‘limine’.

We have heard both sides, perused the material available on record, and had gone through the orders of the authorities below. We find that an identical order of the Ld. CIT(A) dismissing the appeal filed by the assessee for delay in filing arose in the assessee’s own case in A.O. for reconsideration. Since the present appeal pertains to penalty under Section 271(1)(c) of the Income Tax Act, 1961, and this is consequential to the assessment order passed by the A.O. under Section 147 r.w.s. 144 of the Act, and further, the assessment proceedings have been set aside to the file of the A.O., the present penalty levied by the A.O. cannot stand on its own. Therefore, we condone the delay in filing of the appeal before the Ld. CIT(A) and restore the issue back to the file of the A.O. for reconsideration of the issue de novo in accordance with law. The A.O. is directed to consider the penalty under Section 271(1)(c) after completing the assessment proceedings as per law.

In the result, the appeal filed by the assessee in is allowed for statistical purposes.

To sum up, both the appeals filed by the assessee are allowed for statical purposes. A copy of this common order be placed in the respective case files.