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Facts
The assessee, a sub-contractor, experienced severe personal and financial distress due to the untimely deaths of his younger brother and father, and his own medical issues. This led to a failure to manage tax matters, resulting in an ex-parte reassessment order for AY 2014-15, where the AO estimated income at 8% of turnover. The CIT(A) dismissed the assessee's subsequent appeal due to a 13-day delay, prompting this appeal to the ITAT with a 325-day delay, for which condonation was sought.
Held
The Tribunal condoned both the 325-day delay in filing the appeal before it and the 13-day delay before the CIT(A), acknowledging the assessee's family tragedies and health issues. It found that the CIT(A) dismissed the appeal in limine without deciding on merits and the AO passed an ex-parte order. Consequently, the Tribunal set aside the CIT(A) order and remanded the matter to the Assessing Officer for fresh adjudication, directing reconsideration of income estimation in light of precedents for sub-contractors and affording the assessee an opportunity of being heard.
Key Issues
Whether the delay in filing appeals before CIT(A) and ITAT should be condoned due to family tragedies and personal difficulties; and whether the ex-parte assessment and estimation of income at 8% for a sub-contractor were justified.
Sections Cited
148, 142(1), 147, 144, 144B, 234A, 234B, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SM’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
(निर्धारण वर्ा/Assessment Year:2014-15) Shri Gorsa Mohan Kumar Babu, Income Tax Officer, Vs. Ward-1, Sangareddy. Hyderabad. PAN: AADHG5916J (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Y.V.Bhanu Narayan Rao, C.A. रधजस् व द्वधरध/Revenue by: Smt. B. Malathi, SR-DR सुिवधई की तधरीख/Date of hearing: 25/11/2025 घोर्णध की तधरीख/Pronouncement: 28/11/2025 आदेश/ORDER
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the assessee is directed against the order dated 20.06.2024 of order of National Faceless Appeal Centre (NFAC), Delhi [Learned Commissioner of Income Tax (Appeals)] for the Asst. Year 2014- 15.
There is a delay of 325 days in filing the present appeal. The assessee has filed condonation petition dated 19.07.2025 along with Affidavit of the assessee dated 22.11.2025. The Ld. AR of the assessee has submitted that the assessee was carrying on business of works contracts as sub-contractor for M/s. IVRCL Limited and M/s.Akshay Investments during the year under consideration. He has pointed out that the assessee was relying on his younger brother for execution of contracts on a day to day basis and the assessee was basically involved with liaison work and financial aspects with regard to realisation of bills and bank related matters. Unfortunately, the younger brother of the assessee who was looking after the execution of the contract works at the site has expired and therefore due to the tragedy in the family and other personal and financial crisis, the assessee could not look after the income tax matters as the assessee has incurred loss in the business and also discontinued the business activity. The Ld. AR has further submitted that the assessee was also suffering from a disease and undergoing treatment and the medical report has been placed at pages 9 to 15 of the paper book. The Ld. AR has further submitted that the father of the assessee is also suffered from prolonged illness involving cardiac problems and ultimately passed away on 28.02.2024 and therefore the assessee was passing financial and emotional stress. In the meantime, the Assessing Officer passed the reassessment order exparte on 28.01.2022 against which the assessee filed appeal before the Ld. CIT(A) on 26.04.2022 with a delay of 13 days. The Ld. CIT(A) has declined to condone the delay of 13 days in filing the appeal before him and dismissed the appeal of the assessee. Thus the Ld. AR submitted tt the delay in filing the appeal before the Tribunal is neither intentional nor wilful but due to the circumstances beyond the control of the assessee. He pleaded that the delay of 325 days in filing of the appeal before the Tribunal may kindly be condoned.
On the other hand, the Ld. DR has vehemently objected to the condonation of inordinate delay of 325 days in filing of the appeal before the Tribunal. The Ld. DR has submitted that the assessee is a habitual defaulter and even no response to the notices issued by the Assessing Officer which resulted exparte order passed by the Assessing Officer. Even before the Ld. CIT(A) the delay has not been explained in filing the appeal before him.
We have considered the rival submissions and the reasons explained by the assessee through his counsel as well as in the Affidavit which reads as under :
4.1 The assessee has given multiple reasons for the delay in filing of the appeal. The reasons given by the assessee being the untimely demise of his younger brother and father of the assessee as well as the medical problem of the assessee for which the assessee was undergoing treatment as per the medical record filed by the assessee. The assessee has explained that due to the family tragedy as well as personal and financial problems, the assessee could not continue the business which has incurred loss and therefore the assessee could not file the appeal under consideration within the prescribed time. It is also explained that the assessee was only a sub-contractor and the profit margin of the assessee cannot be more than 5% as held by the Tribunal in various decisions whereas the Assessing Officer has estimated the income at 8% of the sub-contract receipts. Considering the facts and circumstances of the case and particularly the death of assessee’s brother who was looking after the business as well as the father of the assessee, we are taking a lenient view for condoning the delay of 325 days subject to cost of Rs.10,000/- to be paid to Prime Minister Relief Fund within a period of one month from the date of this order.
The assessee has raised the following grounds :
The Ld. AR has submitted that due to the family crisis and personal & financial problems, the assessee could not participate in the proceedings before the Assessing Officer as well as before the Ld. CIT(A). The Ld. AR of the assessee submitted that the Assessing Officer has assessed the income by estimating the profit at 8% whereas income of the assessee being a sub- contractor, cannot be more than 5%. In support of his contention, he has relied upon the following orders : (i) DCIT Vs. Narender Reddy Kallu (ITA No.409/Hyd/2016 Dt.25.05.2018) (ii) Dasaradha Rami Reddy Vs. ITO (ITA No.1923/Hyd/2019 Dt.22.04.2021) (iii) C Eswara Reddy & Co. Vs. ACIT (ITA No.668 & 670/Hyd/2009 Dt.31.01.2011) 6.1 The Ld. AR has further pointed out before the Ld. CIT(A) the assessee has claimed the income @ 6% of the sub-contract receipts and therefore the income of the assessee can be assessed by estimating at 6% of the sub- contract receipts.
On the other hand, the Ld. DR has relied upon the orders of authorities below and submitted that the assessee has not produced any books of accounts nor filed any Return of Income, then the orders relied upon by the Ld. AR cannot be applied to the facts of the present case.
We have considered the rival submissions and perused the material on record. The Assessing Officer has passed ex parte order when there was no response and compliance on behalf of the assessee to the various notices issued by the Assessing Officer. The Assessing Officer has estimated the income by applying 8% on the turnover of the assessee and thereby assessed the total income at Rs.32,29,104/-. On appeal, the Ld. CIT(A) has dismissed the appeal of the assessee on the ground that the appeal is not maintainable being barred by limitation because there was a delay of 13 days in filing the appeal before the Ld. CIT(A). The assessee has explained the cause of delay in Form 35 as technical reason for not able to file the appeal in time. We have already considered the reasons for delay of 13 days in filing the appeal before the tribunal and therefore having regard to the facts and circumstances as explained by the assessee as well as in the interest of justice, we condone the delay in filing the appeal before the Ld. CIT(A). Further, the Ld. CIT(A) has not decided the appeal on merits but the same was dismissed in limine and the Assessing Officer has also passed exparte order. Therefore, in view of the various decisions as relied upon by the Ld. AR, the estimation of the income of the assessee as sub-contractor is required to be reconsidered in the light of the decisions relied upon by the Ld. AR. Hence, in the facts and circumstances of the case, we set aside the impugned order of the Ld. CIT(A) and matter is remanded to the file of Assessing Officer for fresh adjudication. The assessee is directed to co- operate with the proceedings before the Assessing Officer and file all the necessary details required for verification and examination by the Assessing Officer. Needless to say, the assessee be afforded an opportunity of being heard.