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Facts
The assessee firm's appeal to the CIT(A) was dismissed due to an 18-day delay in filing. The assessee contended that the delay was due to its Chief Accountant being on leave to attend to his son's serious illness (brain epilepsy). The underlying assessment order passed by the AO included additions under Section 69 for unexplained investments in immovable property, resulting in a determined income of Rs. 184,02,01,039/-.
Held
The ITAT found the reasons for the 18-day delay to be bona fide and beyond the assessee's control, citing supporting documents. Emphasizing the need for a justice-oriented and liberal approach, the Tribunal set aside the CIT(A)'s order. It directed the CIT(A) to condone the delay and adjudicate the appeal on its merits after providing a reasonable opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) was justified in rejecting the condonation of an 18-day delay in filing the appeal, given the bona fide reasons and supporting documentary evidence provided by the assessee firm.
Sections Cited
143(3), 144B, 69, 143(2), 142(1), 249(3), 249(2), 250
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Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
करदाताकाप्रनतनिधित्व/ : Shri M.V. Prasad, CA Assessee Represented by राजस्वकाप्रनतनिधित्व/ : Ms. U. Mini Chandran, CIT-DR Department Represented by सुिवाईसमाप्तहोिेकीनतधि/ : 04/11/2025 Date of Conclusion of Hearing घोर्णा की तारीख/ : 19/11/2025 Date of Pronouncement ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee firm, a “Limited Liability Partnership” (for short, “LLP”) is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 16/07/2025, which in turn arises from the assessment order passed by the AO under section 143(3) r.w.s 144B of 2 Hitec Cyberspazio LLP vs. DCIT the Income-tax Act, 1961 (for short, “Act”) dated 21/03/2024 for the Assessment Year 2022-23. The assessee firm has assailed the impugned order on the following grounds of appeal before us:
“1. The learned CIT (Appeals) is erred in facts and law while passing the order.
The Learned CIT(Appeals) is not justified in rejecting the plea of the appellant for condonation of delay in filing of appeal even though the appellant firm has valid and sufficient reasons for occurrence of such delay. The Learned CIT(Appeals) ought to have accorded a further opportunity of being heard before rejecting such plea in view of principles of natural Justice.
3. The Learned CIT(Appeals) ought to have adjudicated the appeal on the facts of the case.
On the facts and circumstances of the case and in law, the Ld. Assessing Officer is not justified in making the addition of Rs.40,44,59,669/- under section 69 of the Act towards unexplained investment in purchase of immovable property though they said Investment formed part of the financial statements and is duly reflected in the Balance sheet.
5. On the facts and circumstances of the case, the Ld. Assessing Officer is not Justified in law in making the addition of Rs.34,46,35,810/- (which is included in the addition of Rs.40,44,59,669/-) towards capital contribution made by the partners assuming that there are no sources for the said Investment by the partners in the appellant firm.
6. On the facts and circumstances of the case, the Ld. Assessing Officer is not justified in law in making the addition of Rs.5,98,23,859/- (which is included in the addition of Rs.40,44,59,669/-) towards repayment of bank loan and payment of Interest on the loan assuming that there are no sources for the said payments.
On the facts and circumstances of the case and in law, the Ld. Assessing Officer is not justified in making the addition of Rs.141,57,00,000/- under section 69 towards unexplained investment in purchase of immovable property without verifying the contents of the relevant sale deed bearing No.16519 dated 20.09.2021 which clearly reveals the fact that the buyer is another entity i.e HITEC CYBER CITY SPACES LLP and not the appellant firm.
Any other legal or factual ground that may be urged at the time of hearing of the appeal.”
3 Hitec Cyberspazio LLP vs. DCIT 2. Succinctly stated, the assessee firm had filed its return of income for the AY 2022-23, declaring an income of Rs. 2,00,41,370/-. Subsequently, the case of the assessee firm was selected for scrutiny assessment for examination of, viz., (i) large investment in property; (ii) substantial increase in property; and (iii) High liabilities as compared to low income.
During the course of the assessment proceedings, the AO issued notices under section 143(2) ofc the Act, dated 01/06/2023, and under section 142(1) of the Act, dated 19/07/2023, 10/02/2024 and 26/02/2024, calling upon the assessee firm to substantiate based on supporting documentary evidence the investments made in purchase of immovable property during the subject year as under:
4 Hitec Cyberspazio LLP vs. DCIT 4. In reply, it was the claim of the assessee firm that it had purchased the property situated at Madhapur main road survey, 64 extension (16242 sq yds), vide Document No.16520, dated 20/09/2021 for a consideration of Rs.105,93,00,000/- which in turn was sourced from, viz., (i) loan from Standard Chartered Bank: Rs. 79,70,00,000/-; and (ii) investment from partners: Rs. 34,46,35,810/-. The AO called upon the assessee firm to furnish the details of the capital that was introduced by the partners. However, the assessee firm simply furnished a copy of the registration deed bearing No. 16520, dated 20/09/2021 along with a copy of the loan statement of Standard Chartered Bank. The AO observed that, as per the bank statement, the assessee firm had repaid an amount of Rs. 5,98,23,859/-, which in turn was comprised of interest and principal amount. The AO observed that as the assessee firm had failed to come forth with any explanation regarding the source of investment of Rs. 40,44,59,669/- (Rs. 34,46,35,810/- + Rs. 5,98,23,859/-) made in the purchase of the subject property, therefore, held the same as its unexplained investment made under section 69 of the Act.
Apropos the immovable property purchased by the assessee firm during the subject year, viz., Madhapur main road survey-64, plot No-8 extension 21876 sq yards vide registration deed bearing Document No.16519, dated 20/09/2021 for a consideration of Rs. 141,57,00,000/-, 5 Hitec Cyberspazio LLP vs. DCIT the assessee firm despite specific directions by the AO failed to come forth with any explanation regarding the source of investment made in the said property. Accordingly, the AO, in the absence of any explanation forthcoming regarding the source of the investment made in the aforementioned property, held the same as the assessee’s unexplained investment under section 69 of the Act.
Accordingly, the AO vide his order passed under section 143(3) r.w.s 144B of the Act, dated 21/03/2024, determined the income of the assessee firm at Rs. 184,02,01,039/-.
7. Aggrieved, the assessee firm carried the matter in appeal before the CIT(A).
8. As the assessee firm had delayed the filing of the appeal by a period of 18 days, the CIT(A), not finding any merit in its explanation regarding the reason leading to the delay involved in the appeal filed before him, dismissed the same in limine on the said ground itself. For the sake of clarity, the observations of the CIT(A) are culled out, as under:
6 Hitec Cyberspazio LLP vs. DCIT 7 Hitec Cyberspazio LLP vs. DCIT 8 Hitec Cyberspazio LLP vs. DCIT 9 Hitec Cyberspazio LLP vs. DCIT 10 Hitec Cyberspazio LLP vs. DCIT 11 Hitec Cyberspazio LLP vs. DCIT 12 Hitec Cyberspazio LLP vs. DCIT 13 Hitec Cyberspazio LLP vs. DCIT 14 Hitec Cyberspazio LLP vs. DCIT 15 Hitec Cyberspazio LLP vs. DCIT 16 Hitec Cyberspazio LLP vs. DCIT 17 Hitec Cyberspazio LLP vs. DCIT 18 Hitec Cyberspazio LLP vs. DCIT 19 Hitec Cyberspazio LLP vs. DCIT 20 Hitec Cyberspazio LLP vs. DCIT
The assessee firm aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
21 Hitec Cyberspazio LLP vs. DCIT 10. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities, and the material available on record.
Sri M.V. Prasad, Chartered Accountant, the Learned Authorized Representative (for short, “Ld. AR”) for the assessee firm, at the threshold of hearing of the appeal submitted, that the CIT(A) had grossly erred in law and facts of the case by declining to condone the delay of 18 days that was involved in the appeal filed before him. Elaborating on his contention, the Ld. AR submitted that the delay in filing the appeal before the CIT(A) had crept in because Sri M. Someswara Rao, Chief Accountant (Financial Manager) of M/s. Aparna Infra Housing Pvt Ltd., who was also looking after the income tax matters of the assessee firm, had suddenly proceeded on leave from 01/03/2024 to 30/04/2024 due to his son’s ill health (Brain Epilepsy combined with fits). The Ld. AR submitted that Sri M. Someswara Rao (supra) had thereafter reported back to duty on 01/05/2024 and had thereafter got the appeal prepared and filed the same with the CIT(A), which by that time involved an inadvertent delay of 18 days. The Ld. AR submitted that the assessee firm, vide its application, dated 08/05/2024, had requested the CIT(A) for condonation of the delay of 18 days involved in the appeal before him, that had crept in due to bona fide reasons which were beyond the control of the assessee firm. Elaborating further on his contention, the 22 Hitec Cyberspazio LLP vs. DCIT Ld. AR submitted that the CIT(A) had summarily rejected the explanation of the assessee firm regarding the delay of 18 days in filing the appeal of the assessee firm. Apart from that, the CIT(A) had observed that the assessee firm had failed to place on record any documentary evidence to support its claim regarding the illness/brain epilepsy of the son of Sri M. Someswara Rao, the Chief Accountant. Also, the CIT(A) had observed that, considering the large scale of the business of the assessee firm, it was unbelievable that an accountant of M/s. Aparna Infra Housing Pvt Ltd. (supra) was handling the affairs of the assessee firm. The Ld. AR submitted that the CIT(A) had further observed that though, the assessee firm at Para-4 of its condonation petition stated that an “affidavit” along documentary evidence in proof of granting the leave to the Chief Accountant, etc., would be submitted at the time of hearing of the appeal, but no such details were placed on his record even in response to the notice issued under section 250 of the Act, dated 12/06/2025. The Ld. AR submitted that the CIT(A) had thereafter declined to exercise the discretion vested with him under section 249(3) of the Act to condone the delay involved in the present appeal filed before him, and by drawing support from a host of judicial pronouncements had dismissed the appeal in limine on the said count itself.
23 Hitec Cyberspazio LLP vs. DCIT 12. Carrying his contention further, the Ld. AR submitted that the assessee firm had come into existence very recently, and the delay in filing of the present appeal had occasioned due to compelling circumstances, i.e., Sri M. Someswara Rao, Chief Accountant, had proceeded on leave from 01/03/2024 to 30/04/2024 due to the medical exigency which required him to attend to the serious ill health of his son, therefore, the CIT(A), in all fairness ought to have adopted a liberal approach and condoned the delay instead of summarily dismissing the same in limine. The Ld. AR in support of his contention had relied upon the judgment of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025.
Per contra, Ms. U. Mini Chandra, Commissioner of Income Tax – Departmental Representative (for short, “Ld. CIT-DR”), relied upon the orders of the lower authorities.
We have heard the Learned Authorized Representatives of both parties in the backdrop of the orders of the lower authorities and the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contention.
24 Hitec Cyberspazio LLP vs. DCIT 15. Admittedly, it is a matter of fact discernible from the record that the assessee firm had delayed the filing of its appeal for a period of 18 days. As observed herein above, it has been the claim of the assessee firm that the delay in filing of the appeal had crept in because its Chief Accountant, viz., Sri M. Someswara Rao (supra) who was looking after the tax matters of the assessee firm had proceeded on leave to attend to the serious ill health of his son, who was suffering with serious neurological disorder, i.e., brain epilepsy combined with fits. Thereafter, Sri M. Someswara Rao (supra), after reporting back to his duty on 01/05/2024, had, after taking cognizance of the notices received from the income tax department, immediately prepared the appeal and, involving no further loss of time, had filed the same before the CIT(A).
We find that the assessee firm to support its aforesaid claim had placed on record a copy of the leave application of Shri M. Someswara Rao (supra), dated 09/02/2024, Page No.1 of APB, the medical reports/discharge summaries evidencing the fact of ill health of Mr. Mohith, S/o Shri M. Someswara Rao, Page No.2 to 20 of APB, and documents supporting the leave granted to Sri M. Someswara Rao from 01/03/2024 to 30/04/2024, Page No.21 of APB. Also, the assessee firm had placed on record an “affidavit” of Sri Killamsethy Joga Rao S/o. Late Sri K. Sri Ramulu, authorized signatory of the assessee firm, wherein he had deposed the facts leading to the delay in filing of the present appeal, 25 Hitec Cyberspazio LLP vs. DCIT i.e., Sri M. Someswara Rao had proceeded on leave from 01/03/2024 to 30/04/2024 due to his son’s ill health.
We have thoughtfully considered the reasons leading to the delay in filing of the present appeal, and are of a firm conviction that the same had occasioned because of bona fide reasons which were beyond the control of the assessee firm and not on account of any lackadaisical approach on the latter’s part, therefore, the CIT(A) in all fairness and in the interest of justice ought to have condoned the same. We say so, specifically for the reason that as the delay in filing of the present appeal had crept in because it’s accountant, viz., Sri M. Someswara Rao (supra) who was looking after the income tax matters of the assessee firm had to suddenly proceed on leave from 01/03/2024 to 30/04/2024 due to his son’s ill health, therefore, there are justifiable reasons explaining the delay in filing of the appeal before the CIT(A). In our view, the CIT(A) ought to have adopted a justice oriented and liberal approach instead of dismissing the appeal of the assessee firm in limine on the ground that the same involved a delay of 18 days, which we may herein observe cannot be brought within the meaning of an inordinate delay. Our aforesaid view is supported by the recent decision of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31st January, 2025. The Hon'ble Apex 26 Hitec Cyberspazio LLP vs. DCIT Court while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income-Tax Appellate Tribunal, Raipur Bench, had observed, that a justice-oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay involved in filing the appeal.
We, thus, in terms of our aforesaid observations, set aside the matter to the file of the CIT(A) with a direction to condone the delay of 18 days involved in the appeal before him and dispose of the appeal considering the grounds based on which the assessment order has been assailed before him. Needless to say, the CIT(A) shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee firm.
Resultantly, the appeal of the assessee firm is allowed for statistical purposes.
Order pronounced in the open court on 19th November, 2025. S (मधुसूदन सावडिया) (रवीश सूद) (MADHUSUDAN SAWDIA) (RAVISH SOOD) लेखासदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER d/- Hyderabad, dated 19.11.2025. OKK/sps 27 Hitec Cyberspazio LLP vs. DCIT आदेशकीप्रनतललपपअग्रेपर्त/ Copy of the order forwarded to:-
1. 1. नििााररती/The Assessee : Hitec Cyberspazio LLP, 802, Astral Heights, Banjara Hills, Khairatabad, Hyderabad. 2. राजस्व/ The Revenue : Deputy Commissioner of Income Tax, Circle-6(1), IT Towers, AC Guards, Masab Tank, Hyderabad.
3. The Principal Commissioner of Income Tax, Hyderabad. 4. पवभागीयप्रनतनिधि, आयकरअपीलीयअधिकरण /DR,ITAT, Hyderabad.