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Facts
The assessee filed an ITR of Rs. 7,35,780/-, but her case was selected for E-Assessment due to large cash deposits and property transactions. The Assessing Officer made additions of Rs. 1,64,56,000/- for capital gain and Rs. 23,28,600/- for unexplained money under Section 69A, raising the total income to Rs. 1,95,20,380/-. The CIT(A) dismissed the assessee's appeal as invalid and non-est due to delay, incomplete form, and lack of condonation application, without addressing the merits, which the assessee argued was a violation of natural justice as notices were sent to the consultant and not forwarded to her.
Held
The Tribunal condoned the 23-day delay in filing the appeal before it, accepting the reasons of illness and search for a professional as non-willful. The Tribunal found force in the assessee's argument that the CIT(A) dismissed the appeal as non-est without deciding on merits and that proper opportunity of hearing was not provided. Therefore, the matter was set aside to the Assessing Officer for a de novo reconsideration, granting the assessee a reasonable opportunity to explain her case.
Key Issues
Whether the delay in filing the appeal to the Tribunal should be condoned; whether the CIT(A) erred in dismissing the appeal as non-est without deciding on merits or providing adequate opportunity of hearing; and whether the additions made by the Assessing Officer for capital gain and unexplained money require fresh adjudication.
Sections Cited
143(2), 142(1), 69A, 143(3), 144B, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.704/Hyd./2025 Assessment Year 2021-2022 Mrs. Padmavati Morthala, The Income Tax Officer, Hyderabad-500 072. vs. Ward-11(1), PAN BBXPK5874K Hyderabad. (Appellant) (Respondent) For Assessee : CA, Sai Kumar For Revenue : Sri Gurpreet Singh, Sr. AR Date of Hearing : 28.07.2025 Date of Pronouncement : 31.07.2025 ORDER PER MANJUNATHA G. :
The above appeal has been filed by the Assessee against the Order dated 21.01.2025 of the learned CIT(A)- National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2021-2022.
At the very outset, there is a delay of 23 days in filing the appeal before the Tribunal. The assessee had filed an affidavit explaining the reasons for not filing the appeal
2 ITA.No.704/Hyd./2025 within the prescribed time limit contending, inter alia, that, the learned CIT(A) has passed order on 21.01.2025 and the appeal has to be filed before the Tribunal by 19.02.2025. He submitted that, during the said period he was fell sick and thereafter, post recovery from the illness, he was in search of Competent Tax Professional to represent his case and due to his bad physical health and mental health condition and to found competent professional to represent his case, the appeal could not be filed before the Tribunal within the prescribed time limit. He, therefore, submitted that, the delay in filing the appeal before the Tribunal is neither willful nor wanton, but, due to the circumstances beyond his control and, therefore, he pleaded that, the delay of 23 days in filing the present appeal before the Tribunal may please be condoned in the interest of justice.
Shri Gurpreet Singh, Sr. AR for the Revenue, on the other hand, did not strongly object to the reasons explained by the assessee.
We have heard both the parties and perused the affidavit filed by the assessee explaining the reasons for the 3 ITA.No.704/Hyd./2025 delay in filing the appeal within the prescribed time limit before the Tribunal. We are satisfied with the explanation furnished by the assessee and, therefore, condone the delay of 23 days in filing the appeal before the Tribunal and admit the appeal for adjudication.
Briefly stated facts of the case are that, the assessee is an individual and filed her return of income, declaring a sum of Rs.7,35,780/-. The case of the assessee has been selected for E-Assessment scheme on the ground of large cash deposits in bank account and assessee has also purchased/sold one or more properties during the year under consideration. Therefore, the Assessing Officer issued notice u/sec.143(2) on 28.06.2022, and various notices u/sec.142(1) of the Income Tax Act, 1961 22.07.2022, 24.09.2022, 13.10.2022, 14.11.2022 and 24.11.2022 to furnish explanation along with supporting documentary evidences in respect of property sold amounting to Rs.1,64,56,000/- and cash deposit in Axis Bank amounting to Rs.10,79,600/- and Rs.12,49,000/- in HDFC Bank Limited, in total Rs.1,87,84,600/-. However, the assessee
4 ITA.No.704/Hyd./2025 neither appeared nor filed any details to substantiate her case. Therefore, the Assessing Officer determined the total income of the assessee at Rs.1,95,20,380/- by making additions on account of capital gain at Rs.1,64,56,000/- and addition on account of cash deposit in Bank accounts as unexplained money u/sec.69A of the Act amounting to Rs.23,28,600/-, as against the returned income of the assessee at Rs.7,35,780/- vide order dated 17.12.2022 passed u/sec.143(3) r.w.s.144B of the Income Tax Act, 1961 [in short “the Act”].
Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A) with a delay challenging the additions made by the Assessing Officer. During the course of appellate proceedings, the learned CIT(A) issued notices u/sec.250 of the Act on 12.07.2024, 01.08.2024 and 26.09.2024 to the registered email ID mentioned in Form-35. However, the assessee did not file any reply/documentary evidences in support of it’s claim nor filed petition for condonation of delay in filing the appeal before the learned CIT(A). Therefore, the learned CIT(A), in 5 ITA.No.704/Hyd./2025 absence of filing the appeal in prescribed manner, prescribed form and an incomplete Form-35, treated the appeal as an invalid and non-est appeal and dismissed the appeal filed by the assessee.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
CA, Sai Kumar, Learned Counsel for the Assessee submitted that, the assessee could not file complete details before the Assessing Officer during the course of assessment proceedings because, the show cause notice issued for proposing various additions in respect of capital gain and addition under section 69A of the Act, were served on the Tax Consultant which were not forwarded to the assessee. Further, the learned CIT(A) dismissed the appeal filed by the assessee for not filing the application for condonation of delay and not discussed the issues and merits. The Counsel for the Assessee explained the reasons for not appearing before the Assessing Officer and not filing the complete details and according to the Counsel for the Assessee, the notice issued by the Assessing Officer, were 6 ITA.No.704/Hyd./2025 received by the Tax Consultant which were not forwarded to the assessee and due to this reason the, assessee could not respond to the Assessing Officer with complete details. Further, the assessee had explained the transactions reported in his PAN and explained that, it is a purchase of property, but, not sales. But, the Assessing Officer has computed the capital gain and made addition because, there were no complete details before the Assessing Officer. Before the learned CIT(A), although, there is a delay in filing of the appeal, but, the learned CIT(A) dismissed the appeal filed by the assessee once again for not filing application for condonation of delay, without providing sufficient opportunity of hearing to the assessee. He, therefore, submitted that, the learned CIT(A) has violated the principals of natural justice, which requires reasonable opportunity of hearing to the assessee before deciding the appeal. Since the learned CIT(A) has dismissed the appeal filed by the assessee as non-est for not filing application for condonation of delay that too without providing sufficient opportunity and further the Assessing Officer has made
7 ITA.No.704/Hyd./2025 addition towards purchase a property under the Head “Capital Gain”, he pleaded that the issue may please be set- aside to the file of Assessing Officer for further verification in the interest of justice by giving another opportunity of hearing to the assessee.
Sri Gurpreet Singh, learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, during the course of assessment proceedings before the Assessing Officer and during the course of appellate proceedings before the learned CIT(A), the assessee has been provided with sufficient opportunities to substantiate her case, which is evident from the orders of the lower authorities. Since, the assessee has nothing to say, therefore, she did not file any documentary evidences in support of her claim. Therefore, the issue under appeal is not fit to remit back to the file of Assessing Officer for further verification. He, therefore, submitted that, the order of the learned CIT(A) should be upheld.
8 ITA.No.704/Hyd./2025 10. We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, there is no dispute between the parties that, the assessee had not appeared either before the Assessing Officer during the course of assessment proceedings or before the learned CIT(A) during the course of appellate proceedings. The Counsel for the Assessee argues that, the Assessing Officer has sent notices to the Tax Consultant, which were not forwarded to the assessee and, therefore, the assessee could not substantiate her case before the Assessing Officer. During the course of appellate proceedings, the learned CIT(A) has dismissed the appeal as non-est without condoning the delay and not decided the appeal on merits. Further the Assessing Officer has made addition towards purchase of property under the Head “Capital Gain” In this view of the matter, we find force in the arguments of the Counsel for the Assessee. Therefore, we are of the considered view that, the matter needs to be set- aside to the file of Assessing Officer for further verification. Therefore, we direct the Assessing Officer to reconsider the 9 ITA.No.704/Hyd./2025 issue de novo, after providing reasonable opportunity of hearing to the assessee to explain her case.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 31.07.2025.