Loading judgment…
Facts
The assessee appealed an ex-parte assessment (AY 2016-17) by the AO, who made substantial additions for alleged unexplained cash deposits (₹48.82 lakhs), time deposits (₹72.85 lakhs), and capital gains (₹12.53 lakhs), claiming erroneous dual reporting by banks and misinterpretation of property sale and alimony transactions. The CIT(A) dismissed the appeal due to a 10-day delay without addressing merits.
Held
The Tribunal condoned the delays in filing appeals before both the CIT(A) and the Tribunal, finding the AO's assessment prima facie arbitrary. It set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for fresh adjudication on merits, ensuring the assessee is given an appropriate opportunity of hearing.
Key Issues
Condonation of delay in filing appeals; validity of ex-parte assessment and substantial additions made by AO based on alleged duplicate reporting; propriety of CIT(A) dismissing appeal in limine without merit consideration.
Sections Cited
17, 45, 69, 69A, 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Visakhapatnam “Division” Bench, Visakhapatnam
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
(िनधा�रण वष�/Assessment Year: 2016-17) Shri Suri Babu Krovvidi Vs. Income Tax Officer East Godavari Distt. VIJAYAWADA PAN:AEJPK1777P (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri Naresh Gowlikar, CA (hybrid) राज� व �ारा/Revenue by:: Dr. Aparna Villuri, Sr. AR सुनवाई की तारीख/Date of hearing: 10/09/2025 घोषणा की तारीख/Pronouncement: 17/09/2025 आदेश/ORDER
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated 21/02/2025 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2016-17.
There is a delay of 56 days in filing the present appeal. The assessee has filed a petition for condonation of delay to explain the cause of the delay which is supported by an affidavit. The learned Counsel for the assessee has submitted that the assessee is a layman and the assessee was not having any knowledge about the tax and procedural requirement of filing the appeal against the order of the learned CIT (A). He has further
ITA 409 of 2025 Suri Babu Krovvidi submitted that due to lack of proper advice from the Tax Consultant, the assessee was unable to file the appeal within the period of limitation which has resulted a delay of 56 days in filing the present appeal. He has pointed out that the assessee is a salaried person having a meagre salary income of Rs.1,17,692/- whereas the Assessing Officer has assessed the total income of the assessee at Rs.1,35,39,010/-. The learned Counsel for the assessee has pointed out that the assessment order passed by the Assessing Officer is highly arbitrary and contrary to the correct facts. The Assessing Officer has not adhered to the CBDT instructions on the assessment of the correct income of the assessee. The learned Counsel for the assessee has submitted that during the year there was a transaction of sale of property which is reflected in the bank account of the assessee but the Assessing Officer has made the addition on multiple times of the same transactions without considering the correct income arising from the said transaction. The learned Counsel for the assessee has pointed out that the Long Term Capital Gains from the said transaction is only Rs.4,03,702/- apart from the salary income of Rs.1,17,692/- against which the Assessing Officer has made exaggerated assessment at Rs.1,35,39,000/-. Thus, he has submitted that the order passed by the Assessing Officer has caused a gross injustice to the assessee and further the learned CIT (A) has not considered and decided the appeal of the assessee on merit but the same was dismissed in limine by declining to condone the delay of 10 days in filing the appeal. Thus, he has submitted that the appeal of the assessee may be admitted for adjudication on merits otherwise it would result a gross injustice to the assessee.
ITA 409 of 2025 Suri Babu Krovvidi 3. On the other hand, the learned DR has submitted that the assessee’s conduct is very casual and negligent as he has filed belated the appeal before the learned CIT (A) and again a belated appeal before this Tribunal. He has objected to the condonation of the delay.
We have considered the rival submissions as well as the relevant material available on record. At the outset, we note that the Assessing Officer has considered this fact that the assessee has received a salary of Rs.1,17,692/- from M/s. Tata Steel BSL Ltd in para 4.1 as under:
“4.1 Considering the facts of the case and non- compliance of the assessee in response to Notices uls 142(1) and SCN. It is clear that the assessee has received salary of Rs.1,17,692/- from the employer M/s Tata Steel BSL Limited. In absence of reply from the assessee the salary received of Rs.1,17.692/- is added to the total income of the assessee u/s 17 of the Act. (Addition of Rs.1,17,692/-)”
The assessee being a salaried employee and earning a meagre salary income of Rs.1,17,692/- was not required to file any return of income if there is no other income during the year. The Assessing Officer further noted in para 4.2 that in the absence of any documentary evidence with respect to the cost of acquisition, transfer expenses, the entire sale consideration was treated as capital gain at Rs.12,53,000/-. Thus, this action of the Assessing Officer is also highly arbitrary when he has assessed the entire sale consideration as Long Term Capital Gains in the hand of the assessee. Thereafter, the Assessing Officer has made another addition on account of cash deposits in the bank account of the assessee without considering the sale proceeds of the Page 3 of 8
ITA 409 of 2025 Suri Babu Krovvidi property as a source and further, it appears that the amount as added by the Assessing Officer is a multiple of the sale proceeds. Thereafter, after the Assessing Officer has also made an addition of time deposits without considering the fact that the deposits made in the bank account were transferred to the time deposits.
We further note that the learned CIT (A) has not decided the appeal of the assessee on merit but the same was dismissed by declining to condone the delay of 10 days in filing the appeal. Therefore, when the income assessed by the Assessing Officer prima facie is highly arbitrary and excessive of the real income earned by the assessee on account of sale of property, then the appeal of the assessee is required to be considered on merits instead of deciding the same on technical ground of delay in filing the appeal. The assessee has also explained the cause of the delay of 56 days in filing the appeal before the Tribunal.
Having considered the peculiar facts and circumstances of the case and in the interest of justice, we condone the delay of 56 days in filing the present appeal.
The assessee has raised the following grounds of appeal:
ITA 409 of 2025 Suri Babu Krovvidi
We have heard the learned AR as well as the learned DR and carefully perused the impugned orders of the authorities below. The Assessing Officer has passed an ex-parte order and whereby made several additions including the salary income of the assessee. The assessee has explained the facts as under:
Page 5 of 8 ITA 409 of 2025 Suri Babu Krovvidi Page 6 of 8 ITA 409 of 2025 Suri Babu Krovvidi
Thus, it is clear that the assessee has prima facie has made out a case that the Assessing Officer has made various duplicate additions of a single transactions. The learned CIT (A) has not decided the appeal of the assessee on merits but the same was dismissed on technicalities of delay of 10 days in filing the appeal. However considering the facts and circumstances of the case, at the outset we note that the assessee has explained the cause of delay of 10 days as recorded in para 4 of the order of the learned CIT (A) as under:
“4. Condonation of Delay: I am residing in different address and the assessment order received to the different address. I am unable to know that the assessment order received to me. Recently I came to know that the assessment order received to me and immediately filing the appeal. I regret to delay and inconvenience in this regard. So please condone the delay of 10 days and accept the appeal and do the justice as per the provisions of the Income Tax Act”.
ITA 409 of 2025 Suri Babu Krovvidi 11. Thus, once the assessee has explained the cause of delay of 10 days in filing the appeal, the learned CIT (A) ought to have decided the appeal of the assessee on merit instead of dismissing the same by declining the condonation of delay. In the facts and circumstances of the case as discussed above and in the interest of justice, we condone the delay of 10 days in filing the appeal before the learned CIT (A).
Since the appeal of the assessee was not decided by the learned CIT (A) on merits, therefore, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after considering the relevant facts and details after giving an appropriate opportunity of hearing. We order accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes.