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Facts
The assessee filed a return for AY 2013-14 declaring a loss, which was initially processed U/s. Section 143(1) and later completed U/s. Section 143(3). This assessment was subsequently revised by the Pr. CIT U/s. Section 263, directing the AO to re-do the assessment. Due to the assessee's non-compliance to notices, the AO completed the re-assessment U/s. Section 144 r.w. Section 263, making additions, which the assessee appealed belatedly to the CIT(A). The CIT(A) dismissed the appeal in limine without condoning the 138-day delay.
Held
The Tribunal found it a fit case to condone the delay in filing the appeal before the CIT(A). Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) to consider the assessee's petition for condonation of delay along with an affidavit and to decide the appeal on merits after providing a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without condoning the 138-day delay; and whether the merits of the additions made by the AO U/s. Section 144 should be re-examined.
Sections Cited
144, 263, 143(1), 143(3), 143(2), 142(1)
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER V. DURGA RAO, JM:
This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (in short “CIT(A)”) vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1072379497(1), dated 21/01/2025 for the AY 2013-14 arising out of the order passed U/s. 144 r.w.s 263 of the Income Tax Act, 1961 (in short “the Act”), dated 29/12/2017.
ITA 190/VIZ/2025 Tirumalasetty Nagaraju vs. ITO 2. Brief facts of the case are that the assessee is an individual doing Cotton and Wine business, in the name and style of M/s. Anuradha Cotton Traders & M/s. M/s. Balaji Wines respectively, has filed his return of income for the AY 2013-14 admitting a total loss of Rs. 14,70,349/-. The return was processed U/s. 143(1) of the Act on 19/07/2014 and thereafter the case was selected for scrutiny under CASS to examine the various business aspects. Accordingly, the assessment was completed U/s. 143(3) of the Act on 29/01/2015 by estimating the income from wine business @ 5% on the cost of goods purchased which worked out to Rs. 3,75,086/-. Later on, the assessment order passed by the AO was subjected to revision by the Ld. Pr. CIT U/s. 263 of the Act, who set aside the order passed U/s. 143(3) of the Act treating the order of the AO as erroneous and prejudicial to the interest of the Revenue and passed the order U/s. 263 of the Act on 25/01/2017 wherein the Ld. Pr. CIT directed the AO to re-do the assessment after verifying the genuineness of license fee of Rs. 3,53,005/-. Adhering to the directions of the Ld. Pr. CIT, the AO issued statutory notices U/s. 143(2) and 142(1) of the Act and called for certain specific information required in respect of re-assessment. However, there was no response from the assessee. Considering the assessee’s non-compliance to the notices, the AO issued a show cause notice on 15/11/2017 and proposed to complete the assessment U/s. 144 of the Act. There was to compliance to the show cause notice issued
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ITA 190/VIZ/2025 Tirumalasetty Nagaraju vs. ITO and therefore, the AO proceeded to complete the assessment U/s. 144 r.w.s 263 of the Act. Accordingly, the AO passed the order on 29/12/2017 by making certain additions and determined the total income at Rs. 40,35,384/-. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) belatedly with a delay of 138 days.
Before the Ld. CIT(A), the assessee has sought condonation of delay and explained the reasons by way of grounds that were prevented him to file the appeal within the prescribed time limit. However, the Ld. CIT(A), did not consider the submissions of the assessee and dismissed the appeal in limine without condoning the delay. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:
“1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in refusing to condone the delay and dismissing the appeal in limine. 3. Without prejudice to the above, the Ld. CIT(A) ought to have deleted the addition of Rs.33,53,005/- made by the AO towards disallowance of license fee paid by the appellant to AP Beverages Corporation. 4. Any other ground that may be urged at the time of hearing.”
At the outset, the Ld. AR submitted that the appeal of the assessee may be remitted back to the file of the Ld. CIT(A) in order to decide the appeal on merits. He further submitted that the though the assessee
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ITA 190/VIZ/2025 Tirumalasetty Nagaraju vs. ITO while seeking condonation of delay has raised grounds, the assessee understands that he has not filed petition for condonation of delay along with the assessee’s affidavit. Therefore, the Ld. AR pleaded that the assessee may be provided one more opportunity before the Ld. CIT(A) in order to consider the assessee’s explanation for condonation of delay and also to decide the case on merits.
The Ld. DR on the other hand relied on the orders of the Ld. Revenue Authorities and argued in support of their decision.
We have heard both the sides and perused the orders of the Ld. Revenue Authorities and also the material available on record. It is apparent from the order of the Ld. CIT(A) that the appeal of the assessee was dismissed in limine without condoning the delay. Before us, the Ld. AR submitted that if the assessee is provided one more opportunity of being heard, then the assessee will clearly explain the reasons that prevented the assessee in filing the appeal belatedly along with the affidavit of the assessee. We have also gone through the reasons advanced by the assessee before the Ld. CIT(A) with respect to belated filing of the appeal. Considering all the above facts and circumstances of the case, we are of the opinion that it is a fit case to condone the delay occurred in filing the appeal before the Ld. CIT(A). Therefore, we set- aside the order of the Ld. CIT(A) and direct the Ld. CIT(A) to consider the assessee’s petition for condonation of delay along with the affidavit
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ITA 190/VIZ/2025 Tirumalasetty Nagaraju vs. ITO and decide the case afresh on merits after affording a reasonable opportunity of being heard to the assessee as per the principles of natural justice. Further, the assessee is also hereby directed to cooperate with the Ld. Revenue Authorities in their proceedings, otherwise, they are at liberty to pass orders based on the material available on record.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated herein above.
Order pronounced in the open court on 09th June, 2025.