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Facts
The assessee failed to file its return of income for the assessment year 2016-2017 and subsequent years. Despite notices under various sections, no response was received, leading to a best judgment assessment by the AO. The assessee's appeals before the CIT(A) were dismissed in limine due to a significant delay.
Held
The Tribunal condoned the delay in filing the appeals before the CIT(A), finding that the death of the assessee's chartered accountant and subsequent communication breakdown constituted a sufficient and reasonable cause. The Tribunal held that the CIT(A) was not justified in dismissing the appeals without deciding on merits.
Key Issues
Whether the delay in filing appeals before the CIT(A) was condonable on account of the death of the assessee's representative and resultant communication issues, and if so, whether the matter should be remanded to the AO for de novo consideration.
Sections Cited
139(1), 139(4), 148, 142(1), 144, 144B, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’Bench, Hyderabad
Before: SHRI MANJUNATHA G. & SHRI RAVISH SOOD
2 ITA.No.1477, 1478 & 1479/Hyd./2025 limine without deciding the appeal on merits. Since common issues involved in these appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. First, we take- up the appeal ITA.No.1477/Hyd./2025 for the assessment year 2016-2017 as “lead” appeal.
ITA.No.1477/Hyd./2025 – A.Y. 2016-2017 :
Brief facts of the case are that, the assessee viz., Sreemath Khadri Lakhsmi Narasimhaswamy Devasthanam has not filed its return of income for the assessment year 2016-2017 either u/sec.139(1)/ 139(4). The case of the assessee has been selected for scrutiny on two issues i.e., interest other than interest on securities from State Bank of India, Andhra Pradesh, State Bank of India Agricultural Development Bank amounting to Rs.1,68,963/-; 94,791/-; 8,17,701/-; Rs.14,072/-; Rs.79,247/- and deposited cash in saving bank account in Andhra Pragathi Grameena Bank amounting to Rs.6,69,08,796/- treated as unexplained cash deposits u/sec.69A of the Income
3 ITA.No.1477, 1478 & 1479/Hyd./2025 Tax Act, [in short “the Act”], 1961. The Assessing Officer issued notice u/sec.148 of the Act on 30.03.2023 and also issued statutory notices u/sec.142(1) and show cause notice u/sec.144 of the Act on various dates. Since, there were no response from the assessee to any of the notices and in absence of any supporting documentary evidences filed by the assessee to substantiate its case, the Assessing Officer passed best Judgment assessment order dated 24.03.2024 u/sec.147 r.w.s.144 r.w.s.144B of the Act by assessing the total income of the assessee at Rs.6,80,83,570/-.
Being aggrieved, the assessee carried the matter in appeals before the learned CIT(A) with a delay of 10 months and 25 days [in ITA.Nos.1477 and 1478/ Hyd./2025]; 01 month and 01 day [in ITA.No.1479/ Hyd./2025]. During the course of appellate proceedings, the learned CIT(A) has issued notice dated 08.08.2025 calling the assessee to furnish information. In response, the assessee has filed written
4 ITA.No.1477, 1478 & 1479/Hyd./2025 submissions, statement of facts, grounds of appeal and Form No.10AC. However, the learned CIT(A) without deciding the appeal on merits, dismissed the appeal of the assessee in limine by not condoning the delay in filing of these appeals.
4. Aggrieved by the Orders of the learned CIT(A), the assessee is now, in appeals before the Tribunal.
5. CA, PV Raghavendra Kumar, at the outset, submitted that the appeals of the assessee were dismissed by the learned CIT(A) in limine being barred by limitation, without appreciating the documents placed on record which is evident from para-3 of the appellate order of the learned CIT(A) [in ITA.No.1477/Hyd./2025]. It was the submission of the learned Counsel for the Assessee that, the partner of the Firm Sri Sankara Narayana Amancherla, Chartered Accountant, was the professional and was actively handling the taxation and compliance matters of the assessee Devasthanam. Unfortunately, he passed away on 18.12.2018, copy of death certificate filed. He submitted that, after the demise of the partner of the Firm viz., Sri Sankara
5 ITA.No.1477, 1478 & 1479/Hyd./2025 Narayana Amancherla, Chartered Accountant, there was no further interaction or coordination between the Firm and the Devasthanam and consequently, communication with the Firm could not be continue or re-established. He submitted that, in the Income-tax portal for the purpose of all communications i.e., notices, and assessment proceedings initiated by the Income-tax Department after Assessment Year 2018-2019 were received only in the email ID of the Firm asn16bsb@gamil.com continued to remain on record who passed away and, therefore, they could not be brought to the knowledge of the Devasthanam due to reasons beyond control. He submitted that, there is a ‘sufficient and reasonable cause’ in not filing the appeals within the period of limitation before the learned CIT(A). He, therefore, pleaded that, one more opportunity may please be provided to the assessee by condoning the delay in filing the appeals before the learned CIT(A). Further, since the Assessing Officer has passed ex-parte orders, the appeals may be remitted back to the file of Assessing Officer for de novo verification and 6 ITA.No.1477, 1478 & 1479/Hyd./2025 examination by providing an opportunity of hearing to the assessee.
Dr. Narendra Kumar Naik, learned CIT-DR, on the other hand strongly opposed for condonation of delay and submitted that, the assessee could not explain reasons for delay in filing appeals before the learned CIT(A) with ‘sufficient cause’ and, therefore, the learned CIT(A) has rightly dismissed the appeals of the assessee in limine in the absence of not submitting the specific information called for by the learned CIT(A). He has relied upon the Orders of the learned CIT(A).
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. At the outset, we have gone through the affidavit and reasons furnished by the assessee in not filing the appeals before the learned CIT(A) within the period of limitation. We find that, during the course of appellate proceedings before the learned CIT(A), despite issue of notices on several occasions, the assessee has not explained reasons
7 ITA.No.1477, 1478 & 1479/Hyd./2025 for non-appearance and according to the assessee, due to certain reasons beyond the control of the assessee, it could not file relevant details before the learned CIT(A). We find that, the reasons explained by the assessee in his affidavit have seemed to be genuine and bonafide by taking note of the reasons furnished by the assessee. The Hon’ble Supreme Court in the case of Collector, Land Acquisituon vs., MST Katiji [1987] 167 ITR 471 (SC) has laid down certain principles for condoning the delay and directed the lower courts to follow a lenient approach for condoning the delay. Going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra), there is no dispute if an appeal is dismissed on account of technicalities, a meritorious case may be thrown out of judicial review. Therefore, while condoning the delay, the courts must have a liberal approach or lenient approach considering the reasons given by the petitioners or appellants. Therefore, going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra) and also considering the submissions of the assessee that, notices issued by the 8 ITA.No.1477, 1478 & 1479/Hyd./2025 Assessing Officer are not come to the knowledge of the assessee because the said notices have been issued to the email ID provided in the IT-data base which is of an Accountant who was handling the case earlier and only after noticing the fact that the Assessing Officer passed the order and demand has been raised which come to the notice of the assessee only when the department has taken steps for recovery of the demand by attaching bank account, the assessee has taken steps to file the appeal before the learned CIT(A) which is beyond the control of the assessee and, therefore, the assessee has ‘reasonable and sufficient cause’ in not filing the appeals before the learned CIT(A) within the period of limitation. Therefore, we are of the considered view that, the learned CIT(A) is not justified in dismissing the appeals in limine without deciding the appeals on merits. We, therefore, condone the delay of 10 months and 27 days for assessment years 2016-2017 and 2022-2023 and 01 month and 01 day for the assessment year 2023-2024 in filing the appeals before the learned CIT(A). We find that, since, the assessment proceedings before the Assessing Officer are also 9 ITA.No.1477, 1478 & 1479/Hyd./2025 ex-parte and the assessee did not get any opportunity before the learned CIT(A) to represent its cases, in our considered view, the issue needs to be set-aside to the file of Assessing Officer for reconsideration. Thus, we set-aside the Orders of the learned CIT(A) and restore the issue back to the file of Assessing Officer for reconsideration. The Assessing Officer is directed to reconsider the issue de-novo, after providing one more opportunity of hearing to the assessee.
In the result, appeals of the Assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 09th day of January, 2026.