NANDYALA NAGA VENKATA RAJU,WEST GODAVARI DIST vs. INCOME TAX OFFICER, WARD-1, TANAKU

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 08.01.2025, which in turn arises from the order passed by the Assessing Officer

The notice issued u/s 148 is not in accordance with law and as such the learned Commissioner of Income Tax (Appeals) ought to have quashed the notice as invalid and consequently the learned Commissioner of Income Tax (Appeals) ought to have held that the entire reassessment proceedings are void-ab-initio.

Any other ground that may be urged at the time of appeal hearing.”

Succinctly stated, the A.O based on the information that though there were credits of Rs.14,56,41,000/- [including cash deposits] in the assessee’s bank account with ICICI Bank bearing account NO. 044005001458 but he had not filed his return of income for the subject year, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act dated 23.03.2021 was issued by the A.O. However, the assessee did not file his return of income.

On being queried, it was the claim of the assessee that the deposits in his aforementioned bank account pertained to the collection of the sale proceeds of fish purchased from the farmers, which were thereafter withdrawn and paid / transferred to the farmers after deducting his commission. Also, the assessee to substantiate his aforesaid claim had filed before the A.O details of fish farmers and the ledger extracts, confirmation letters, Aadhar and copy of ledger account of commission income. However, the A.O observed that assessee had under booked his commission by showing excess payment of the amounts given to fish farmers. Apart from that, the A.O observed that the claim of the assessee that he was in receipt of commission income from fish farmers was not supported with any documentary evidences i.e, invoice, bills, vouchers and details regarding the persons to whom the fish were sold. The A.O after considering the explanation of the assessee observed that the list of fish farmers furnished by him included ten children of age 13 to 19 years, to whom an amount of Rs.2,29,06,560/- was claimed to have been paid. As the assessee on being queried about the aforesaid issue had failed to come forth with any explanation, therefore, the A.O made an addition of the aforementioned amount of Rs.2,29,06,560/- as the assessee’s unexplained money under section 69A of the Act.

Apropos, the balance amount of Rs. 12,13,34,918/- [Rs.14,42,41,478/- – Rs.2,29,06,560/-] the A.O held the same as the business receipts of the assessee on Page. No 3

Shri G.V.N. Hari, Advocate, Learned Authorised Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of the appeal submitted that the same involves a delay of 176 days. Elaborating on the reasons leading to the delay, the Ld.AR submitted that the same had crept in for the reason that the assessee during the relevant period was suffering with multiple medical ailments i.e, hypertension and urinary tract infection which on becoming severe during the 3rd week of March, 2025 had left him with abdominal pain, fever and weakness. Elaborating further on his contention, the Ld.AR submitted that the assessee due to aforesaid medical ailments had remained under medical treatment and was advised to take complete bed rest. The Ld.AR submitted that as the assessee had remained under treatment during the period from 20.03.2025 to 21.09.2025, therefore, for the said reason he could not attend to his work and file the present appeal. It was submitted by him that the assessee had thereafter filed the appeal on 23.09.2025 which by the time involved a delay of 176 days. The Ld.AR to support his aforesaid contentions had taken us through the application for condonation of delay, dated 03.02.2026 and the supporting “affidavit”, dated 03.02.2026 filed by the assessee along with the copies of medical certificates. The Ld.AR based on the aforesaid facts, submitted that as the delay in filing of the Page. No 4

Per contra, Shri D. Hema Bhupal, Learned Senior departmental representative (for short “Ld. DR) objected to the seeking of condonation of the delay involved in filing of the present appeal.

We have given a thoughtful consideration to the explanation of the assessee regarding the delay involved in filing of the present appeal before us. In our view, as the assessee had substantiated by placing on record an “affidavit” along with the supporting medical certificates which reveals that he during the relevant period was suffering from certain medical ailments, therefore, we are of the view that in all fairness and interest of justice the delay involved in filing the present appeal merits condonation. Our aforesaid view that a liberal approach should be adopted while considering an application filed by an appellant seeking condonation of the delay involved in filing the same is supported by 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, wherein the Hon'ble Apex 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 the appeal. We thus, in Page. No 5

Shri G.V.N. Hari, Advocate, Learned Authorised Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of appeal submitted that the CIT(A) had grossly erred in law and facts of the case in carrying out piecemeal disposal of the appeal by failing to deal with all the specific grounds based on which the assessment was assailed before him. Elaborating on his contention, the Ld.AR submitted that the assessee as per “Ground of appeal No. 4” had specifically assailed the validity of the assessment framed by the A.O vide his order passed under section 147 r.w.s, 144 r.w., 144B of the Act, dated 15.03.2023, for the reason that though the notice under section 148 of the Act was issued with DIN dated 23.03.2021, but the same was served on 17.06.2021 through e-mail. Elaborating further on his contention, the Ld.AR submitted that, the assessee had specifically assailed the validity of the notice issued under section 148 of the Act on the ground that the A.O had erred in law in not taking recourse to the provision under section 148A(b) of the Act, but the CIT(A) had failed to advert to and adjudicate the said specific ground which, thus, had resulted to a piecemeal disposal of the appeal. Carrying his contention further, the Ld.AR submitted that though the CIT(A) had culled out the observations recorded by the A.O in the assessment order but had without adjudicating the aforesaid issue dismissed the appeal.

The Ld.AR submitted that considering the aforesaid facts, the matter in all fairness and interest of justice be set-aside to the file of the CIT(A) with a direction to Page. No 6

Per contra, Shri D. Hema Bhupal, Learned Senior Departmental Representative (for short “Ld. DR”) relied upon the orders of the authorities below.

We have given a thoughtful consideration to the contentions advanced by both the Learned Authorised Representatives and perused the orders of the authorities below and the material available on record.

Admittedly, it is a matter of fact discernible from the CIT(A) order that the assessee had vide “Ground of appeal No. 4” assailed before him the validity of the assessment on the ground that the notice under section 148 of the Act which was digitally signed and issued with DIN of 23.03.2021, was however served on 17.06.2021 through e-mail. In fact, we find that the aforesaid factual averment of the assessee had been accepted by the A.O at Page 3 / Para 7 of his order, that the assessee had assailed before him the validity of the assessment order passed by the A.O on the ground that he had failed to take recourse to the procedure for issuance of notice under section 148 of the Act as had been made available on the statute by the Finance Act, 2021 w.e.f, 01.04.2021 and thus, not conducted enquiry, and provided opportunity before issuing of the aforementioned notice, therefore, the assessment framed by him, was liable to be quashed for want of valid assumption of jurisdiction.

Be that as it may, we find that there is blatant failure on the part of the CIT(A) to adjudicate the aforesaid specific “Ground of appeal No. 4” based on which the Page. No 7

We thus, in terms of our aforesaid deliberations set-aside the matter to the file of the CIT(A) for the limited purpose of adjudicating the “Ground of appeal No. 4” as had been raised by the assessee before him.

In the result, appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.