JANAKI RAM BABJI RAO ANNAM,VIJAYAWADA vs. INCOME TAX OFFICER, WARD 3(1), VIJAYAWADA

At the outset, it is observed from the record available before me that there is a delay of 11 days in filing the appeal before the 2 Tribunal. With respect to belated filing of the appeal, the assessee filed a petition for condonation of delay along with affidavit and the relevant paras of the affidavit are extracted herein below for reference: “……. I am presently staying with my son Sri Anil Kumar Annam at United States of America due to ill health. I have authorized my brother Sri Sarveswara Rao Annam to represent in the Income Tax proceedings with Authorization. My brother Sri Sarveswara Rao Annam met with an accident on 18/02/2024 and in Coma. Due to his medical condition he could not pursue my income tax proceedings and could not file the appeal before the ITAT, Visakhapatnam in time. After getting the information about the appellate order I approached Tax Consultant and there is a delay of 11 days in filing the appeal. As the delay is not intentional and due to my brother’s health condition whom I have given power of Attorney I request the Hon’ble ITAT to condone the delay and admit the appeal. ……”

On perusal of the explanation given by the assessee with respect to filing of the appeal before the Tribunal beyond the prescribed time limit, I find that the assessee was in abroad during the relevant period and has given Power of Attorney to his brother to look after the assessee’s tax matters. However, the assessee’s brother met with an accident and was hospitalized and therefore the assessee filed the appeal beyond the stipulated time limit and with a delay of 11 days. Therefore, I am of the view that this is a fit case to condone the delay since the reason adduced by the assessee constitutes a reasonable and sufficient cause. Accordingly, I hereby condone the delay of 11 days in 3 filing the appeal of the assessee before the Tribunal and proceed to adjudicate the appeal on merits.

Briefly stated the facts of the case are that the assessee is an individual filed his return of income electronically on 09/12/2017 declaring a total income of Rs. 3,49,950/- for the AY 2017-18. The return was processed U/s. 143(1) of the Act by the CPC on 24/12/2017. The case was selected for limited scrutiny through CASS to examine the sources for cash deposits made during the demonetization period. Thereafter, notice U/s. 143(2) of the Act dated 14/08/2018 was issued and the same was duly served on the assessee on 03/09/2018 through mail. Subsequently, notice U/s. 142(1) of the Act dated 20/05/2019 was issued to the assessee calling for certain details. As there was no response to the notices issued U/s. 142(1) of the Act, Ld. AO obtained the information from the Bank authorities U/s. 133(6) of the Act with regard to the cash deposits made in the assessee’s bank accounts. On verification of the bank account copies and the other material available before him, the Ld AO noticed that the assessee made cash deposits amounting to Rs. 24,31,000/- by way of Specified Bank Notes [“SBNs”]. Accordingly, another notice U/s. 142(1) of the Act was issued on 4 17/10/2019 however there was no compliance from the assessee. Considering the assessee’s no reply to the notices issued, the Ld. AO observed that he was left with no option but to finalize the assessment based on the information available on record as per the provisions of section 144 of the Act. During the assessment proceedings, in the absence of any explanation from the assessee with respect to the source of cash deposits made during the demonetization period, the Ld. AO treated the entire amount of Rs. 24,31,000/- deposited in his bank accounts during demonetization period as income of the assessee from unexplained sources as per the provisions of section 69A of the Act. Accordingly, the Ld. AO determined the assessed income of the assessee at Rs. 27,80,950/- and completed the assessment U/s. 143(3) of the Act, and passed the assessment order dated 19/12/2019. Further, the Ld. AO also initiated the penalty proceedings U/s. 271AAC of the Act for under reporting of income. Accordingly, show cause notice U/s. 271AAC(1) of the Act dated 23/12/2019 was issued to the assessee however there was no compliance from the assessee. Considering the assessee’s no response to the notices issued, the Ld. AO has computed the penalty as under: Addition U/s. 69A as per order Rs. 24,31,000

Before the Ld. CIT(A)-NFAC, the assessee filed the appeal with a delay of 351 days. With reference to the belated filing of the appeal, the assessee sought for condonation of delay and filed submissions wherein the assessee explained before the Ld. CIT(A)-NFAC that the delay was due to suffering of assessee with Bipolar disorder for which treatment is being taken from 2017 onwards. The assessee further submitted that due to acuteness of his health problem and as his residence in USA, he could not attend the notices and also could not file the appeal against the assessment order within the prescribed period. The assessee further submitted that considering his health problems, he has given Power of Attorney to his brother Sri Annam Lakshmaji Sarveswara Rao, who approached a tax consultant and filed appeal and hence there was a delay. However, the Ld. CIT(A)- NFAC did not consider the submissions of the assessee on the 6 issue of condonation of delay of 351 days and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal:

In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.