Poreddy Srinivasa Reddy, Karimnagar, Hyderabad V. ITO, Ward-3, Karimnagar, Karimnagar

ITA 771/HYD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1371 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-10-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Opportunity of being heard; Reasonable cause; Assessment record; Condonation of delay
• Section: 142(1); 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE S MT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S . RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 771 /HYD/201 7 ASSESSMENT YEAR: 20 0 5 - 0 6 POREDDY SRINIVASA REDDY , KARIMNAGAR PA N A RAPR6287H VS. INCOME - TAX OFFICER, WARD 3 , HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SMT. S. PRAVEENA DATE OF HEARING : 04 - 1 0 - 201 8 DATE OF PRONOUNCEMENT : 29 - 11 - 201 8 O R D E R PER S . RIFAUR RAHMAN, A .M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 10 , HYDERABAD, DATED 2 1 / 1 0 /201 6 FOR AY 20 0 5 - 0 6. 2. BRIEF FACTS OF THE CASE ARE, ASSESS MENT WAS REOPENED BASED ON TH E DIRECTIONS OF CCIT 2, HYDERABAD BY ISSUE OF NOTICE U/S 142(1) DATED 16/08/2017 AND DULY SERVED ON THE ASSESSEE. SINCE THERE WAS NO RESPONSE FROM THE ASSESSEE, ASSESSMENT WAS COMPLETED EX - PARTE U/S 144 OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) BY MAKING AN ADDITION OF RS. 35,74,530/ - , WHICH WAS DEPOSITED IN ASSESSEES SB ACCOUNT OF STATE BANK OF HYDERABAD DURING THE FY 2004 - 05 RELEVANT TO THE AY 2005 - 06. 2 ITA NO. 771 /HYD/201 7 POREDDY SRINIVASA REDDY, KARIMNAGAR. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH A DEL AY OF 731 DAYS AND THE SAME WAS DISMISSED BY THE CIT(A). 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE PREFERRED APPEAL BEFORE THE ITAT AND THE ITAT REMITTED THE CASE BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO DISPOSE OF THE APPEAL AFRESH AFTE R GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ALSO, THE LD. CIT(A) WAS DIRECTED TO PASS A SPEAKING ORDER ON THE ISSUE OF DELAY AND THEREAFTER, IF NEED BE, ON THE MERITS IN ACCORDANCE WITH LAW. 5. THE LD. CIT(A) GAVE AN OPPORTUNITY TO THE ASS ESSEE AND ACCORDINGLY ASSESSEE FILED AN AFFIDAVIT ALONG WITH THE PETITION U/S 249(3) OF THE ACT, FOR CONDONATION OF DELAY, WHICH IS EXTRACTED AS UNDER: PETITION FILED UNDER SECTION 249(3) OF INCOEM TAX ACT,1961 FOR CONDONATION OF DELAY OF ABOUT 761DAYS IN FILING THE APPEAL AT THE OUTSET THE APPELLANT RESPECTFULLY SUBMITS THAT THERE WAS NO DELAY IN FILING THE APPEAL BEFORE THE HON'BLE CIT(A) IN THE EARLIER ROUND OF PROCEEDINGS, T HE SUBMISSION OF THE APPELLANT IS THAT HE WAS NOT SERVED WITH THE SHOW CAUSE NOTICE DURING THE COURSE OF ASSESSMENT OR WITH THE ASSESSMENT ORDER THEREAFTER. IT IS SUBMITTED THAT THE APPELLANT DURING THE PERIOD OCTOBER 2007 TILL MARCH 2008 WAS NOT IN HIS VILLAGE AS HE WAS UNDERGOING TREATMENT FOR ACUTE PATH IN ABDOMEN WHICH WAS THE RE SINCE QUITE SOME TIME. THE APPELLANT ABDOMEN PAIN WAS DIAGNOSED TO HAVE LEFT RENAL CALCULUS OF SIZE 1.8CM WITH MILD LEFT HYDRONEPHROSIS (STONE IN KIDNEY) AND WAS OPERATED FOR THE SAME ON 21.11.2007 AT YASHODA SUPER SPECIALTY HOSPITALS, MALAKPET, AND HYD ERABAD. HE WAS DISCHARGED ON 26.11.2007 AND WAS LIVING IN HYDERABAD TILL MARCH 2008 AS THE PAIN PERSISTED AND HE WAS TAKING ADVICE OF THE DOCTORS TILL HE COULD COMPLETELY RECOVER FROM THE SURGERY. AS A MATTER OF FACTS THE APPELLANT IS STILL HAVING PROBLEM ON ACCOUNT OF INCISIONS AND STITCHES ON ACCOUNT OF SURGERY. A COPY DISCHARGE SUMMARY IS ENCLOSED HERETO. IT NEEDS TO BE MENTIONED HERE THAT THE OPERATION WAS FUNDED BY CMRF (CHIEF MINISTER RELIEF FUND) AND ALL THE ORIGINAL COPIES RELATING TO TREATMENT W ERE SUBMITTED TO STATE GOVERNMENT AND ARE NOT PRESENTLY AVAILABLE WITH THE APPELLANT. BUT NECESSARY 3 ITA NO. 771 /HYD/201 7 POREDDY SRINIVASA REDDY, KARIMNAGAR. DETAILS WHICH WOULD BE AVAILABLE WITH YASHODA HOSPITALS AND CAN ALWAYS BE CROSS VERIFIED BY SUMMONING THE SAME FROM THEM. IT IS RESPECTFULLY SUBMITTED TH AT THIS IS PRECISELY THE REASONS WHY THERE WAS AN EXPARTE ASSESSMENT ORDER. THE APPELLANT BEING UNEDUCATED WAS NOT AWARE OF THE INCOME TAX PROCEEDINGS AND DID NOT FOLLOW UP THE MATTER. LATE ON IN OR ABOUT JANUARY 2010 WHEN THE DEPARTMENT PURSUED THE DEMAND , THE APPELLANT OBTAINED CERTIFIED COPY OF THE ORDER AND FILED APPEAL BEFORE THE ID. CIT (A) ON 02.03.2010 WITHIN THE TIME PRESCRIBED. IT IS THEREFORE SUBMITTED THAT THERE IS NO DELAY IN FILING THE APPEAL. WITHOUT PREJUDICE TO THE ABOVE CONTENTION OF TH E APPELLANT, IF THE HON'BLE CIT (A) STILL FEELS THAT THERE IS A DELAY IN FILING THE APPEAL, THE APPELLANT SUBMITS THE FOLLOWING REASONS FOR THE ALLEGED DELAY IN FILING THE APPEAL. AS NARRATED ABOVE, THE APPELLANT AFTER BEING OPERATED FOR A STONE IN KIDN EY HAS COME TO HIS VILLAGE IN THE MONTH OF MARCH 2008. HOWEVER, NOT BEING AWARE OF THE INCOME TAX PROCEEDINGS, HE COULD NOT FOLLOW UP THE MATTER WITH THE ASSESSING OFFICER. LATER ON IN OR AROUND JANUARY 2010 WHEN HE RECEIVED NOTICE FOR PAYMENT OF DEMAND, H E APPROACHED HIS TAX CONSULTANT. THEREAFTER, THE APPELLANT APPLIED FOR CERTIFIED COPY AND FILED APPEAL BEFORE THE CIT (A) ON 2/3/2010. IN THE ORDER OF ID. CIT (A) IT IS NOTED THAT THE REGISTERED POST SENT BY THE OFFICE OF ASSESSING OFFICER AND IT WAS RE TURNED ON 18.02.2008 AS REFUSED. IT IS SUBMITTED THAT THIS TOTALLY INCORRECT AS THE APPELLANT WAS NOT AT HOME TO REFUSE THE REGISTERED POST. IN FACT THE REPORT OF INSPECTOR TO THE EXTENT OF A BSENCE OF APPELLANT SUBSTANTIATES THE FACT THAT APPELLANT WAS NOT AVAILABLE AT HOME ON ACCOUNT OF HIS MEDICAL TREATMENT AT HYDERABAD. HOWEVER, IT IS SUBMITTED THAT THE REPORT OF INSPECTOR TO THE EXTENT OF AFFIXING THE ASSESSMENT ORDER, DEMAND NOTICE AND CHALLAN APPEARS TO BE NOT CORRECT FOR THE FOLLOWING REASON. IT IS S UBMITTED THAT THE REGISTERED POST SENT BY THE OFFICER OF ASSESSING OFFICER WAS RETURNED TO DEPARTMENT ONLY ON 18.02.2008, THAT BEING THE CASE THE ACTION OF THE INSPECTOR IN AFFIXING THE ASSESSMENT ORDER AND DEMAND NOTICE EVEN BEFORE THE RETURN OF THE REGIS TERED POST APPEARS TO BE QUITE STRANGE AND APPEARS TO BE CONCOCTED. THE INSPECTOR COULD NOT HAVE PRESUMED THAT THE REGISTERED POST WOULD NOT BE SERVED AND HE COULD NOT HAVE AFFIXED THE ASSESSMENT ORDER AND DEMAND - NOTICE ON 28._1.2008 ON THE DOOR OF THE APP ELLANT WHEN HE VERY WELL KNEW THAT THE APPELLANT WAS ABSENT FROM SUCH ADDRESS. 4 ITA NO. 771 /HYD/201 7 POREDDY SRINIVASA REDDY, KARIMNAGAR. IT IS SUBMITTED THAT THE APPELLANT HAS NOT RECEIVED ANY NOTICE OR ASSESSMENT ORDER AFTER HE RETURNED TO HIS VILLAGE IN MARCH 2008 EXCEPT THE ONE WHICH WAS RECEIVED IN JANUAR Y 2010. THEREFORE, IT IS SUBMITTED THAT EVEN IF THERE IS ANY DELAY IT IS ONLY ON ACCOUNT OF THE FACT THAT THE APPELLANT WAS NOT AWARE OF THE ASSESSMENT ORDER BEING PASSED TILL JANUARY 2010. IN THE AFORESAID CIRCUMSTANCES, IT IS PRAYED THAT EVEN IF THE HON' BLE CIT (A) CONSIDERS THAT THERE IS A DELAY OF ABOUT 761 DAYS IN FILING THE APPEAL, THE SAME MAY KINDLY BE CONDONED IN VIEW OF THE FACTS NARRATED ABOVE. IT IS SUBMITTED THAT THE DELAY, IF ANY, IS NOT WI L LFUL BUT FOR THE REASONS NARRATED ABOVE. * IN THE AFORESAID CIRCUMSTANCES IT IS PRAYED THAT THE HONBLE CIT(A) MAY BE PLEASED TO CONDONE THE DELAY OF ABOUT 761 DAYS IN FILING THE APPEAL. 6. AFTER CONSIDERING THE AFFIDAVIT AND INFORMATION AVAILABLE ON ASS ESSMENT RECORD, THE CIT(A) CAME TO THE CONCLUSION THAT ASSESSEE HAS NOT ACCEPTED THE LETTER SENT BY THE AO ON 09/01/2008, WHICH CONTAINED THE DEMAND NOTICE, ASSESSMENT ORDER, PENALTY NOTICE U/S 271(1)(C). SINCE THE ASSESSEE HAS REFUSED TO ACCEPT THE ABOVE LETTER DELIBERATELY AND THE SAME LETTERS WERE SENT ON 18/02/2008 ALSO WERE RETURNED AS REFUSED. AS THE CIT(A) HAS NOT CONVINCED WITH THE REASONS GIVEN IN AFFIDAVIT, THE APPEAL WAS DISMISSED IN - LIMINE. 7. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE IS IN APPE AL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS BOTH ON FACTS AND IN LAW IN SO FAR AS IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN NOT CONDONING THE DELAY IN FILING THE APPEAL IN SPITE OF REASONABLE CAUSE AND GOOD CASE ON MERITS CONTRARY TO THE DECISION OF THE SUPREME COURT IN THE CASE OF KATIJI AND OF A.P. HIGH COURT IN THE CASE OF SURYA GENERAL TRADERS . 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT LD. CIT(A) HAS DISMISSED THE APPEAL WITHOUT CONDONING THE DELAY AND THE REASONS GIVEN ARE MOSTLY AVAIL ABLE ON THE ASSESSMENT RECORDS IN THE FIRST ROUND OF APPEAL ALSO. ASSESSEE HAS FILED AN AFFIDAVIT THAT HE WAS NOT WELL DURING THE PERIOD OF SERVICE 5 ITA NO. 771 /HYD/201 7 POREDDY SRINIVASA REDDY, KARIMNAGAR. OF NOTICE. FURTHER, WE NOTICE THAT LD. CIT(A) HAS NOT DISPOSED OF THE APPEAL ON MERITS. WE FURTHER NOTICE TH AT ASSESSEE WAS NOT WELL AS WELL AS NOT AWARE OF THE INCOME - TAX PROCEDURES AND THAT IS THE REASON, HE HAS NOT GIVEN ANY IMPORTANCE TO THE COMMUNICATION FROM THE AO. THEREFORE, WE DO NOT THINK THAT THE ASSESSEE HAS DELIBERATELY DELAYED IN FILING THE APPEAL AND PROCEEDED WITH THE ABOVE. FOR THE SAKE OF JUSTICE, WE REMIT THIS MATTER BACK TO THE FILE OF CIT(A) WITH A DIRECTION TO DISPOSE OF THE APPEAL ON MERITS AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER , 2018. SD/ - S D/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 29 TH NOVEMBER , 2 018. KV COPY TO: - 1) POREDDY SRINIVASA REDDY, KARIMNAGAR, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2) ITO, WARD 3 , KARIMNAGAR 3) CIT(A) 10 , HYDERABAD. 4) PR. CIT 2 , HYD . 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE