NARAYANA RAO SUJATHA ,CHAMARAJANAGAR V. INCOME TAX OFFICER, WARD-1 , CHAMARAJANAGAR

ITA 803/BANG/2025

AI Insights

This case involves an appeal by Narayana Rao Sujatha against the order passed by the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The primary contention revolves around the reassessment notice issued under section 148 of the Income Tax Act, which the assessee challenged as being unjustified and procedurally improper. The Tribunal noted that the initial assessments and subsequent orders were passed ex parte, without the participation of the assessee, largely due to her health issues and the pandemic's impact on her ability to engage with the electronic filing system. The Tribunal found merit in the assessee's arguments regarding the procedural lapses and the substantive issues raised about the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712665 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE; STANDING
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Condonation of delay; Set aside; Reassessment proceedings; Principle of natural justice; Reason to believe; Tangible material
• Section: 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 803/Bang/2025 Assessment Year: 2017-18 Narayana Rao Sujatha, Sigewadi Farm, Begur Hobli, Gundlupet Taluk, Chamarajanagar – 571 101. PAN – ADVPN 3969 K Vs. The Income Tax Officer, Ward - 1, Chamarajanagar. . APPELLANT RESPONDENT Assessee by : Shri R Chandrashekar, Advocate Revenue by : Shri Ganesh R Ghale, Advocate for Standing Counsel Date of hearing : 26.06.2025 Date of Pronouncement : 30.07.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 09/05/2023 in DIN No. ITBA/NFAC/S/250/2024-25/1052679801(1) for the assessment year 2017-18. 2. The assessee raised following grounds of appeal: “1. The order of the authorities below in so far as it is against the appellant is opposed to law, equity and weight of evidence, probabilities, facts and circumstances of the case. Printed from counselvise.com ITA No.803/Bang/2025 Page 2 of 6 . 2. The appellant denies herself liable to be assessed to a total income of Rs.15,25,000/- for the impugned assessment year 2017-18 on the facts and circumstances of the case. 3. The learned CIT(A) should have provided another opportunity of hearing in the interest of natural justice and equity on the facts and circumstances of the case 4. The learned assessing officer was not justified in issuing a notice under section 148 of the Act, when the time limit to issue notice under section 143(2) of the Act has not lapsed for the relevant assessment year on the facts and circumstances of the case. 5. The learned assessing officer has failed to appreciate that the cash deposits I made pertains to agricultural income and no additions was warranted on the facts and circumstances of the case. 6. The authorities below have failed to appreciate that the power to invoke the rigours of section 69A of the Act, on the facts and circumstances of the case. 7. The authorities below have failed to appreciate that the power to invoke the provisions of section 69A of the Act is directory and not mandatory on the facts and circumstances of the case. 8. The appellant denies the liability to pay interest under section 234 of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied is not discernible from the order and hence deserves to be cancelled on the facts and circumstances of the case. 9. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 10. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest on justice and equity.” 3. This appeal has been filed by the assessee with a delay of 633 days against the order passed under section 250 of the Income-tax Act, 1961. The assessee has moved an application for condonation of delay supported by a sworn affidavit and supporting medical records, including prescriptions and bills, which are placed on record. 4. We have perused the contents of the affidavit filed by the assessee, Ms. Narayana Rao Sujatha, and considered the reasons Printed from counselvise.com ITA No.803/Bang/2025 Page 3 of 6 . explained for the delay in filing the present appeal. The assessee is an elderly agriculturist residing alone in a remote village of Gundlupet Taluk, and she has limited exposure to the electronic filing system and communication through the E-filing Portal. The affidavit explains that the assessee was suffering from age-related health issues and had also faced difficulties due to the Covid-19 pandemic, as a result of which she was unable to travel frequently or coordinate effectively with her Chartered Accountant, who was based in Bangalore. These reasons have been substantiated by medical records and prescriptions, which lend credibility to the claim of ill health and limited mobility. 5. It is also noted that the appeal was dismissed ex-parte by the ld. CIT(A) on account of non-compliance, and the order was uploaded on the E-filing portal. The assessee has explained that she was not aware of the order due to poor connectivity and unfamiliarity with the portal. She assumed in good faith that her Chartered Accountant was handling the matter. The assessee came to know about the final order only after receiving a communication from the Department regarding the outstanding demand, and she promptly took steps to file the appeal through another Chartered Accountant based at Mysore. 6. The reasons stated appear to be genuine and have not been rebutted by any contrary material from the Revenue. The delay does not appear to be deliberate or intentional. The explanation offered by the assessee is reasonable and establishes a case of bona-fide and sufficient cause for the delay. The Hon’ble Supreme Court in several decisions has held that substantial justice should not be denied on account of technicalities where the delay is neither intentional nor mala-fide. Printed from counselvise.com ITA No.803/Bang/2025 Page 4 of 6 . 7. Considering the facts and circumstances of the case, the medical documents available on record, and the principle of natural justice, we are inclined to condone the delay in filing the appeal. Accordingly, the delay of 633 days in filing the appeal is condoned. The appeal is admitted for adjudication on merits. 8. The assessee vide letter dated 13-03-2025 has also filed additional ground of appeal which reads as under: “1. Grounds on reopening: a. The notice issued under section 148 of the Act is bad in law. b. The order of reassessment is further bad in law and void ab initio as the learned assessing officer had no reason to believe that the income of the Appellant has escaped assessment and the reasons amounted to merely reasons to suspect, on the facts and circumstances of the Appellant's case. c. That there is no tangible material available with the learned assessing officer to substantiate that there is escapement of income in the hands of appellant on the facts and circumstances of the case. d. That there is no sanction accorded under section 151 of the Act. Without prejudice, the sanction if accorded, is without application of mind and based on surmises and conjectures on the facts and circumstances of the case. 2. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 3. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest on justice and equity. 9. At the outset, we note that the orders passed by the Assessing Officer (AO) and the learned CIT(A) were ex parte, without the participation of the assessee. The assessment order was passed on 27th September 2021, during the COVID-19 pandemic. We further note that the reassessment proceedings under section 148 of the Act were initiated through a notice dated 18th February 2020, just before Printed from counselvise.com ITA No.803/Bang/2025 Page 5 of 6 . the nationwide lockdown was imposed due to the pandemic. Therefore, the non-appearance of the assessee during the assessment proceedings appears to be reasonable and justifiable under the circumstances. 10. We also note that the assessee, due to ill health, could not comply with the notices issued by the learned CIT(A). At the time of hearing before us, the learned Authorised Representative (AR) appeared and undertook the responsibility to ensure necessary compliance on behalf of the assessee. He requested that the assessee be granted one more opportunity to present her case. It was also brought to our notice that validity of the proceedings have been challenged through a separate additional ground of appeal filed before us. However, the learned Departmental Representative (DR) opposed the admission of the additional ground, and vehemently argued that the assessee was negligent in pursuing her income-tax matters. The ld. DR submitted that the appeal deserves to be dismissed on that ground. 11. Considering the above facts and in the interest of justice, we deem it appropriate to set aside the matter to the file of the AO for fresh adjudication, in accordance with law. The AO shall provide a reasonable opportunity to the assessee to present her case during the proceedings. The assessee shall not seek any adjournment without just cause and extend full cooperation during the proceedings. Hence the ground of appeal of the assessee is hereby allowed for statistical purposes. Printed from counselvise.com ITA No.803/Bang/2025 Page 6 of 6 . 12. In the result, the appeal of the assessee is hereby partly allowed for statistical purposes. Order pronounced in court on 30th day of July, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 30th July, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore Printed from counselvise.com "