PADMA RAO THIGULLA,HYDERABAD V. ITO., WARD 10(4), IT TOWERS, HYDERABAD

ITA 1160/HYD/2024

AI Insights

The case involves Shri Padma Rao Thigulla, who appealed against the order of the CIT (A)-NFAC Delhi, which dismissed his appeal as barred by limitation. The original dispute arose from the CPC's adjustment during the processing of Thigulla's income tax return for A.Y. 2017-18, where income from other sources was assessed significantly higher than declared. Thigulla contended that he was unaware of this adjustment until it affected a subsequent year's refund, leading to a delayed rectification petition and appeal due to non-receipt of the relevant orders and the COVID-19 pandemic. The Tribunal's decision to condone the delay and remand the case was based on the circumstances presented, including the non-receipt of digital communications and the pandemic's impact.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473247 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ SANCHERI
• Keywords: Condonation of delay; Salary income; TDS; Rectification of order; FORM 26AS
• Section: 154; 143(1); 194C

Judgement Text

" ITA No 1160 of 2024 Padma Rao Thigulla Page 1 of 8 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No.1160/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Shri Padma Rao Thigulla Hyderabad PAN:AISPT6695C Vs. Assessing Officer Ward 10(4) IT Towers Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri Pankaj Sancheri, CA राज̾ व Ȫारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 01/01/2025 घोषणा की तारीख/Pronouncement: 03/01/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal by the assessee is directed against the order dated, 30/09/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2017-18. 2. The assessee raised the following grounds: ITA No 1160 of 2024 Padma Rao Thigulla Page 2 of 8 3. At the time of hearing, the learned AR of the assessee submitted that the learned CIT (A) dismissed the appeal of the assessee in limine, due to barred by limitation, after declining the condonation of delay prayed by the assessee. The learned AR has pointed out that, the assessee filed return of income declaring total income at Rs.57,86,247/- comprising of income from salary at Rs.56,81,409/- and income from other sources (interest from Bank) of Rs.1,04,838/-. The CPC while processing the return of income u/s 143(1) of the Act has assessed the income from other ITA No 1160 of 2024 Padma Rao Thigulla Page 3 of 8 sources at Rs.50,50,505/-. The learned AR has further submitted that, the assessee did not receive the said order of the CPC passed u/s 143(1) and came to know about the said adjustment/ addition only when the demand for the year under consideration was adjusted against the refund of the subsequent year. The assessee immediately filed petition u/s 154 of the Act for rectification of the order on 21/02/2020. However, the same was dismissed by the CPC vide order dated 2/3/2020. The learned AR has pointed out that, even the rectification order u/s 154 was also not received by the assessee, and further due to the advent of Covid-19 pandemic, the assessee was not able to get the copy of the order passed u/s 154 of the Act, despite repeated requests and efforts made on behalf of the assessee. Finally, the assessee received the impugned order only on 13/10/2023 and thereafter, filed the appeal before the learned CIT (A). The learned AR has submitted that, the assessee has explained the cause of delay before the learned CIT (A) and narrated all the relevant facts, particularly, the non-receipt of order passed u/s 154 of the Act. The learned AR has submitted that, the addition made by the CPC is highly unjustified and arbitrary, as there was no such income earned by the assessee. However, an amount of Rs.50.00 lakhs was received as advance on 9/5/2016 which was subsequently refunded on 6/10/2018 and 12/10/2018 respectively. He has referred to the Bank Account statement of the assessee, regarding the transaction of the said amount and repayment of the same to the payer. Therefore, the assessee did not declare the said amount as income. Only because the payer has deducted the TDS u/s ITA No 1160 of 2024 Padma Rao Thigulla Page 4 of 8 194C (contract receipt), it appears that the addition was made on the basis of the TDS reflected in Form 26AS. The learned AR has further submitted that the CBDT has not given any reason for making this adjustment even in the order passed u/s 154 of the I.T. Act, 1961 and therefore, the assessee was not able to know the reasons for such an adjustment. Thus, the learned AR has pleaded that the delay of 503 days in filing appeal before the learned CIT (A) be condoned and the appeal of the assessee may be remanded to the record of the Assessing Officer for proper verification of the relevant facts on the point of receipt of amount of Rs.50.00 lakhs and subsequent repayment of the same. 4. On the other hand, the learned DR has objected to the condonation of delay and submitted that, the learned CIT (A) has considered the reasons explained by the assessee and found that, the assessee has failed to explain sufficient cause for the inordinate delay of 503 days. He has relied upon the impugned order of the learned CIT (A). 5. We have considered the rival submissions as well as the relevant material available on record. The assessee filed the return of income on 29/03/2018 declaring income under the head “income from salary” and “income from other sources”. The CPC while processing the return of income on 27/05/2019 has made an adjustment and assessed the income from other sources at Rs.50,50,505/- as against the income declared by the assessee under the head “income from other sources” at Rs.1,04,838/-. On ITA No 1160 of 2024 Padma Rao Thigulla Page 5 of 8 21/02/2020, the assessee filed a rectification petition with the CPC which was disposed of vide order dated 2/3/2020 maintaining the original order u/s 143(1) without giving any relief to the assessee. The assessee thereafter, filed the appeal before the learned CIT (A) on 28/10/2023 after a delay of 503 days. The learned CIT (A) has declined to condone the delay of 503 days in filing the appeal and dismissed the appeal of the assessee being not maintainable. The assessee has an affidavit to explain the reasons for delay in filing the appeal which reads as under: “AFFIDAVIT STATING FACTS FOR ALLEGED DELAY IN FILING OF APPEAL BEFORE CIT(A) I, Padma Rao Thigulla, having PAN no AISPT6695C, do hereby solemnly affirm and state as follows: 1. That I am the Assessee in this case and fully conversant with the facts and circumstances of the matter appeal pertain to the Assessment Year 2017-18 (AY). 2. Based on the date mentioned on the Rectification Order passed u/s 154 of the Act ('Order'), there has been a delay of 503 days in filing the appeal before the Commissioner of Income Tax (Appeals) (\"CIT(A)Y\"), for which I have requested the CIT(A) to condone the delay. 3. The delay was neither willful nor deliberate but was due to the reasons beyond my control. For the AY, | filed my Income Tax Return on 29th March 2018 but was not communicated about the issuance of the Intimation Order u/s 143(1) of the Income tax Act, 1961 ('Act') either by post or email or on the IT portal or message. However, on finding a demand outstanding on the IT Portal with no further details, my CA filed a rectification request u/s 154 of the Act. 4. I, through my CA, on multiple times visited the IT jurisdictional office and requested for (inter alia via email) correction/Order, but to no avail and the situation further complicated by the covid lockdown. I also raised a grievance on the IT portal. Eventually, on multiple follows ups, a kind jurisdictional officer provided a physical copy of the Rectification Order on 14th October 2023. ITA No 1160 of 2024 Padma Rao Thigulla Page 6 of 8 5. Upon receiving the Order and understanding the reason for the demand, I promptly filed the appeal on 28th October 2023. 5. I, That I have always acted as a law-abiding citizen and have been committed to fulfilling all my legal and tax obligations. The alleged delay in filing the appeal before CIT(A) was due to lack of communication. There was no intention to disregard the legal process, and I have made every effort to address the issue as soon as I became aware of it. I, hereby confirm that the contents of the affidavit are true and correct to the best of my personal knowledge, information and belief. Yours Truthfully Padma Rao Thgulla Date: 21-12-2024” 6. Thus, the assessee has explained the cause of delay as the order passed by the CPC u/s 143(1) as well as u/s 154 of the I.T. Act, 1961 were not received by the assessee, despite repeated efforts and only on 14/10/2023 the said order passed u/s 154 was supplied to the assessee. The Department has not disputed the fact that, the orders of the CPC were not sent physically to the assessee, but were sent to the registered email ID of the assessee with the ITBA Portal of the Revenue. It is pertinent to note that the order u/s 154 on 2/3/2020 was passed during the Covid pandemic period and therefore, in view of the judgment of the Hon'ble Supreme Court writ petition in Miscellaneous Appeal No.21/2022 taking suo motto cognizance for extending delay during the covid period, the limitation was extended up to 28/02/2022 and thereafter a period of 90 days was allowed to file appeal/petition/suit etc., where the limitation expired during the ITA No 1160 of 2024 Padma Rao Thigulla Page 7 of 8 covid period i.e. 15/03/2020 to 28/02/2022 for taking appropriate steps for filing petitions/appeals etc. Prima facie, it appears that the CPC has made addition on account of the amount of Rs.50.00 lakhs received by the assessee against which TDS u/s 194C was deducted. However, in the subsequent year, the said amount was refunded by the assessee to the payer which is duly reflected in the bank account statement of the assessee. Therefore, if the assessee’s case is not examined on merit, it would result in gross injustice for assessing the income which was not earned by the assessee. Accordingly, when the reasons explained by the assessee are not disputed by the Department that the impugned orders of the CPC passed u/s 143(1) as well as u/s 154 of the I.T. Act, 1961 were not served on the assessee physically and the assessee has explained that he could not even receive these orders digitally, then we find that the assessee has explained a sufficient cause for the delay in filing the appeal before the learned CIT (A). Accordingly, in the facts and circumstances of the case and in the interest of justice, we condone the delay of 503 days in filing the appeal before the learned CIT (A). 7. Since the learned CIT (A) has not decided the appeal of the assessee on merit, but the same was dismissed in limine, on the ground of barred by limitation therefore, the matter is hereby remanded to the record of the Assessing Officer to verify the fact regarding the receipt of the said amount of Rs.50.00 lakhs as well as refund of the same by the assessee and then decide the issue ITA No 1160 of 2024 Padma Rao Thigulla Page 8 of 8 after giving an opportunity of hearing to the assessee. Needless to mention that, the assessee shall furnish all the requisite details before the Assessing Officer as and when called for without seeking any adjournment. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 3rd January, 2025. Sd/- Sd/- (MANJUNATHA, G) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 3rd January, 2025 Vinodan/sps Copy to: S.No Addresses 1 Shri Padma Rao Thigulla, 7-2-252 Takara Basti, Ashoknagar, Secunderabad 500003 Telangana 2 Assessing Officer, Ward 10(4) IT Towers, AC Guards, Hyderabad 500004 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "