PRASANTH PUTTAMAREDDY,NELLORE V. INCOME TAX OFFICER, WARD-1, NELLORE

ITA 1555/HYD/2025

AI Insights

The case involves two appeals by Prasanth Puttamareddy against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2016-17. The appeals were related to the best-judgment assessment order under Section 147 r.w.s. 144 of the Income Tax Act, 1961, and the penalty under Section 271(1)(c) of the Act. The primary issue was the non-response of the assessee to notices due to his absence from India, as he had moved to the USA and was unaware of the proceedings until informed by relatives. The ITAT found the assessee's reasons for the delay in filing the appeals to be bona fide and reasonable, leading to the decision to set aside the matter for re-evaluation by the A.O.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792213 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 27-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reasonable cause; Unexplained investment; TDS; FORM 26AS
• Section: 147; 148; 271(1)(c); 69

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “SMC” Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.Nos.1554 and 1555/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2016-17) Prasanth Puttamareddy, R/o. Nellore. PAN : AOEPP7357R. Vs. The Income Tax Officer, Ward – 1, Nellore. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri M.V. Prasad, C.A. राजस्व का प्रतततितित्व/ Department Represented by : Shri D. Praveen, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 19.11.2025 घोर्णध की तधरीख/ Date of Pronouncement : 03.12.2025 O R D E R PER MANJUNATHA G., A.M : These appeals filed by the assessee are directed against the separate orders of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [in short “NFAC”], Delhi, dated 29.07.2025 passed under Section 147 r.w.s. 144 of Printed from counselvise.com 2 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy the Income Tax Act, 1961 and Section 271(1)(c) of the Act, relating to the assessment year 2016-17. Since common issues are involved in these two appeals, they were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. 2. First, we take up assessee’s appeal for A.Y. 2016-17 in ITA No.1554/Hyd/2025. 3. The brief facts of the case are that, information was received on the ITBA system and Insight Portal that the assessee had purchased an immovable property of Rs. 79,25,704/- during the financial year 2015-16, for which TDS was deducted under Section 194IA of the Income-tax Act, 1961. It was further noticed that, the assessee had not filed the return of income for the assessment year 2016-17, and in the absence of return of income, the source of investment towards purchase of the property remained unexplained. The A.O. issued notice under Section 148 of the Act and also issued several statutory notices under Sections 142(1), 144B(1)(ix) and centralized communication, but the assessee did not respond to any of the notices and remained Printed from counselvise.com 3 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy completely non-responsive. Based on information from the Insight Portal, Form 26AS, and the report from seller i.e., M/s Casagrand Premier Builder Ltd. obtained under Section 133(6), the A.O. noticed that, the property was jointly held by the assessee and his wife and that the assessee had paid Rs. 81,60,303/- towards the purchase consideration. Since the assessee failed to appear or explain the source of investment despite repeated opportunities, the A.O. passed a best-judgment assessment order under Section 147 r.w.s. 144 r.w.s. 144B of the Act and made an addition of Rs. 40,80,152/- as unexplained investment under Section 69 of the Income-tax Act. 4. Aggrieved with the assessment order, the assessee preferred appeal before the Ld. CIT(A). 5. Before the Ld. CIT(A), the assessee had filed an appeal with a delay of 332 days and explained the reasons for the delay in filing of the appeal, as per which, the assessee is an NRI and had left India on 21.04.2016 and had not come back from the USA till date. Therefore, the notice issued by the A.O. during the assessment proceedings was not received by the assessee, and because of this, the assessee could not represent before the A.O. Printed from counselvise.com 4 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy and could not file the appeal within the time allowed under the Act. To this effect, the assessee submitted that, since he was out of the country during the relevant period, the delay in filing of the appeal was neither intentional nor deliberate. The Ld. CIT(A), however, dismissed the appeal in ‘limine’ without condoning the delay and held that, the reasons given by the assessee did not come under ‘reasonable cause’ as provided under the Act. 6. Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal. 7. The learned counsel for the assessee Shri M.V. Prasad, C.A. submitted that, the assessee, being an NRI, could not receive the notices issued by the A.O. as he had left India on 21.04.2016 and had not returned. It was submitted that, the notice was served on relatives, and only thereafter, the assessee became aware of the proceedings and approached the office to file the appeal, resulting in a delay of 332 days. It was contended that, the delay was neither deliberate nor intentional and is supported by bona fide reasons. It was further submitted that, the Ld. CIT(A) ought to have condoned the delay and decided the issue on merits, and Printed from counselvise.com 5 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy prayed that, the delay be condoned and the appeal be restored to the file of the A.O. for de novo consideration. 8. The learned Sr. A.R. for the Revenue, Shri D. Praveen, on the other hand, supporting the order of the Ld. CIT(A), submitted that, notices were issued to the last known address of the assessee, and therefore, the non-appearance cannot be taken as a sufficient cause for condoning such a long delay. It was submitted that, the Ld. CIT(A) has rightly dismissed the appeal in ‘limine’ as the reasons given by the assessee did not constitute reasonable cause. It was further contended that, the A.O. had passed the assessment order based on the material available on record and after issuing statutory notices, and therefore, the order requires no interference. 9. We have heard both sides, perused the material available on record and had gone through the orders of the authorities below. We find that, the assessee is an NRI and left India for the purpose of employment in the year 2016 and did not come back up to the date when the A.O. has passed the order. However, when the notice server try to serve notice on his relative, he came to know about the income tax proceedings and thus, approached to file Printed from counselvise.com 6 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy appeal, and in that process, there is a delay of 332 days. Since the assessee was out of the country and was not present during the relevant period, in our considered view, the explanation offered by the assessee for not filing the appeal before the Ld. CIT(A) is bona fide and does come under reasonable cause. Thus, the Ld. CIT(A) ought to have condoned the delay and decided the issue on merits. Since the Ld. CIT(A) dismissed the appeal in ‘limine’ without deciding the appeal on merits, the matter needs to be set aside to the file of the A.O. Thus, we condone the delay in filing of the appeal before the Ld. CIT(A) and restore the issue back to the file of the A.O. to reconsider the issue de novo in accordance with law. The assessee is directed to furnish relevant evidences in support of his case as and when the case is posted for hearing. 10. In the result, the appeal of the assessee is allowed for statistical purposes. ITA No.1555/Hyd/2025 for A.Y. 2016-17. 11. The present appeal filed by the assessee is consequential to the appeal filed by the assessee in ITA No. 1554/Hyd/2025 for A.Y. 2016-17. The A.O. levied penalty under Section 271(1)(c) of Printed from counselvise.com 7 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy the Income-tax Act, 1961 on the addition made towards investment for purchase of property under Section 69A of the Act, and the penalty order under Section 271(1)(c) was passed vide order dated 22.08.2024. 12. Once again, the assessee has filed the appeal against the penalty order passed under Section 271(1)(c) with a delay of 120 days and explained the very same reason that he is out of the country and only after knowing the fact that the relatives informed him about the notice, he went to the office and filed the appeal and in that process, it has resulted in delay of 120 days. The Ld. CIT(A) on the very same reasons dismissed the appeal filed by the assessee without condoning the delay and held that, the reasons given by the assessee do not come under ‘reasonable cause’ as provided under the Act. 13. Aggrieved with the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 14. The learned counsel for the assessee submitted that, the delay of 120 days occurred only because the assessee was out of the country and came to know about the notice when relatives Printed from counselvise.com 8 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy informed him about the proceedings. It was submitted that, the delay was neither intentional nor deliberate and that the Ld. CIT(A) should have condoned the delay and decided the issues on merits. It was further submitted that, the penalty under Section 271(1)(c) is purely consequential in nature and cannot survive since the quantum assessment in ITA No. 1554/Hyd/2025 has been restored to the file of the A.O. for de novo consideration. 15. The Learned Senior A.R. for the Revenue, on the other hand, opposed the petition filed by the assessee for condoning the delay in filing of the appeal and argued that the assessee had filed the appeal with a delay of 120 days, for which the reasons given by the assessee do not come under sufficient cause as provided under the Act and that the Ld. CIT(A) has rightly dismissed the appeal in ‘limine’. 16. We have heard both sides, perused the material available on record, and had gone through the orders of the authorities below. We find that an identical order of the Ld. CIT(A) dismissing the appeal filed by the assessee for delay in filing arose in the assessee’s own case in ITA No. 1554/Hyd/2025, where under an Printed from counselvise.com 9 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy identical set of facts we condoned the delay in filing of the appeal and restored the issue to the file of the A.O. for reconsideration. Since the present appeal pertains to penalty under Section 271(1)(c) of the Income Tax Act, 1961, and this is consequential to the assessment order passed by the A.O. under Section 147 r.w.s. 144 of the Act, and further, the assessment proceedings have been set aside to the file of the A.O., the present penalty levied by the A.O. cannot stand on its own. Therefore, we condone the delay in filing of the appeal before the Ld. CIT(A) and restore the issue back to the file of the A.O. for reconsideration of the issue de novo in accordance with law. The A.O. is directed to consider the penalty under Section 271(1)(c) after completing the assessment proceedings as per law. 17. In the result, the appeal filed by the assessee in ITA No.1555/Hyd/2025 is allowed for statistical purposes. Printed from counselvise.com 10 ITA Nos.1554 and 1555/Hyd/2025 Prasanth Puttamareddy 18. To sum up, both the appeals filed by the assessee are allowed for statical purposes. A copy of this common order be placed in the respective case files. Order pronounced in the Open Court on 3rd December, 2025. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- (मंजूिधथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 03.12.2025. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Prasanth Puttamareddy, Flat No.101A, Bhavani Park Towers, Ramakrishna Nagar, Childrens Park Road, Presently resident at Glen Allen, Virginia, Nellore. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 1, Nellore. 3. The Principal Commissioner of Income Tax, Tirupati. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "