RAVINDER RAO TAKKALLAPELLY,HYDERABAD V. DCIT., CIRCLE-1, KARIMNAGAR

ITA 477/HYD/2025

AI Insights

The case involves Shri Ravinder Rao Takkallapelly, the appellant, who contested an order from the Learned Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2015-16. The primary contention was regarding the incorrect addition of Rs.42,34,956 as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. The appellant argued that the Assessing Officer erred in treating the amount as deemed dividend without proper appreciation of the factual and legal position, and also claimed there was an arithmetical error in the calculation of the deemed dividend. The appeal to the CIT(A) was dismissed as time-barred due to a delay of 563 days, which the appellant attributed to non-receipt of the assessment order. The tribunal found the explanation for the delay unsubstantiated but remanded the matter for a detailed examination of the delay explanation and potential condonation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653199 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: A. CHIRANJEEVI
• Keywords: Condonation of delay; Reassessment proceedings; Deemed dividend; Period of limitation; Principle of natural justice; Time period of passing order
• Section: 147; 148; 2(22)(e)

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad श्री विजय पाल राि, उपाध् यक्ष एिं श्री मिुसूदन सािडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.477/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2015-16) Shri Ravinder Rao Takkallapelly, Hyderabad. PAN: ABFPT4429E Vs. Dy. Commissioner of Income Tax, Circle-1, Karimnagar. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri A. Chiranjeevi, C.A. रधजस् व द्वधरध/Revenue by: Dr. Sachin Kumar, SR-DR सुिवधई की तधरीख/Date of hearing: 17/06/2025 घोर्णध की तधरीख/Pronouncement: 18/06/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Shri Ravinder Rao Takkallapelly (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 04.03.2025 for the A.Y. 2015-16. 2. The assessee has raised the following grounds of appeal : ITA No.477/Hyd/2025 2 “ 1. Against Incorrect Addition under Section 2(22)(e): The learned Assessing Officer (AO) erred in treating the amount of Rs.42,34,956 as deemed dividend under Section 2(22)(e) without correctly appreciating the factual and legal position. The AO failed to distinguish between transactions of business nature and those intended to be covered under the ambit of deemed dividend. Improper Calculation of Deemed Dividend: The calculation of deemed dividend by attributing accumulated profits of Rs.55,37,703 to the shareholder's shareholding percentage was done arbitrarily without substantiating the link between the loan and the distribution of profits. And without looking in to the facts of profits, arbitrarily profits was arrived as Rs.55,37,703. And further there is clear arithmetical error in calculation. The AO Considered equation in arriving Rs.42,34,956 (Rs.55,37,703*41.22)/(12.68+41.22)= Rs.42,34,956 (Shri R Thirupathi Goud was provided unsecured loans/advances of Rs.32,68,653 for A.Y. 2015. 2. The assessee has filed his return of income for the A.Y.2015-16 on 31-03-2016 admitting taxable income of Rs.37,68,000 (which has been wrongly intimated as Rs.39,18,000 in Para No.4.6) and the same was invalidated by CPC. Hence the return filed by the assessee is treated as non-est for the A.Y.2015-16. Further, the assessee has filed return of income declaring total income of Rs.37,68,000 on 01-02-2023 for the A.Y.2015-16 in the notice u/s 148 of the Act. The remuneration of Rs.39,00,000 response received was offered as income ROI. Ignoring the said return filed in response to Notice u/sec 148, again of Rs.39,00,000 has been wrongly added in scrutiny assessment. Hence, this duplicate addition is to be deleted.” 3. Brief facts of the case are that, the assessee filed an appeal before the Ld. CIT(A) challenging the reassessment order passed by the Learned Assessing Officer (“Ld. AO”) under Section 147 r.w.s. ITA No.477/Hyd/2025 3 144B of the Income Tax Act,1961 (“ the Act”) for A.Y. 2015–16. However, there was a delay of 563 days in filing of the appeal before the Ld. CIT(A). Despite such a substantial delay, the assessee neither filed any formal petition for condonation of delay, nor submitted any affidavit explaining the reasons for the delay. Consequently, the Ld. CIT(A), without condoning the delay, dismissed the appeal as time- barred. 4. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that the delay occurred due to non-receipt of the assessment order passed by the Ld. AO. It was explained that the assessment order was not served on the regular email ID used by the assessee, but was instead sent to a different email ID, which was inactive and not monitored by the assessee. As a result, the assessee became aware of the assessment order only upon receipt of the demand notice from the Revenue authorities at a later stage, by which time the limitation period for filing the appeal had expired. The Ld. AR submitted that the delay was not intentional and requested for condonation of the same. ITA No.477/Hyd/2025 4 5. Per contra, the Learned Departmental Representative (“Ld. DR”) opposed the request for remand. He submitted that the assessee had participated in the reassessment proceedings and had complied with certain notices issued by the Ld. AO. Therefore, the assessee was well aware of the reassessment proceedings, and the explanation that the assessee did not know about the final assessment order is not acceptable. The Ld. DR also referred to paragraph 2.5 of the appellate order passed by the Ld. CIT(A), wherein it was clearly recorded that the assessee did not submit any formal petition or affidavit supported by documentary evidence explaining the specific reasons for the delay. The Ld. DR further submitted that adequate opportunity had already been provided by the Ld. CIT(A), which the assessee failed to utilize. 6. We have heard the rival submissions and also gone through the record in the light of the submissions made on either side. On perusal of paragraph 2.5 of the order passed by the Ld. CIT(A), we note that the CIT(A) has clearly stated that the assessee did not file ITA No.477/Hyd/2025 5 any formal condonation petition or affidavit supported by evidence explaining the cause of delay. We further observe that even before us, the assessee has not filed any petition for condonation of delay or any affidavit explaining the reasons for the delay of 563 days in filing the appeal before the Ld. CIT(A). Thus, the explanation regarding wrong service of the assessment order on an inactive email ID remains unsubstantiated on record. However, considering the principles of natural justice and in order to provide one more opportunity to the assessee to explain the delay, we deem it appropriate to remand the matter to the file of the Ld. CIT(A). The assessee is directed to file a formal condonation petition supported by an affidavit and relevant documentary evidence explaining the delay before the Ld. CIT(A). The Ld. CIT(A) shall consider the petition for condonation of delay on merits and pass a speaking order thereon. In case the delay is condoned, the Ld. CIT(A) may proceed to decide the appeal on merits in accordance with law. We also direct the assessee to cooperate with ITA No.477/Hyd/2025 6 the proceedings and not to seek unnecessary adjournments, failing which the Ld. CIT(A) shall be at liberty to pass an order in accordance with law. 7. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open Court on 18th June, 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 18.06.2025. * Reddy gp Copy of the Order forwarded to : 1. Shri Ravinder Rao Takkallapelly, Flat No.44042, Janapriya Utopia, Aattapur, Hyderabad-500064 2. DCIT, Circle-1, Karimnagar. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "