SUDHAKAR PURI,HYDERABAD V. ITO, WARD 11(1), HYDERABAD

ITA 1207/HYD/2024

AI Insights

The case involves an appeal by Shri Sudhakar Puri against the order of the Commissioner of Income-Tax (Appeals), which arose from an assessment order passed by the Assessing Officer under sections 147 and 144 of the Income Tax Act, 1961. The assessee contested the reassessment and various additions made by the Assessing Officer, including unexplained cash deposits and credit card bills. The CIT(A) dismissed the appeal for want of prosecution, which led to the current appeal before the Tribunal. The Tribunal found that the CIT(A) had not addressed the specific issues raised in the appeal and emphasized the need for a decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126250 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Other Referred Cases: Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur, CIT Vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Tangible material
• Section: 147; 144; 250; 251; 69C; 69A; 246A

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad श्री रवीश सूद, माननीय न्याययक सदस्य एवं श्री मिुसूदन सावडिया, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.1207/Hyd/2024 (निर्धारण वर्ा/ Assessment Year: 2014-15) Shri Sudhakar Puri, Hyderabad. PAN : AHKPP3074G. Income Tax Officer, Ward – 11(1), Hyderabad. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri P. Murali Mohan Rao, C.A. राजस्व का प्रतततितित्व/ Department Represented by : Dr. Sachin Kumar, Sr.DR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 17.04.2025 घोर्णध की तधरीख/Date of Pronouncement : 23.04.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.07.2024, which in turn arises from the order passed by the Assessing 2 ITA No.1207/Hyd/2024 Officer (for short “A.O.”) u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (for short “the Act”) dated 12.05.2023 for A.Y. 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before us : “1. The order of the Ld. CIT(A) u/s 250 of the Act dt. 30.07.2024 1 is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant. 2 The Ld. CIT(A) erred in dismissing the appeal. 3. The Ld. CIT(A) ought to have appreciated the fact that the reassessment u/s 147 r.w.s 144 is erroneous as no tangible material was found which indicates that the assessee has escaped the income for the year under consideration. 4. The Ld. CIT(A) erred in not considering the fact the AO has to draw conclusions on the basis of certain admitted facts and material on record and not on the basis of presumptions as it against the principles of natural justice. 5. The Ld. CIT(A) erred in not considering that the assessee is deriving commission in the business providing transportation services from Singareni to Bangalore Via Hyderabad and the said receipts were being the deposits in the Bank account, 6. The Ld. CIT(A) erred in not considering that the AO failed to accept the income returned in the return of income towards 6 commissions, which is against to the principles of Natural Justice and thus the order of the Ld CIT(A) deserves to be quashed. 7. The Ld. CIT(A) erred in confirming the addition of cash deposit transactions made by the AO amounting to Rs. 1,43,42,496/- towards unexplained money u/s 69A of the Act without appreciating the facts of the case. 8. The Ld. CIT(A) ought to have appreciated that as the assessee had no regular customers, he is unable to produce details of the customers and confirmation from the customers from whom he received commission. 9. The Ld. CIT(A) ought to have appreciated that as the assessee is engaged in the business of providing transportation services, 9 assessee collects the amount from the customers and they deposit the amount in the bank accounts and the same was withdrawn from the bank and paid to the vehicle owner. 3 ITA No.1207/Hyd/2024 10. The Ld. CIT(A) erred in confirming the addition of Credit Card Bills made by the AO amounting to Rs. 3,29,373/- u/s 69C of the Act without appreciating the facts of the case that these amounts represent the transaction of his business. 2. Ostensibly, the present appeal involves a delay of 52 days. Shri P. Murali Mohan Rao, the learned authorized representative (for short the “ld.AR”) for the assessee, at the threshold of the hearing of the appeal, submitted that the delay in filing the appeal has occasioned for the bona fide reason that the assessee was unaware that the order of the CIT(A) had been dropped in the email account that was provided by his counsel in the “Memorandum of Appeal” i.e., Form 35 and was awaiting service of a certified copy of the same. The ld. AR to buttress his aforesaid claim had drawn our attention to the application of the assessee seeking condonation of the delay supported with an “affidavit” dated 21- 11-2004. Elaborating further on his contention, the AR submitted that as the delay in filing the present appeal has had occasioned for bona fide reasons and not on account of any lackadaisical approach or malafide conduct of the assessee, therefore, the same, in all fairness, be condoned. 4 ITA No.1207/Hyd/2024 3. Per contra, Dr. Sachin Kumar, learned Senior Departmental Representative (for short the “Ld. DR”) objected to the seeking of condonation of the delay by the assessee. 4. We have thoughtfully considered the contentions advanced by the learned authorized representatives of both parties qua the reasons leading to the delay involved in the filing of the present appeal before us. Although we are of a firm conviction that the assessee ought to have remained vigilant and filed the present appeal within the prescribed period, but at the same time, considering the fact that the delay in filing of the appeal had occasioned for bona fide reasons and the delay involved is not inordinate, condone the same. Our aforesaid view is supported by the recent decision of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Specia Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025. The Hon'ble Apex Court while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 114 days by the Income-Tax Appellate Tribunal, Raipur Bench, had observed, that a justice-oriented and 5 ITA No.1207/Hyd/2024 liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay involved in filing the appeal. 5. Apropos the merits of the case, we find that the CIT(A), without adverting to the specific issues based on which the impugned assessment order was assailed by the assessee- appellant before him, had summarily dismissed the appeal for want of prosecution. For the sake of clarity, the observations of the CIT(A) are culled out as under : 6. Although not being oblivion to the fact that the assessee despite having been afforded five opportunities for participating in the proceedings before the CIT(A) i.e., vide notices dated 03-06- 6 ITA No.1207/Hyd/2024 2024, 11-06-2024, 20-06-2024, 04-07-2024, and 22-07-2024, had failed to participate in the said proceedings, therefore, we find no infirmity in the view taken by the CIT(A), who has proceeded with an disposed of the appeal vide an ex-parte order, but at the same time, are unable to persuade ourselves to subscribe to the manner in which he had disposed off the appeal by refraining from adjudicating the specific issues based on which the impugned order of assessment was assailed by the assessee-appellant before him and summarily dismissed the appeal. 7. In our considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. Rather, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arise from the impugned order before him. As per the mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of 7 ITA No.1207/Hyd/2024 Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under: \"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 8. We, thus, not being able to persuade ourselves to subscribe to the summary dismissal of the appeal by the CIT(Appeals) for 8 ITA No.1207/Hyd/2024 non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the CIT(Appeals) shall in the course of the de-novo appellate proceedings afford a reasonable opportunity of being heard to the assessee. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes in terms of the aforesaid observations. 9. Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 23rd April, 2025. Sd/- (श्री मिुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 23.04.2025. #*TYNM/sps 9 ITA No.1207/Hyd/2024 आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Sudhakar Puri, 3248, Venkatapally Nagar Colony, Kukatpally, Hyderabad – 500007, Andhra Pradesh. C/o. P. Murali & Co., Chartered Accountants, 6-3- 655/2/3, Somajiguda, Hyderabad. 2. रधजस्व/ The Revenue : Income Tax Officer, Ward – 11(1), Hyderabad. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad "