M Venkat Reddy, Hyderabad vs Assessee

This is an assessee's appeal against the order of Ld. CIT(A)-VI, Hyderabad dated 25.09.2012 rejecting assessee's appeal in limine.

2. Assessee has filed the memorandum of appeal before ITAT on 29.09.2014 and in Form No.36, against the date of communication of the order appealed against in Column No.9, he has not mentioned date of communication of the order and mentioned only year 2014. When asked for condonation of delay in filing the appeal, assessee in the condonation petition seeking condonation of 644 days delay submitted in an affidavit that assessee was not aware about the dismissal of the appeal by the Ld. CIT(A) and he has come to know only when the A.O. tried to collect the taxes therein.

2 ITA.No.1526/Hyd/2014 Mr. M. Venkat Reddy, Nalgonda

On receipt of duplicate copies from the A.O. appeal was filed immediately without any further delay. Later on assessee's counsel approached the Ld. CIT(A) to ascertain the date of service of the order as per the records of Ld. CIT(A). It was submitted that they could only gather that the order was dispatched by post on 23.10.2012 but there is no evidence in the file that it was served on assessee or Counsel. Therefore, assuming but without admitting that the order was dispatched on 23.10.2012, it was considered that the order was deemed to have served within three days i.e., on 26.10.2012 and considering the time available for filing the appeal, assessee filed the present condonation petition considering resultant delay of 644 days. It was further submitted that the delay, if any, in filing the appeal is neither willful nor intentional but is on the reason that the order of Ld. CIT(A) was not served on assessee. Since, assessee is interested in pursuing the appeal, it was requested that condonation of delay, if any, may be granted.

3. After considering the objections of the learned D.R. we are of the opinion that the delay in filing the appeal, if any, has to be condoned. Accordingly, we are admitting the appeal and decide the issue.

4. Coming to the issues raised in appeal, assessee is a wine dealer and A.O. made various additions after rejecting books of accounts and estimating the sales by taking 27% margin on purchases and estimating deemed sales. As against the total income returned at Rs.3,31,440, total income was determined at Rs.27,41,060. Assessee preferred an appeal before the Ld. CIT(A) with a delay. It was the contention of assessee that delay was about 39 days for which condonation 3 ITA.No.1526/Hyd/2014 Mr. M. Venkat Reddy, Nalgonda

was sought, whereas as per the Ld. CIT(A) the delay was above 130 days. Even though two opportunities were given to assessee to explain, according to the Ld. CIT(A), assessee did not furnish any explanation and therefore, in view of the persistent failure of assessee to submit any explanation leading to reasonable presumption that assessee had no reason nor explanation for the delay, the appeal was treated as dismissed in limine.

5. It was assessee's contention that Ld. CIT(A) erred in dismissing the appeal in limine and that proper opportunity was not given to assessee violating the principles of natural justice. Further, since explanation was already filed with respect to delay before the Ld. CIT(A), the Ld. CIT(A) ought to have decided the appeal on merits instead of dismissing the appeal in limine. It was further submitted that Counsel who represented assessee had not informed assessee about hearing of the appeal and therefore, Ld. CIT(A) ought to have sent notice of hearing to the assessee directing him to furnish his submissions if any, when the Counsel did not respond to the notice.

6. We have considered the submissions of assessee's counsel and objections of the learned D.R. As far as ground No.3 is concerned, assessee in fact in Form No.35 mentioned his Authorised Representative's address only for service of notice. Therefore, it cannot be stated that Ld. CIT(A) erred in not serving notice on assessee when assessee preferred to get the notice served to the address of the Authorised Representative as stated in Form 35. As such, the fault cannot be attributed to the O/o. Ld. CIT(A) as notices were sent to the given address. Therefore, ground No.3 does not have any merit.

4 ITA.No.1526/Hyd/2014 Mr. M. Venkat Reddy, Nalgonda

7. Coming to Ground Nos. 1 and 2, we are of the opinion that Ld. CIT(A) should not have dismissed the appeal in limine without informing objection about number of days delay and explanation from assessee. Assessee in fact, filed condonation for 39 days and Ld. CIT(A) noticed that actual delay was about 130 days. Why there is discrepancy in the dates has not been forthcoming and no explanation from assessee was sought. The order of CIT(A) also does not indicate how the delay was calculated. It was also submitted that assessee's counsel, an Income Tax Practitioner, did not respond to the notices. Nothing was on record whether notice was properly served to him or not. Therefore, in the interest of justice, we are of the opinion that another opportunity should be given to assessee not only to explain the delay but also to submit his submissions on the additions made by the A.O. In view of the above, we set aside the order of Ld. CIT(A) and restore the appeal memo before the Ld. CIT(A) to consider it afresh, by giving due opportunity to assessee. Assessee is also directed to file revised Form No.35 indicating correct address to which notices are to be sent, so that he will get due opportunity before the authorities.

8. In the result, appeal of assessee is allowed for statistical purposes.

Order pronounced in the open Court on 13.02.2015.

Sd/- Sd/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 13th February, 2015

VBP/- 5 ITA.No.1526/Hyd/2014 Mr. M. Venkat Reddy, Nalgonda

Copy to

1. Mr. Venkat Reddy, Prop Urvasi Wines, Shaligouraram (V), Nalgonda Dist., C/o. Mr. A.V. Raghuram, & Mr. P. Vinod, Advocates, 610, Babukhan Estates, Basheerbagh, Hyderabad.

2. The Income Tax Officer, Ward-1, Nalgonda.

3. CIT(A)-VI, 6A, I.T. Towers, A.C. Guards, Hyderabad-500 004.

4. CIT-VI, Hyderabad.

5. D.R. ITAT "B" Bench, Hyderabad.