Income Tax Appellate Tribunal - Hyderabad
S.Karunakar Reddy, Sec'Bad, Hyderabad vs Ito, Ward-10(2), Hyd, Hyderabad on 14 August, 2017
ITA No 176 of 2016 S Karunakar Reddy Secunderabad
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' A ' (SMC) Bench, Hyderabad
Before Smt. P. Madhavi Devi, Judicial Member
ITA No.176/Hyd/2016
(Assessment Year: 2004-05)
Sri S. Karunakar Reddy Vs Income Tax Officer
Secunderabad Ward 10 (2)
PAN: AIRPS 8553 R Hyderabad
(Appellant) (Respondent)
For Assessee : Shri A.V. Raghuram
For Revenue : Smt. Suman Malik
Date of Hearing: 14.08.2017
Date of Pronouncement: 14.08.2017
ORDER
This is assessee's appeal for the A.Y 2004-05. In this appeal, the assessee is aggrieved by the order of the CIT (A)-9, Hyderabad dated 20.12.2015 in not condoning the delay of 301 days in filing of the appeal before the CIT (A), even though the assessee has a strong case on merit.
2. Brief facts of the case are that the assessee, an individual, filed his return of income for the A.Y 2004-05 on 1.11.2004 declaring total income of Rs.2,26,650. The AO observed that the assessee's a/c was credited with Rs.15.00 lakhs which was not offered to tax whereas the TDS of Rs.76,875 was claimed in the return. Therefore, a notice u/s 148 of the Act was issued to the assessee. Since there was no response from the assessee to Page 1 of 4 ITA No 176 of 2016 S Karunakar Reddy Secunderabad the statutory notices issued to him to produce the books of account and vouchers, a final show-cause letter dated 26.09.2007 was issued to the assessee. Since the assessee failed to comply with the notices and failed to appear before the AO, the AO completed the assessment u/s 144 of the Act by treating 50% of the receipt of Rs.15.00 lakhs as income of the assessee and completed the assessment. Thereafter, the assessee filed an appeal before the CIT (A) with a delay of 301 days. The assessee filed an affidavit stating that he had handed over the assessment order to one of his employees who misplaced the same and later on left the job and the assessment order was recovered by his subordinate staff subsequently and therefore, immediately an appeal has been filed. This application for condonation of delay has been considered by the CIT (A) and the appeal of the assessee was accordingly rejected. The assessee is in second appeal before us.
3. The learned Counsel for the assessee, while reiterating the reasons mentioned in the affidavit for condonation of delay, also drew our attention to the return of income filed by the assessee wherein there was a note to the computation of income stating that "the assessee is following the accounting system on receipt basis and payment in respect of TDS issued for Rs.76,785 has not been received by the assessee during the previous year 2003-04. However, since the TDS is being claimed, the same has been accounted in the receipts". He has also drawn our attention to the ledger a/c of the assessee which is placed at Page 15 of the paper book to demonstrate that he has received the contract amount of Rs.15.00 lakhs excluding the TDS on 22.04.2014 and Page 2 of 4 ITA No 176 of 2016 S Karunakar Reddy Secunderabad that the same has been offered to tax in the next A.Y. He has also placed reliance upon the TDS form to drive his point that the said amount has been received by him in the next A.Y. Thus, according to him, the assessee has a strong case on merit. He placed reliance upon the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. MST & Katiji & Ors reported in (1987) 167 ITR 0471 and also the decision of the Hon'ble jurisdictional High Court at Hyderabad in the case of Surya General Traders vs. Commercial Tax Officer & Ors in Writ Petition No.6143 of 1997 dated 31.3.1997 wherein it was held that where an assessee has a case on merit, the delay should be condoned.
4. The learned DR, on the other hand, supported the orders of the authorities below.
5. Having regard to the rival contentions and the material on record, we find that the assessee appears to have a strong case on merit. The assessee has filed the relevant documents before us to demonstrate that he has not received the payment for which the TDS has been made during the relevant previous year and that the payment has been received in the subsequent year and the assessee has accordingly offered it to tax. However, all these documents need verification by the AO. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. MST & Katiji & Ors (cited Supra) has taken note of the fact that the courts are to apply the law in a meaningful manner which sub serves the ends of justice and sufficient cause for the purpose of condonation of Page 3 of 4 ITA No 176 of 2016 S Karunakar Reddy Secunderabad delay should be interpreted with a view to do even-handed justice on merits in preference to approach which scuttles a decision on merit. Similar view has been expressed by the Hon'ble jurisdictional High Court in the case of Surya General Traders & Ors. (Cited Supra). In view of the same, we deem it fit and proper to condone the delay of 301 days in filing of the appeal before the CIT (A) subject to the assessee paying a cost of Rs.2000/- to the Department and remand the matter back to the file of the AO for verification of the assessee's contention and to complete the assessment in accordance with the law after giving the assessee due opportunity of hearing.
6. In the result, assessee's appeal is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 14th August, 2017.
Sd/-
(P. Madhavi Devi) Judicial Member Hyderabad, dated 14th August, 2017.
Vinodan/sps Copy to:
1 S/Sri K.Vasant Kumar, AV Raghu Ram, P Vinod, M. Neelima Devi, Advocates, Flat No.610 6th Floor, Babukhan Estate, Basheerbagh, Hyderabad 500001 2 Income Tax Officer Ward 10(2) Hyderabad 3 CIT (A)-9 Hyderabad 4 Pr. CIT - 7 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File By Order Page 4 of 4