Thoti Sankaraiah Vs ITO (ITAT Hyderabad)
Notices sent to email different from Form 35 justify delay condonation; ITAT remands disputed salary assessment
Delay of 563 Days Condoned Due to Notices Sent to Different Email Address
The Income Tax Appellate Tribunal, Hyderabad, held that dispatch of appellate notices and the order to an email address different from that specified in Form 35 constituted sufficient cause for condoning delay, considering the supporting evidence and subsequent conduct.
The Tribunal condoned 563 days’ delay, subject to costs, and restored the assessment directly to the Assessing Officer. It found that the substantial difference between salary income claimed at ₹2,98,170 and assessed at ₹55,77,032 required factual verification. The order provided an opportunity for fresh adjudication without finally accepting the assessee’s income claim.
Background of the Reassessment
The assessee, a government teacher, had not filed his return of income for assessment year 2016-17. The AO reopened the assessment under section 147 and issued notice under section 148 of the Income Tax Act, 1961.
The assessee neither filed a return in response nor complied with subsequent assessment notices. Consequently, the AO completed the assessment ex parte under section 147 read with sections 144 and 144B, determining income under the head “Salaries” at ₹55,77,032 through an order dated 27.03.2022.
The assessee appealed before the CIT(A). However, he did not respond to appellate notices, and the CIT(A) dismissed the appeal through an order dated 17.09.2024.
Explanation for the Delayed Appeal
Before the Tribunal, the assessee filed a condonation petition supported by an affidavit. His representative explained that Form 35 specified an email address for receiving appellate communications, but the CIT(A)’s notices and order were sent to a different address.
Consequently, the assessee remained unaware of the appellate proceedings and the dismissal order. He submitted that receipt of a recovery notice under section 226(3), dated 14.03.2026, prompted him to consult a tax professional and take steps to appeal.
The Revenue strongly opposed condonation, arguing that the explanation did not establish sufficient cause for a delay of 563 days and seeking dismissal on limitation.
Supporting Communications Established Sufficient Cause
The Tribunal examined the material and found that the communications supported the assessee’s explanation. The notices and appellate order had indeed been sent to an email address different from the one furnished in Form 35.
This provided a reasonable explanation for the lack of knowledge of the appellate order. The action taken after receipt of the recovery notice also supported the contention that the delay was not deliberate.
The Tribunal clarified that the length of delay alone cannot be decisive where the explanation, evaluated against the surrounding circumstances, establishes sufficient cause. It therefore considered admission of the appeal appropriate.
Condonation Accompanied by Costs
The Tribunal nevertheless observed that the assessee was expected to exercise reasonable diligence in following up his pending appeal. His failure to do so could not be completely overlooked.
However, this lack of follow-up did not outweigh the explanation concerning communications sent to a different email address. Balancing these factors, the Tribunal condoned the delay subject to depositing ₹5,000 in the Prime Minister’s National Relief Fund within 30 days of receiving the order.
Thus, condonation rested on the evidence and circumstances, while the costs addressed the assessee’s insufficient diligence.
Substantial Discrepancy in Salary Income
On the assessment merits, the assessee submitted that his only income was salary of ₹2,98,170, reflected in Form 26AS. His grounds also referred to TDS of ₹2,901.
He disputed the AO’s adoption of salary income at ₹55,77,032 and requested that the matter be restored directly to the AO, rather than returned to the CIT(A).
The Revenue expressed no objection to fresh adjudication by the AO, although it had opposed condonation. The Tribunal noted that the original assessment was ex parte and that the assessee also could not present his explanation before the CIT(A) because notices were sent to the different email address.
Direct Remand for Factual Verification
The Tribunal held that the correctness of assessed income could be determined only after examining salary records, Form 26AS and other supporting evidence. The difference between the claimed and assessed figures required substantive verification.
It therefore set aside the CIT(A)’s order and restored the assessment directly to the AO for fresh adjudication in accordance with law.
The AO must consider material already available, together with documents and explanations furnished by the assessee. He must verify actual salary income and corresponding TDS and determine total income after granting a reasonable opportunity of hearing.
Final Outcome and Scope of Relief
The assessee was directed to cooperate, respond to notices and furnish relevant documents and explanations without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.
The order does not finally delete the disputed assessed income or determine ₹2,98,170 as the correct salary income. It grants condonation and a fresh examination of the assessment. Although the grounds also challenged reassessment jurisdiction and service of the section 148 notice, the Tribunal’s operative directions focused on restoration and factual verification.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Shri Thoti Sankaraiah (“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 17.09.2024 for the A.Y. 2016-17.
2. At the outset, it is observed that there is a delay of 563 days in filing the present appeal before this Tribunal. The assessee has filed a condonation petition along with an affidavit explaining the reasons for the delay. The Learned Authorized Representative (“Ld. AR”) submitted that the assessee had specified an email address in Form No. 35 for receiving communications from the Ld. CIT(A). However, drawing our attention to the emails sent by the Ld. CIT(A), he submitted that the notices as well as the appellate order were sent to a different email address. Consequently, the assessee remained unaware of the appellate proceedings and the order passed by the Ld. CIT(A). He further submitted that, upon receipt of the notice under section 226(3) of the Income Tax Act, 1961 (“the Act”) dated 14.03.2026, the assessee consulted a tax consultant and immediately took steps to file the present appeal. The Ld. AR submitted that the delay arose from the aforesaid circumstances and was neither deliberate nor intentional. Accordingly, he prayed that the delay be condoned and the appeal be admitted for adjudication on merits.
3. Per contra, the Learned Departmental Representative (“Ld. DR”) vehemently opposed the condonation of the delay. He submitted that the assessee had failed to establish sufficient cause for the substantial delay of 563 days and prayed that the appeal be dismissed as barred by limitation.
4. We have heard the rival submissions and perused the material available on record. The principal explanation of the assessee is that the notices and the appellate order were sent to an email address different from the address specified in Form No. 35, owing to which the assessee remained unaware of the order. The Ld. AR has further submitted that the assessee took steps to file the appeal upon receiving the notice under section 226(3) of the Act dated 14.03.2026. The Ld. DR, however, has objected that the explanation does not constitute sufficient cause for condoning the substantial delay. On consideration of the material placed before us, we find that the communications relied upon by the assessee support the explanation that the notices and the appellate order were sent to an email address different from the address furnished in Form No. 35. This circumstance provides a reasonable explanation for the assessee’s lack of knowledge of the appellate order. The subsequent steps taken upon receipt of the recovery notice also support the assessee’s contention that there was no deliberate intention to delay the filing of the appeal. Although the delay is substantial, its length alone cannot be decisive when the explanation, considered in the surrounding circumstances, establishes sufficient cause. At the same time, the assessee was required to exercise reasonable diligence in following up the pending appeal. While such lack of follow-up does not outweigh the explanation concerning the communications sent to a different email address, we consider it appropriate to impose costs while granting condonation. Having regard to the entirety of the facts and circumstances, we are satisfied that sufficient cause has been shown for condoning the delay and that the appeal deserves to be adjudicated on merits. Accordingly, we condone the delay of 563 days and admit the appeal for adjudication on merits, subject to the assessee depositing Rs. 5,000/- in the Prime Minister’s National Relief Fund within 30 days from the date of receipt of this order.
5. The assessee has raised the following grounds of appeal:
“1. The Order of the learned Commissioner of Income Tax (A) is not correct either on facts or in law and in both.
2. The learned CIT(A) erred in law and on tacts in con firming the reassessment and sustaining the addition of Rs.55,77,032/- without properly appreciating the facts of the case and the evidence available on record, thereby rendering the impugned order unsustainable in law.
3. The learned erred in upholding the assumption of jurisdiction under sections 147/148 of the Act, despite the reassessment having been initiated on the basis of incorrect and non-existent facts by treating as salary income, whereas Form No.26AS reflected salary receipts of only Rs.2,98,170/- with TDS of Rs.2,901/-.
4. The learned CITI A) erred in failing to appreciate that notice under section 148 dated 29.03.2021 was not duly served upon the appellant and was not digitally signed in accordance with law, consequently, the reassessment proceedings are void ab initio and liable to be quashed.
5. The learned CIT(A) erred in confirming the addition of Rs. 55,77,032/- without appreciating that Form No, 26AS reflected salary receipts of only Rs. 2,98,170/- with TDS of Rs. 2,901/- and, therefore, the addition is factually incorrect, unsupported by evidence and liable to be deleted.
6. The appellant craves leave to add, amend, modify, rescind. supplement or alter any more grounds of appeal stated herein above either before or at the time hearing of this appeal.”
6. The brief facts of the case are that the assessee is an individual employed as a government teacher and had not filed any return of income for the assessment year 2016-17. The Assessing Officer (“AO”) reopened the assessment under section 147 of the Act and issued notice under section 148 of the Act. The assessee neither filed a return of income in response to the said notice nor complied with the subsequent notices issued during the assessment proceedings. Consequently, on the basis of the information available on record, the AO completed the assessment under section 147 read with sections 144 and 144B of the Act vide order dated 27.03.2022, determining the total income of the assessee under the head “Salaries” at Rs. 55,77,032/-.
7. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A). However, the assessee did not respond to the notices issued during the appellate proceedings, and the Ld. CIT(A) dismissed the appeal.
8. Aggrieved by the said order of the Ld. CIT (A), the assessee is in appeal before this Tribunal. The Ld. AR submitted that, as explained in the petition seeking condonation of delay, the notices issued by the Ld. CIT(A) were sent to an email address different from the address specified in Form No. 35. Consequently, the assessee remained unaware of the notices and could not present his case on merits before the Ld. CIT(A). He submitted that the non-appearance during the appellate proceedings was attributable to the aforesaid circumstances. The Ld. AR further submitted that the assessee’s only source of income during the year under consideration was salary of Rs. 2,98,170/-, which was reflected in Form 26AS and on which tax had already been deducted by the employer. However, despite the information reflected in Form 26AS, the AO adopted the salary income at Rs. 55,77,032/-, resulting in a high-pitched assessment. He therefore prayed that, instead of restoring the matter to the Ld. CIT(A), the issue be restored directly to the file of the AO for fresh adjudication after examining the available records and the evidence to be furnished by the assessee.
9. Per contra, the Ld. DR expressed no objection to restoring the matter to the file of the AO for fresh adjudication.
10. We have heard the rival submissions and perused the material available on record. The Ld. AR has explained that the assessee could not participate in the appellate proceedings because the notices were sent to an email address different from the address furnished in Form No. 35. He has further contended that the assessee’s actual salary income was only Rs. 2,98,170/-, as reflected in Form 26AS, whereas the AO assessed salary income at Rs. 55,77,032/-. Accordingly, he has requested that the matter be restored directly to the AO for examination of the relevant records. The Ld. DR has not objected to such restoration. We observe that the assessment was completed ex-parte owing to the assessee’s non-compliance with the notices issued by the AO. The assessee also could not present his case before the Ld. CIT(A), as the appellate notices were sent to a different email address. Consequently, the explanation regarding the actual salary income and the supporting material could not be examined by the authorities below. The substantial difference between the salary income stated to be reflected in Form 26AS and the salary income adopted in the assessment requires factual verification. The correctness of the assessed income can be determined only after examining the relevant salary records, Form 26AS and other supporting evidence.
11. Considering the facts and circumstances of the case, the request of the Ld. AR and the absence of any objection from the Ld. DR, we consider it appropriate to restore the matter directly to the file of the AO. Accordingly, we set aside the order of the Ld. CIT(A) and restore the assessment to the file of the AO for fresh adjudication in accordance with law, on the basis of the material already available on record and the documents and explanations to be furnished by the assessee. The AO shall verify the actual salary income earned by the assessee and the corresponding tax deducted at source and determine the total income accordingly, after providing a reasonable opportunity of being heard. The assessee is directed to cooperate with the assessment proceedings, respond to the notices and furnish the relevant documents and explanations without seeking unnecessary adjournments.
12. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 16th October, 2026.
