ITAT Orders Fresh Consideration of Subcontractor’s Income After Condoning Delay

The Income Tax Appellate Tribunal (ITAT), Hyderabad, condoned a delay in filing the appeal, which was caused due to the personal tragedy of the assessee.

The assessee, Shri Gorsa Mohan Kumar Babu, was carrying on a business of contract as a subcontractor. The Assessing Office assessed the income of the assessee by estimating the profit at 8%. However, the assessee contended that the profit margin of the assessee cannot be more than 5% and the same has been supported by several past tribunal decisions. The CIT(A) dismissed the appeal due to the delay. Therefore, the assessee finally approached the Income Tax Appellate Tribunal (ITAT) Hyderabad, requesting to condone the delay.

The assessee submitted that the delay was caused by the death of his younger brother, who was managing the execution of contracts and other related matters and the death of his father. Additionally, the appellant was also facing medical issues, causing the delay. He requested the tribunal to condone the delay of 325 days in filing the appeal.

The Tribunal considered the reason for the delay and condoned the delay, imposing a cost of Rs 10,000, which was required to be paid to the Prime Minister Relief Fund within one month.

Regarding the estimation of the income of the assessee as the subcontractor, the Tribunal believed that the issue needs to be reconsidered. Since the matter was not decided on merits and an ex parte order was passed, the Tribunal set aside the order of CIT(A) and remanded the matter to the Assessing Officer for fresh consideration and directed the AO to give an opportunity to be heard to the assessee.