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Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR
Date of Hearing 15.09.2025 Date of Pronouncement 29.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 19.06.2023 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 31.10.2017 for the Assessment Year [A.Y.] 2015-16.
A.Y. 2015-16 Mount Meru India Private Limited, Mumbai 2. The grounds of appeal are as under: ON NATURAL JUSTICE 1.1. In the facts and circumstances of the case and in law, the Learned Commissioner of Income tax (Appeals), National Faceless Appeal Centre [“Ld. CIT (A)”) erred in confirming the action of the Deputy Commissioner of Income Tax, Circle-10(2)(2), Mumbai [“the AO”] by passing an ex-parte order contrary to the provisions of the Income Tax Act, 1961 [“the Act”]. 1.2. While passing the said order the Ld. CIT(A) failed to appreciate that: (i) The said order is passed without granting a fair, proper and reasonable opportunity of being heard to the Appellant; (ii) The appeal was migrated to the faceless appeal scheme without any intimation to the Assessee and therefore the Assessee was unaware of the said proceedings. (iii) Further during the pendency of the appeal and even thereafter. many employees of the Assessee left their jobs or their services were terminated due to certain internal conflicts/ frictions and therefore there was no proper hand over of the pending matters because of which the notices could not be replied to, and; (iv) The non-furnishing of replies was not deliberate but due to this complete lack of communication. 1.3 It is submitted that, in the facts and the circumstances of the case, and in law, the appellate order so framed be quashed and set aside. ON MERITS: 2.1 In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the AO in not granting credit for Tax Deductions at Source (TDS) of Rs. 14,85,033/- to the Appellant. 2.2 While doing so, the Ld. CIT (A) failed to appreciate that: i. The TDS/Withholding Tax credit was denied for non-furnishing of the requisite documents but without any specific show cause notice in this regard; A.Y. 2015
16. Mount Meru India Private Limited, Mumbai ii. The Appellant’s inability to furnish the TDS certificates was due to the above reasons and amounted to a reasonable and sufficient cause; iii. The income on which the TDS credit is claimed is already offered to tax and this fact was also submitted before the Ld. CIT(A); and: iv. The credit of Withholding Taxes in Foreign Jurisdictions is in the nature of prepaid taxes and should have been granted in the absence of any finding adverse to the said claim; 2.3 It is submitted that in the facts and the circumstances of the case, and in law, the said denial of credit for TDS be granted.
3. The Appellant craves leave to add, alter, delete of modify all or any the above ground at the time of hearing.
The assessee filed the return declaring total income of Rs.50,72,300/-. The assessment was completed u/s 143(3) of the Act wherein it was allowed relief u/s.90 of the Act as it did not file any proof with respect of the claim despite specific query in this regard. In the subsequent appeal, the assessee did not make compliance to as many as four hearing notices. Since the assessee failed to avail the opportunities provided by him, it was concluded by the ld.CIT(A) that it was not interested in filing any details during the appellate proceedings and to avail the opportunity under the principles of natural justice. The assessee merely stated that he had overseas income and was in receipt of withholding tax credit amounting to Rs. 14,85,033/- on which relief u/s 90 of the Act was claimed. However, it was not able to substantiate the claim with documentary evidence. Considering the above factual matrix
It may be stated here that the instant appeal filed before the Bench is substantially delayed. In this regard, an application for condonation of delay has been submitted alongwith an affidavit of Sri Hardik B.Limbachiya, Director as placed on record. It is contended that the assessee is a Private Limited Company which filed appeal before the CIT(A) within the due date. However, during this period and particularly from in 2023, the Company was undergoing severe internal transition as lot of employees resigned and many were relieved of their services. As such, the company was running severely short of staff and therefore there were lapses in replying to certain notices issued by the ld. CIT(A). As a result, he passed an ex-parte order dismissing the appeal for non- prosecution. However, no appeal could be immediately filed against the said order. This was mainly due to the fact that a significant change in management and key personnel took place during that time due to the ongoing friction in the company. In the aftermath, the then Head of Finance, Mr. Anil Devadiga, also resigned on 19.09.2023 with immediate effect. Notably, his email ID was registered on the Income Tax Portal, and therefore all notices from the Income Tax Department were addressed to him. However, due to his sudden resignation there A.Y. 2015-16 Mount Meru India Private Limited, Mumbai was no proper handover of the pending matters, even the critical ones. It is further submitted that those pending matters also included the representation in the appeal before the CIT(A) and pursuing the same in further appeal. The company also faced severe challenges due to multiple changes in the staff and also the software system which was migrated to an ERP based for better internal control and overcoming inefficiencies. It is only on 02.05.2025, that the Company received an intimation from the Department regarding the adjustment of refund against outstanding demand pertaining the impugned year w.r.t. the demand which was the one confirmed by the ld.CIT(A). On receipt of this communication, the company immediately appointed a new Chartered Accountant to review and assess the matter. Thereafter, it was advised that immediately an application for recall of the ex-parte be filed before the ld. CIT(A) since this functionality was now made available on the portal. Therefore, on 02.06.2025, the assessee filed an online application before the ld. CIT(A) to recall the ex-parte order. However, no reply was received on the same for almost a month. Therefore, as advised by the said CA and after collecting the requisite documentation the Company filed an appeal before the ITAT on 28.06.2025 after a delay of 667 days in filing the appeal, computed from the date of the CIT(A) order.
A.Y. 2015-16 Mount Meru India Private Limited, Mumbai 4.1 It is pleaded that the delay is neither deliberate nor intentional and is completely due to reasons beyond the control of the assessee. It is prayed that in the interest of justice this delay in filing the appeal be condoned as the delay is neither willful nor with a malafide intent and for reasons beyond the control of the applicant. No prejudice will be caused to the Respondent if the delay is condoned as the matter is to be finally disposed off on merits. On the other hand, the assessee will be greatly prejudiced by the loss of an effective and only remedy available under the statute against the order of the CIT (A) permanently shutting the door to redress its grievances before this final fact finding authority and if the delay is not condoned grave and irreparable damage will be caused to it. The ld.DR has contested the request for condonation.
On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the present appeal was not intentional but due to unavoidable and sufficient cause. Such a bonafide mistake should have been condoned. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to condone delay can result in a meritorious matter A.Y. 2015-16 Mount Meru India Private Limited, Mumbai being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We therefore, condone the delay setting aside the appellate order.
We have duly perused the records from which it is noticed that in this case, the assessment order as also the appellate order were passed without proper adjudication on merits of the case as the assessee did not submit relevant documents and evidences in support of the issues involved before both the authorities. It is observed that the CIT(A) dismissed the appeal solely on the ground of non-prosecution. There is no doubt that the CIT(A) failed to adjudicate the issues raised in the grounds of appeal
and did not examine the material available on record. Such dismissal without deciding the appeal on merits is contrary to the principles of natural justice. It is settled law that it is the duty of the appellate authority to dispose of an appeal on merits after considering the material on record, even if the appellant fails to appear. We are of A.Y. 2015
16. Mount Meru India Private Limited, Mumbai the considered view that the entire matter needs proper consideration by the AO.As such, we are granting a final opportunity to the assessee to advance his arguments/submissions before the him so as to provide details in connection with the merits of the case and additional evidences, if any to support his contentions. Accordingly, in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the AO for passing the assessment order de novo after allowing adequate opportunity of hearing to the assessee.
Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by him independently and in accordance with law.
In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 29/10/2025.