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Facts
The issue relates to unexplained cash credit under Section 68 of the Income Tax Act. The Assessing Officer (AO) made an addition regarding creditors due to unreconciled ledger balances. The CIT(A) dismissed the appeal for non-submission by the appellant despite multiple opportunities.
Held
The Tribunal condoned the delay of 770 days in filing the appeal before the ITAT, subject to payment of cost. The issue was remitted back to the CIT(A) to provide one more opportunity to the appellant to present their case.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the CIT(A) should be directed to provide another opportunity to the appellant when the appeal was dismissed for non-compliance.
Sections Cited
68
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Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
2. Aggrieved by the order of the Ld. AO, an appeal was filed before Ld. CIT(A). From the order of this first appellate authority, it is observed that four opportunities were given to the appellant to give his submissions relating to the addition made by the Ld. AO. At page No. 3 of this appellate order, Ld. CIT(A) has mentioned that there is neither written submission nor any request for adjournment for all the four opportunities given by him. Then the Ld. CIT(A) has dismissed the appeal.
3. Aggrieved by the order of Ld. CIT(A), an appeal was filed before the ITAT with following grounds of appeal :-
2 Vesta Building Products P. Ltd. 1. On the Facts and circumstances of the case and in law the Ld. CIT(A) grossly erred in confirming the adjustment made by DCIT in the assessment order.
2. On the Facts and circumstances of the case & in law, the Ld. CIT(A) has grossly erred in confirming the adjustment of Rs. 94,72,889/- U/S 68 made by DCIT in the assessment
4. During the appeal hearing before the ITAT, Ld. AR has admitted that there is delay of filing an appeal before the ITAT nearly about 770 days. It was also submitted that an affidavit was filed in this regard explaining the reasons for delay. For the sake of clarity, the contents of affidavit are reproduced below : “I, RAHUL SANKHE Director of director of Vesta Building Products Private Limited having Office at B-23/92, Kalina Co-Op. Hsg. Soc. Sundar Nagar, Kalina, Santacruz (E) Mumbai, Maharashtra-400098, India, the Applicant, do hereby solemnly affirm and state as under :
I say that, Pursuant to the Assessment Order dated 30/12/2019 passed by the Id. AO., we had filed an appeal before the Ld. Commissioner of Income Tax (Appeal) on 31/01/2020.
That said appeal was fixed for hearing, and we had asked our Chartered Accountant to represent us and make proper submissions in the said appeal.
That we were given to understand by our the then Chartered Accountant that the submissions are being filed.
That we only came to know that our appeal has been dismissed by the Ld. Commissioner of Income Tax (Appeal) when the Ld. Assessing officer somewhere in end of January 2025 pressed for the demand to be paid on account of the dismissal of appeal by the Ld. Commissioner of Income Tax (Appeal) vide order dated 10/02/2023.
That till some-where in end of January 2025. We were completely unaware of the fact that our appeal has been dismissed by the Ld. Commissioner of Income Tax (Appeal).
In the above circumstances, we approached another Counsel (Chartered Accountant) to understand the recourse to the said matter.
7. Under the Guidance of another Counsel, we are filing this appeal before the Hon'ble Income Tax Appellate Tribunal with a prayer to condone the delay in filing of the Appeal which is nearly about 770 days.
3 Vesta Building Products P. Ltd.
The said delay is caused due to the reason that we were unaware of the fact that our earlier Chartered Accountant did not inform about non-submission as well as the disposal of the Appeal by the Ld. Commissioner of Income Tax (Appeal).
We the Applicant humbly pray that the in the Interest of Justice an opportunity be provided to us and delay caused in filing the appeal may please be condoned otherwise it will cause a Genuine hardship on us. I state that the above is true to best of my knowledge.
5. In view of the above, Ld. AR submitted sincerely that there is delay for reasons beyond the control of appellant and hence prayed that the delay may be condoned for the reasons mentioned in the affidavit. Ld. DR opposed the submissions made by Ld. AR of the appellant and argued that the delay should be condoned because there is total non-compliance on his part before Ld. CIT(A) and again there is a delay in filing the appeal before the ITAT. It was also submitted by Ld. DR that in the first round of appeal, Hon'ble ITAT has already confirmed all these additions and hence delay should not be condoned and appeal should be dismissed on the threshold of appeal itself. The Ld. DR heavily relied on the order of Hon'ble ITAT and as there is no change in the circumstances, it was argued that the additions should be confirmed.
6. Heard both sides. It is a fact that the appellant is non-complaint before Ld. CIT(A) but in the earlier round of appeal, it is observed that the appellant has filed submissions before the Ld. AO and Ld. CIT(A) and even before ITAT. The order of ITAT which confirmed the additions of Ld. AO on merits, was recalled. After taking into consideration, the reasons mentioned in the affidavit and also fact that the appellant has appeared and presented their case before this lower authorities in the first round of appeal and also before the Ld. AO in the second round of appeal, the Bench has decided to condone the delay of 770 days with a levy of cost of Rs. 50,000/-. From the impugned order of Ld. CIT(A), it is observed that the First Appellate Authority confirmed the addition because appellant did not file reply relating to reconciliation of closing balances of partners. It is 4 Vesta Building Products P. Ltd. decided by the Bench that an opportunity is to be given to appellant to present all the facts before Ld. CIT(A). In view of the same, the issue is remitted back to the file of Ld. CIT(A) with the direction to give one more opportunity to the appellant. The appellant is directed to cooperate with Ld. CIT(A) and file all its submissions before him without delay as this is second round of appeal. The Ld. CIT(A) is directed to go through all the earlier orders and submissions of appellant and pass an order afresh after taking into the submissions made by appellant. Further, the Ld. CIT(A) is directed to pass the order only after appellant pays the cost of Rs. 50,000/- to “Maharashtra State Legal Aid Fund”.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 08/10/2025.