REAL GEM BUILDTECH PRIVATE LIMITED,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 8(1), MUMBAI

Since the issue arising for our consideration at this stage is common, all the appeals were heard together and are being disposed of by this consolidated order. ITA No. 5286/Mum/2026 for A.Y. 2012-13 is taken as the lead case, and our observations therein shall apply mutatis mutandis to the remaining appeals.

The assessee filed its return of income for the impugned assessment year declaring Nil income after carry forward of loss of Rs.13,36,75,074/-. The case was selected for scrutiny and assessment was completed under Section 143(3) of the Act on 13.03.2015. The Ld. AO, inter alia, made various disallowances in respect of the cost/depreciation relating to sample flats, commission and brokerage expenditure, filing fees and Section 14A of the Act. Consequently, the returned loss was reduced and the total loss was determined at Rs.3,10,94,911/-. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A). The record indicates that notices were issued on various dates during the appellate proceedings. Although a written submission dated 20.01.2021 was available on record, the Ld. CIT(A) recorded that the assessee had subsequently sought adjournments on several occasions and had not filed the paper books referred to in its earlier written submissions. The last opportunity was granted through notice dated 13.02.2026, but there was no compliance. The assessee has specifically challenged the impugned order before us, inter alia, on the ground that the appeal was disposed of without proper adjudication of the issues on merits and that the submissions already available on record were not duly considered.

The Ld. AR submitted that the non-compliance before the Ld. CIT(A) was neither deliberate nor intentional. In support of the explanation, the assessee has filed an affidavit before the Bench explaining the circumstances which prevented effective representation before the first appellate authority. It was submitted that the assessee-company was earlier a 100% subsidiary of DB Realty Limited. A Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013 had earlier been proposed in relation to transfer of the “DB Crown” Project undertaking to Kingmaker Developers Private Limited, though the said scheme ultimately did not materialise. The relevant part of the affidavit is reproduced as below:-

The Ld. AR accordingly prayed that, without entering into the merits of the additions/disallowances at this stage, all the appeals may be restored to the file of the Ld. CIT(A) for fresh adjudication so that the assessee may be afforded one effective opportunity to place the relevant documents, paper books and submissions on record. The affidavit itself seeks one further opportunity to present the matters properly and effectively before the revenue authorities.

The Ld. DR relied upon the impugned orders of the Ld. CIT(A) and submitted that sufficient opportunities had already been afforded to the assessee during the appellate proceedings. Despite repeated notices, the assessee had either sought adjournments or failed to comply with the notices and had not placed the complete documentary evidence/paper books before the Ld. CIT(A). The Ld. DR, therefore, supported the action of the Ld. CIT(A) in deciding the appeals on the basis of the material available on record.

We have heard the rival submissions and perused the material available on record, including the affidavit filed by the assessee explaining the circumstances leading to non-compliance before the Ld. CIT(A). It is undisputed that several opportunities were afforded during the first appellate proceedings. At the same time, the record also shows that a written submission dated 20.01.2021, referring to an earlier submission dated 27.10.2016, was available before the Ld. CIT(A), though the corresponding paper books were not uploaded. 6

We have also considered the explanation contained in the affidavit. The assessee has attributed the failure to effectively pursue the appellate proceedings to the change in management during F.Y. 2023-24 and the consequent difficulty in effective handing over of the documents, files and pending appeal papers from the earlier auditor/tax consultant. Considering the totality of the facts and circumstances, and without expressing any view on the merits of the grounds raised by the assessee, we deem it appropriate that the issues be examined afresh by the first appellate authority after providing the assessee an effective opportunity to place its case on record.

Accordingly, the impugned orders are set aside and all these appeals are restored to the file of the Ld. CIT(A) for fresh adjudication in accordance with law. The Ld. CIT(A) shall afford reasonable opportunity of being heard to the assessee and shall consider the submissions and documentary evidence that may be filed before him before deciding the respective appeals. The assessee is also directed to be diligent and cooperative in the set-aside proceedings and to comply with the notices issued by the Ld. CIT(A) without seeking unnecessary adjournments. We clarify that we have not expressed any opinion on the merits of any of the additions/disallowances or other grounds raised in these appeals, and all such issues are left open for consideration by the Ld. CIT(A) in accordance with law.

In the result, all the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 31st day of August 2026 Sd/- Sd/- (ARUN KHODPIA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 31/08/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file.