NARAYANI UDYOG PRIVATE LIMITED,KOLKATA vs. ITO, WARD 10(2), KOLKATA

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ITA 1237/KOL/2025Status: DisposedITAT Kolkata13 August 2026AY 2014-20155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay, considering the liberal interpretation of sufficient cause for delay. Regarding the substantive issue, the Tribunal restored the matter to the Assessing Officer to verify the assessee's claim that shares were allotted to an NRI and to re-examine the applicability of Section 56(2)(viib).

What were the facts?

The assessee filed an appeal with a significant delay of 340 days, citing the director's illness as the reason. The core issue involved an addition made under Section 56(2)(viib) of the Income Tax Act concerning shares allotted to an individual claimed to be an NRI.

What were the issues?

Whether the delay in filing the appeal is justifiable, and whether Section 56(2)(viib) is applicable when shares are allotted to an NRI, requiring verification of NRI status.

Which sections of the Income-tax Act were involved?

Section 56(2)(viib),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI RAKESH MISHRA

For Appellant: Smt. Rajshree Dutta, AR
For Respondent: Shri Ujjawal Mandal, Sr. DR
Hearing: 10.08.2026Pronounced: 13.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.1237/KOL/2025 Assessment Year:2014-15

Narayani Udyog Private Limited Vs. ITO, Ward-10(2), Kolkata 2nd Floor, 5 Kabir Road, West Bengal-700026 [PAN: AADCN0074F] APPELLANT RESPONDENT Appellant by : Smt. Rajshree Dutta, AR Respondent by : Shri Ujjawal Mandal, Sr. DR Date of hearing : 10.08.2026 Date of Pronouncement : 13.08.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER: This Appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal) (‘Ld. CIT(A)’ for short) dated 10.04.2024, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2014-15. 2. There is a delay of 340days in filing the Appeal. The Assessee filed an application along with affidavit for condonation of delay narrating the reasons which are reproduced as under: -

“1. That I am one of the Director of the assessee Company bearing CIN- U21090WB2009PTC135030 and fully acquainted with the assessment made for the A.Y. 2014-15.

ITA No.1237/Kol/2025 Narayani Udyog Private Limited; A.Y: 2014-15 2. That an appeal has been preferred by us before the Hon’ble Income Tax Appellate Tribunal, Kolkata against the Order of the Learned ADDL/JCIT(A)-12 Mumbai through online for the A.Y. 2014-15 on dated 10/04/2024. 3. The said Order of the Learned Appellate Authority/NFAC was passed & uploaded in the IT Portal. Therefore, the appeal should have been instituted within 60 days from the date of such Order i.e., on or before 09/06/2024. 4. That as I, concerned Director is a senior citizen and had been suffering from several prolonged illness since February, 2024. I got admission & undergone the medical surgery. The copies of the prescription/s of the several dates are attached herewith. 5. We were unaware regarding passing of the Order & came to know of the fact after being communicated from the department. That time the assessee Company was unable to take any necessary steps owing to my illness. Once, my condition’s improved, I had contacted with the Authorised advocate and assigned to them for handling the matter in the month of May, 2025. 6. Subsequently, some more time was required for drafting & preparing the petition and receiving of the signed petition by the A/R thereafter.” 3. The Ld. AR reiterating the averments made in the Application, sought for condoning the delay in filing the present Appeal.

4.

DR submitted that, there is no sufficient cause to condone the inordinate delay, thus sought for dismissal of the present appeal on delay in latches.

5.

We have heard both the parties and perused the material. The Hon'ble Supreme Court time and again clarified that the delay in filing the appeal with sufficient cause should be looked into in a liberal way and shall condone the delay. In the landmark decision in Collector, Land & Acquisition vs. Mst. Katiji& Others (1987) 167 ITR 471 (SC),

ITA No.1237/Kol/2025 Narayani Udyog Private Limited; A.Y: 2014-15 the Hon'ble Supreme Court settled the law that the delay when supported by justifiable reasons, must make way for the cause of substantial justice. Considering the above facts and circumstances, we condone the delay of 340 days in filing the Appeal.

6.

Brief facts of the case are that, An Assessment Order came to be passed on 23.12.2016 by making addition of Rs.6,95,800/- u/s 56(2)(viib) of the Act. Aggrieved by the Assessment Order dated 23.12.2016, Assessee preferred an Appeal before the Ld. CIT(A). It was the specific case of the Assessee before the Ld. CIT(A) that the Assessee has allotted share to an NRI namely, Shri Niket Agarwal and the provisions of section 56(2)(viib) of the Act is not applicable in the case where the share is allotted to NRI. The Ld. CIT(A) observed that Assessee has not produced any documentary evidence in support of the claim of the Assessee that Shri Niket Agarwal is an NRI and confirmed the addition made by the Assessing Officer. Aggrieved by the Order of the Ld. CIT(A) dated 10.04.2024, Assessee preferred the present Appeal.

7.

The Learned Counsel for the Assessee submitted that the Application of provision of section 56(2)(viib) of the Act is bad in law as the shares were allotted to an NRI. The Assessee has also produced

ITA No.1237/Kol/2025 Narayani Udyog Private Limited; A.Y: 2014-15 the passport of Shri Niket Agarwal in his paper book to whom the share were allotted. Thus, sought for allowing the Appeal.

8.

Per contra, the Ld. DR submitted that no proof of the NRI status of Niket Agarwal has been produced before the Authorities below. Therefore, the Assessing Officer has rightly made the addition, which has been confirmed by the Ld. CIT(A), thus the order impugned requires no interference at the hands of the Tribunal, sought for dismissal of the Appeal.

9.

We have heard the parties and perused the material available on record. It was the specific contention of the Assessee that Assessee has allotted to one Shri Niket Agarwal, therefore, the provisions of section 56(2)(viib) of the Act is not applicable. However, Assessee has not produced any documents to substantiate its claim. The Assessee now produced the copy of the passport of said Shri Niket Agarwal. In view of the above facts and circumstances, we restore the issue to the file of the Assessing Officer with a direction to Assessee to prove that the shares were indeed allotted to Shri Niket Agarwal who is an NRI. The Assessing Officer is also directed to verify the claim and documents produced by the Assessee and shall frame Assessment Order in accordance with law.

ITA No.1237/Kol/2025 Narayani Udyog Private Limited; A.Y: 2014-15 10. In the result, Appeal of the Assessee is partly allowed for statistical purposes.

Order pronounced on 13.08.2026. Sd/- Sd/- (RAKESH MISHRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13.08.2026 DP, PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY//

(MANISH BHOI) DEPUTY REGISTRAR KOLKATA BENCHES, KOLKATA

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