VSJ HOLDINGS,COIMBATORE vs. ITO, NCW-1(1), COIMBATORE

Brief facts of the case emanating from the records are that the assessee is a firm, deriving income from rent from hostel building for college students and IT professionals and has filed its return of income for the AY 2023-24 on 25.10.2023, declaring income from business u/s.44AD of the Act and shown a total income of Rs.19,60,440/-. The case was selected for scrutiny through CASS to verify the low rental income shown in return of income as compared to that shown in Form 26AS for the year under consideration, accordingly, statutory notices were issued to the assessee and by calling for details. In response, the assessee has furnished his reply with details for consideration. On perusal of the documents submitted by the assessee, the AO completed the reassessment by passing an order u/s.143(3) r.w.s 144B of the Act dated 25.02.2025 by arriving income of Rs.1,14,35,893/- from house property after providing 30% standard deduction of Rs.49,01,096/- from gross rent receipts of Rs.1,63,36,989/- by rejecting the rental income @ 12% of gross rent received and declared under the head business income.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 29.04.2025 with a delay in filing an appeal.

At the outset, we observed that the ld.CIT(A) dismissed the appeal filed by the assessee as non-maintainable due to delay in filing an appeal by 32 days. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the assessee could not file the appeal before the first appellate authority within the prescribed time limit due to the auditor being preoccupied with the time barring assessment. Further, ld.AR of the assessee argued that the ld.CIT(A) failed to appreciate that the reporting of such receipts as business of the assessee was correct on various facets and ought to have appreciated that the arbitrary re-shifting of the head of income in

Per contra, the ld.DR submitted that the appeal was to be filed before the ld.CIT(A) by the assessee within 30 days of the service, but the assessee has filed this appeal with delay of 32 days. The assessee has been negligent in filing the appeals within the time limit provided and hence prayed for confirming the order of the ld.CIT(A).

We have heard the ld.DR and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by rejecting the claim of the assessee in declaring the rental income u/s.44AD of the Act and by considering the information available with the department treating the rental income as income from house property after providing standard deduction at 30% from gross rent receipts. On appeal filed by the assessee, the same has been dismissed in limine by the ld.CIT(A), NFAC due to delay in filing the appeal before the first appellate authority.

In view of the foregoing facts and circumstances, and in order to advance the cause of substantial justice, we are inclined to grant one more opportunity to the assessee. Accordingly, the delay in filing the appeal before the ld. CIT(A) is hereby condoned, as the assessee has duly set out the reasons for such delay in Form No.35, which, in our considered opinion, constitutes sufficient cause. Consequently, the impugned order of the ld.CIT(A) are set aside, and the matter is restored to the file of the ld.CIT(A) with a direction to adjudicate the appeal afresh on merits, in accordance with law, after affording a reasonable opportunity of being heard to the assessee. The assessee is also

In the result, appeal filed by the assessee is allowed for statistical purposes.