KAMINI ENTERPRISE (FORMERLY KNOW AS KAMINI JEWELS),MUMBAI vs. INCOME TAX OFFICE WARD 18(2)(1), MUMBAI

At the outset, it is noticed that there is a delay of 854 days in filing the appeal for Assessment Year 2013-14 and a delay of 153 days in filing the appeal for Assessment Year 2016-17. In support of the petitions seeking condonation of delay, the assessee has placed on record an affidavit of Shri Ritesh Amritlal Jain, partner of the assessee firm. From the facts brought on record, it transpires that two of the partners of the firm, namely Shri Hemang K. Datanwala and Shri Amritlal G. Jain, expired on 26.02.2019 and 10.12.2019 respectively. It has further been explained that Shri Amritlal G. Jain was primarily looking after the affairs relating to accounts, taxation and statutory compliances of the firm and was also handling all communications pertaining to income tax matters. The email address and mobile number registered on the Income Tax Portal were under his control and, after his demise, the surviving partner neither had access to such registered credentials nor was aware of any pending proceedings before the Income Tax Department. It has further been explained that the surviving partner came to know about the outstanding tax demand and consequential litigation only when he accessed the Income Tax Portal in January, 2026, whereupon copies of the assessment orders and the orders passed by the learned CIT(A) came to his notice. Immediately

On merits, the principal dispute involved in both the assessment years pertains to the assessee’s claim for deduction under section 10AA of the Act in respect of its manufacturing activities carried on in the Special Economic Zone. Further, in Assessment Year 2016-17, the assessee has also challenged the disallowance of bad debts. It is noticed that the learned CIT(A) has dismissed the appeals ex parte on account of non-compliance with the notices issued during the course of appellate proceedings. The material available on record, however, indicates that the impugned proceedings

Before us, both the learned representatives fairly submitted that the issues involved require fresh examination at the level of the Assessing Officer after considering the evidences and explanations which the assessee seeks to place on record. Having regard to the peculiar facts and circumstances of the case and bearing in mind the principles of natural justice, we are of the considered opinion that the matter deserves to be restored to the file of the Assessing Officer for fresh adjudication. Accordingly, the impugned orders passed by the learned CIT(A) are set aside and the issues relating to the assessee’s claim of deduction under section 10AA as well as the claim of bad debts, wherever applicable, are restored to the file of the Assessing Officer for adjudication de novo. The assessee shall be at liberty to furnish all relevant documents, evidences and explanations in support of its claims and the Assessing Officer shall examine the same independently, in accordance with law, after providing adequate and effective opportunity of hearing to the assessee. Thereafter, a speaking

In the result, both the appeals filed by the assessee are allowed for statistical purposes.