S V DISTILLERIES PRIVATE LIMITED,MALCHAPUR, BIDAR vs. DC/ACIT CIRCLE 6(1)(1), BLR, BANGALORE

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 24/06/2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1077728107(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.

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3.1 During the course of assessment proceedings, the AO observed that although the assessee in its return of income had mentioned to be engaged in business of other manufacturing activity, however, the assessee vide letter dated 16/03/2021 stated

ITA No.1940/Bang/2025 S.V. Distilleries Private Limited, Bidar Page 3 of 9 to have no business activities during the year under consideration. The AO observed that the assessee had claimed business expenses amounting to Rs.1,02,14,492/- in its profit and loss account. The AO held that as the assessee company itself accepted that there was no business activity during the year under consideration, however claimed business expenses of Rs.1,02,14,492/- in its profit & loss account, and accordingly disallowed the entire business expenditure of Rs.1,02,14,492/- and added back the same to the total income of the assessee.

3.2 Further, the assessee was asked to furnish the details of loan taken during the year under consideration. In response, the assessee company furnished its reply and submitted that the assessee company had taken unsecured loan of Rs.14,56,51,759/- from the related parties. The AO further asked the assessee company to furnish ITR, Bank statement of lender to prove identity, creditworthiness and genuineness of the loan creditors. However, the assessee did not submit any evidences. In the absence of documentary evidences, the AO held that the assessee had not fully discharged its onus to prove the creditworthiness of the parties from whom the loans have been taken. Accordingly, a sum of Rs.14,56,51,759/- accepted under the grab of unsecured loan was treated as income of the assessee from undisclosed sources u/s. 68 of the Act r.w.s 115BBE of the Act. Thus, the AO completed the assessment proceedings on a total assessed income of Rs.14,69,11,548/- against the returned loss of (Rs.89,54,703/-).

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ITA No.1940/Bang/2025 S.V. Distilleries Private Limited, Bidar Page 5 of 9 7. Before us, the ld. A.R. of the assessee reiterated the same as stated by the Director in the Affidavit dated 13/08/2025 and vehemently submitted that the assessee was under an honest and bonafide believe that as the assessee’s limitation period for filing the appeal before the ld.CIT(A)/NFAC was expiring during the period 15/03/2020 till 28/02/2022, the assessee will get further time of 90 days from 01/03/2022 to file the appeal before the ld.CIT(A)/NFAC and accordingly the assessee had filed the appeal on 06/04/2022 which is within the 90 days period. Considering the above understanding, the assessee was of the genuine believe that there is no delay in filing of appeal and accordingly in Sl. No. 14 of Form No.35 also, the assessee in response to whether there is delay in filing the appeal, had stated “ NO”. The ld. A.R. of the assessee accordingly prayed that as there is no delay in filing the appeal before the ld. CIT(A)/NFAC and considering the fact that ld.CIT(A)/NFAC had not considered the appeal on merits, the case may be remitted back to the file of ld.CIT(A)/NFAC in the interest of justice & fairplay.

ITA No.1940/Bang/2025 S.V. Distilleries Private Limited, Bidar Page 6 of 9 present case has been filed after delay of 36 days. The ld. CIT(A)/NFAC further held that assessee had not been able to show any “sufficient cause” for not presenting the appeal within the prescribed period u/s. 249(3) of the Act r.w.s section 5 of the Limitation Act and accordingly did not admit the appeal for adjudication on merits & dismissed the appeal in limine. Before us, the Director of the assessee company by way of an Affidavit dated 13/08/2025 as well as the ld. A.R. of the assessee submitted that the assessee was under an honest and bonafide believe that as the assessee’s limitation period for filing the appeal before the ld.CIT(A)/NFAC was expiring during the period 15/03/2020 till 28/02/2022, the assessee will get further time of 90 days from 01/03/2022 to file the appeal before the ld.CIT(A)/NFAC and accordingly the assessee had filed the appeal on 06/04/2022 which is within the 90 days period. Considering the above understanding the assessee was of the believe that there is no delay in filing of appeal and accordingly in Form No.35 also in response to whether there is delay in filing the appeal, the assessee had categorically stated “ NO”.

9.1 We are of the considered opinion that the ld.CIT(A)/NFAC in holding that the assessee filed the appeal after delay of 36 days had completely ignored the directions of the order of the Hon’ble Supreme Court in suo motu cognizance for extension of limitation as reported in (SC)(2022) 441 ITR 722 wherein the Apex Court directed as under-

“5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions :-- I. The Order, dated 23-3-2020 is restored and in continuation of the subsequent orders dated 8-3-2021, 27-4-2021 and 23-9-2021, it is directed that the period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may

ITA No.1940/Bang/2025 S.V. Distilleries Private Limited, Bidar Page 7 of 9 be prescribed under any general or special laws in respect of all judicial or quasi[1]judicial proceedings. II. Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1-3-2022. III. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2-2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3- 2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand excluded in computing the periods prescribed under sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.”

Thus, the Hon’ble Supreme Court of India in paragraph III as above has categorically stated that in cases where the limitation would have expired during the period between 15/03/2020 till 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022. Further, in the event the actual balance period of limitation remaining, w.e.f. 01/03/2022 is greater than 90 days, that longer period shall apply. Thus, in our considered opinion, the paragraph III of the above Apex Court order dated 10/01/2022 categorically talks about the cases where the limitation period would have expired during the period between 15/03/2020 till 28/02/2022.

9.2 In the present case, undisputedly the limitation period for filing the appeal before the ld. CIT(A)/NFAC had expired during the period between 15/03/2020 till 28/02/2022 and accordingly as per the above direction, the assessee shall have a limitation period of 90 days from 01/03/2022. We take a note of the fact that the assessee had filed the appeal before the ld. CIT(A)/NFAC on 06/04/2022 &

ITA No.1940/Bang/2025 S.V. Distilleries Private Limited, Bidar Page 8 of 9 therefore in view of the aforesaid directions, there is no delay in filing the appeal before the ld. CIT(A)/NFAC. In view of the above, the observation of the ld. CIT(A)/NFAC that the appeal is found to have been filed delayed by 36 days is illegal & bad-in law. In holding so, we also endorse the action of the assessee in giving declaration in form 35 by stating in Sl. No. 14 of form 35 that there is no delay in filing the appeal. In our considered view when there is no delay in filing the appeal in view of the above directions of the Hon’ble Apex court in Order dated 10/01/2022, then question of filing the explanation for the delay or request for condonation does not arise at all in the case of the assessee.

9.3 Further, now having held that there was no delay in filing the appeal before the ld. CIT(A)/NFAC and considering the fact that the ld. CIT(A)/NFAC dismissed the appeal in limine, we deemed it fit and proper to remit the entire issues in dispute to the file of ld.CIT(A)/NFAC to decide on merits of the case afresh in accordance with law. Needless to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the relevant documents/record to substantiate its claim. It is ordered accordingly.

Order pronounced in the open court on 29th June, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 29th June, 2026. VG/SPS

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Copy to:

Asst. Registrar, ITAT, Bangalore.