SUDHA APPARELS LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 11(1), KOLKATA

PDF · subscribers
ITA 2705/KOL/2025Status: DisposedITAT Kolkata11 May 2026AY 2020-20216 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the delay of 538 days was liable to be condoned on the facts presented and the appeal should have been decided on merits. The order of the CIT(A) was set aside, and the appeal was restored to the CIT(A) for disposal on merits.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed due to a delay of 508 days. The assessee claimed the delay was due to the illness of their tax consultant and a subsequent oversight in filing the appeal.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal in limine due to delay without condoning it, and whether the appeal should have been decided on merits.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 250,Section 14A,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH AT KOLKATA

Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

These appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2020-21 dated 13.10.2025. Since the issues in both the appeals are related, they were heard together and are being decided vide this common order for the sake of convenience and brevity.

2.

The assessee is in appeal before the Tribunal raising the following grounds of appeal: I. ITA No. 2704/KOL/2025:

“1. For that the notice issued u/s 143(2) is not in accordance with law, hence the entire assessment is liable to be quashed.

2.

For that the Ld CIT(A) erred in rejecting the petition for condonation of delay even though the affidavit of the consultant filed along with the appeal in support of the delay was not rejected.

Sudha Apparels Ltd.

3.

For that the Ld CIT(A) erred in dismissing the appeal in limine and denying condonation of delay when the delay in filing of appeal as duly explained, the affidavit of the consultant was duly filed in support of the reasons for delay.

4.

For that the Ld CIT(A) should have decided the appeal on merits for which various grounds of appeal were taken in the memo of appeal.

5.

For that the Ld CIT(A) erred in confirming the assessment on the ground of addition under the head provisions for diminution in the value of investment, provision for non-performing asset and contingent provision against standard assets.

6.

For that the Ld CIT(A) erred in confirming the addition of Rs. 1,20,41,791/- u/s 14A

7.

For that the Ld CIT(A) erred in confirming the treatment of agricultural income of Rs. 10,50,000/- as normal taxable income when the same was outside the scope of issues under CASS.” II. ITA No. 2705/KOL/2025:

“1. For that the Ld CIT(A) erred in rejecting the petition for condonation of delay even though the affidavit of the consultant filed along with the appeal in support of the delay was not rejected.

2.

For that the Ld CIT(A) erred in dismissing the appeal in limine and denying condonation of delay when the delay in filing of appeal as duly explained, the affidavit of the consultant was duly filed in support of the reasons for delay.

3.

For that the Ld CIT(A) erred in confirm the penalty when there was no definite charge in the notice u/s 270A nor the assessee was provided any reasonable opportunity of being heard.

4.

For that even on facts of the case the penalty was not imposable.”

3.

We shall first take up ITA No. 2704/KOL/2025 for adjudication.

Brief facts of the case are that the assessee had filed its return of income for AY 2020-21 on 29.01.2021 showing total income of ₹16,57,25,240/- . The case was selected for complete scrutiny under Computer Assisted Scrutiny Selection (in short 'CASS') for the reasons being claim of any other amount allowable as deduction and stock valuation. Statutory notices were issued to the assessee to substantiate its claim but the assessee did not comply with the notices. The Assessing Officer (hereinafter referred to as Ld. 'AO') added a sum of ₹15,21,07,594/- in ITA No(s). 2704 & 2705/KOL/2025 Assessment Year(s) 2020-21 Sudha Apparels Ltd. respect of disallowance of any other amount allowable as deduction being₹1,20,41,791/- in respect of disallowance u/s 14A of the Act, ₹10,50,000/- in respect of disallowance of agricultural income and ₹2,50,000/- in respect of disallowance of claim of deduction u/s 80G of the Act to the total income of the assessee and assessed the total income of the assessee at ₹33,11,74,628/- u/s 143(3) r.w.s. 144B of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who noted that the appeal is barred by limitation by 508 days. The Ld. CIT(A) cited the decisions of the Hon'ble Apex Court in the cases of N. Balakrishnan vs. M. Krishnamurthy, AIR 1998 SC 3222; 746; State of West Bengal vs. Administrator, Howrah Municipality, AIR 1972 SC 749; Collector, Land Acquisition v Mst. Katiji And Others-167 ITR 471 (SC) and Sudhir Kumar Anand V. Dr.Vijay Kumar Anand and others AIR 2012 Delhi 97 and dismissed the appeal of the assessee for the reason of delay in filing the appeal before the Ld. CIT(A).

4.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

5.

Rival contentions were heard and the submissions made have been examined.

6.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Initially the Ld. AR wanted to seek adjournment but the application was withdrawn and the appeal was argued. It was stated that there was sufficient cause for the delay in filing the appeal before the Ld. CIT(A) yet the delay was not condoned. The reasons for the delay are extracted from page 5 of the order of the Ld. CIT(A) as under:

Sudha Apparels Ltd. “Assessment order under section 143(3) r.w.s. 144B was passed on 21.09.2022. The Company promptly forwarded the assessment order to the Tax Consultant for filling appeal. However it was learnt that immediately thereafter the Tax Consultant caught Jaundice and due to his critical sickness stopped attending office. He resumed office after a long time but forgot to file the appeal which was not known to the Company. When the Company received show cause notice dt. 23.02.2024 in respect of scrutiny assessment for A.Y. 2022-23 the Companys representative attended the office of the tax consultant to seek his advice for reply to the said show cause notice. It was at this stage that the Tax Consultant checked the IT. portal and realized that the appeal against the assessment order for A.Y. 2020-21 and also the Penalty orders were not filed. The Tax Consultant has affirmed the above facts by way of an Affidavit which is attached herewith.

The appeal is being filed now. The delay in filling is solely on account of fault on the part of the Tax Consultant because of genuine difficulty without any intention otherwise and was a bonafide mistake. It is humbly prayed that the delay may kindly be condoned and the appeal be kindly admitted for the sake of equity and justice as the stake involved is very big due to artificial and illegitimate tax demand of Rs. 5.34 crores raised in the assessment.”

7.

The Bench was of the view that on the facts mentioned, the delay of 538 days was liable to be condoned and the appeal should have been decided on merits. After examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal before him for disposal of the grounds of appeal taken by the assessee on merit by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.

8.

In the result, the appeal filed by the assessee in ITA No. 2704/KOL/2025 is partly allowed for statistical purposes.

Sudha Apparels Ltd.

9.

Now, we shall take up ITA No. 2705/KOL/2025 for adjudication. Since the facts in this appeal are identical, our findings in ITA No. 2704/KOL/2025 shall mutatis mutandis also apply in the appeal in ITA No. 2705/KOL/2025. The grounds taken by the assessee in this appeal are also partly allowed for statistical purposes.

10.

In the result, both the appeals filed by the assessee in ITA No. 2704/KOL/2025 and ITA No. 2705/KOL/2025 are partly allowed for statistical purposes. Order pronounced in the open Court on 11th May, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 11.05.2026 Bidhan (Sr. P.S.)

Sudha Apparels Ltd. Copy of the order forwarded to:

1.

Sudha Apparels Ltd., 2/5, Sukhsagar Apartment, Sarat Bose Road, L.R. Sarani, Kolkata, West Bengal, 700020. 2. DCIT, Circle-11(1), Kolkata.

3.

CIT(A)-NFAC, Delhi.

4.

CIT-

5.

CIT(DR), Kolkata Benches, Kolkata.

6.

Guard File. //// By order

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Latest GST High Court judgments

Search GST case law →