B NANJI ENTERPRISES LTD.,AHMEDABAD vs. THE ACIT, CIRCLE-1(1)(1), AHMEDABAD

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ITA 2395/AHD/2025Status: DisposedITAT Ahmedabad05 August 2026AY 2010-118 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay, set aside the CIT(A)'s ex-parte orders, and restored the matters to the file of the Assessing Officer for de novo assessment. Penalty orders were deleted, with liberty to initiate fresh proceedings if warranted.

What were the facts?

The assessee filed appeals with a significant delay, citing reasons such as the CIT(A) issuing notices via email despite a denial, leading to ex-parte orders. The assessee also faced financial difficulties and litigation.

What were the issues?

Whether the delay in filing appeals should be condoned due to ex-parte orders passed without proper service of notice, and the consequential impact on quantum additions and penalty levies.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 271AAA,Section 2(24)(x),Section 36(1)(va),Section 14A,Section 234A,Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SMT. ANNAPURNA GUPTA

For Appellant: Shri Tushar Hemani, Sr. Advocate &, Ms. Yashvi Mashruwala, AR, Shri Rignesh Das, CIT. DR & Ms
For Respondent: Shri Rignesh Das, CIT. DR & Ms
Hearing: 12/05/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. Nos. 2394 to 2398/Ahd/2025 (िनधा�रण वष� / Assessment Years : 2005-06, 2010-11, 2012-13, 2015- 16, 2016-17, ) & आयकर अपील सं./I.T.A. Nos. 2399 to 2401/Ahd/2025 (िनधा�रण वष� / Assessment Years : 2016-17, 2017-18 & 2018-19) बनाम B Nanji Enterprises Ltd. Assistant Commissioner / of Income Tax 5, Moorti Bunglows, Vs. Ashoknagar Soc., B/h. Circle 1(1)(1), Ahmedabad Sundarvan, Satellite, Ahmedabad, Gujarat - 380015 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAACB7702P (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Tushar Hemani, Sr. Advocate & Ms. Yashvi Mashruwala, AR ��यथ� क� ओर से/Respondent by : Shri Rignesh Das, CIT. DR & Ms. Urvashi Mandhan, Sr. DR Date of Hearing 12/05/2026 05/ 08/2026 Date of Pronouncement (आदेश)/ORDER Per Sanjay Garg, Judicial Member:

The captioned appeals relate to the same assessee and are against separate orders passed by the Ld. Commissioner of Income Tax (Appeals) for different assessment years, wherein ITA Nos.

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 2 – 2296/Ahd/2025, 2397/Ahd/2025, 2398/Ahd/2025, 2400/Ahd/2025 & 2401/Ahd/2025 are in relation to quantum additions, whereas, ITA Nos.2394/Ahd/2025 & 2399/Ahd/2025 are against the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and ITA No.2395/Ahd/2025 is against the levy of penalty u/s 271AAA of the Act.

2.

There is a considerable delay in filing of all the appeals.

3.

Since, the facts and issue involved in all the appeals are identical and the same pertain to the same assessee, hence, the same have been heard together and are being disposed of by this common order.

4.

Assessee’s appeal in ITA No. 2397/Ahd/2025 for AY 2015- 16 is taken as a lead case for the purpose of narration of facts.

ITA No. 2397/Ahd/2025

5.

The assessee has taken following grounds in this appeal:

“1. The Ld. CIT(A) has erred in law and on facts of the case in issuing notices on email and disposing the appeal ex-parte despite specific denial for service of notices through email in the appeal memo. 2. The Ld. CIT(A) has erred in law and on facts of the case in deciding the appeal ex-parte in violation of principles of natural justice.

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 3 – 3. The Ld. CIT(A) has erred in law and on facts of the case in dismissing the appeal without adjudicating merits of the case in violation of S.250(6) of the Act. 4. The Ld. CIT(A) has erred in law and on facts of the case in upholding disallowance employees contribution to PF amounting to Rs. 51,224/- u/s. 2(24)(x) r.w.s. 36(1)(va) of the Act. 5. Alternatively and without prejudice, the lower authorities erred in law and on facts of the case in making disallowance of contributions made within the grace period. 6. The Ld. CIT(A) has erred in law and on facts of the case in upholding disallowance of Rs. 30,10,283/-u/s. 14A r.w. Rule 8D. 7. Alternatively and without prejudice, disallowance u/s. 14A r.w. Rule 8D shall not exceed exempt income earned by the appellant. 8. The Ld. CIT(A) has erred in law and on facts of the case in upholding disallowance of prior period expenditure of Rs. 67,18,890/-. 9. Both the lower authorities failed to appreciate that the liability to pay Rs. 67,18,890/- crystallized during the year under consideration. 10. The Ld. CIT(A) has erred in law and on facts of the case in upholding disallowance of accrued0020expenditure of Rs. 56,24,867/-allowable under the provisions of the Act. 11. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 12. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s. 234A/B/C/D of the Act.

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 4 – 13. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty proceedings under various sections of the Act. 14. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.”

6.

This appeal of the assessee is time barred by 856 days. A separate application for the condonation of delay in shape of affidavit of Shri Sandip Bhikhubhai Padsala, Director of the assessee Company has been filed, wherein, it has been deposed that in the appeal memo (Form No.35) filed before the Ld. CIT(A), the assessee had specifically denied for receiving any notice / communication through email, despite this, the Ld. CIT(A) sent the notices / communication of hearing through email only and no notice was served in physical mode, therefore, the case of the assessee remained unrepresented before the CIT(A) and that even the assessee did not come to the knowledge of the passing of the order of the CIT(A), resulting into passing of the ex parte order of the CIT(A) and delay in filing the appeal before this Tribunal. It has been further deposed that the assessee company was facing severe financial losses since F.Y. 2017-18 and the Directors of the assessee company were under severe mental pressure. Further, various institutions, banks, finance companies etc. had initiated loan recovery proceedings against the assessee company and the assessee was facing various litigations instituted against it, the details of which, has been given at page 2 of the affidavit. Further, it has been pleaded that the deponent and his father, namely, Shri Bhikhubhai N. Padsala were main Directors of the

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 5 – company and both the deponent and his old aged father were also suffering from medical conditions, especially, due to Covid-19 post effects. It has been further pleaded that despite all these difficulties, the assessee company was trying very hard to stand on its legs and clear all the dues etc., and due to the aforesaid bundle of factors, the delay in filing the present appeal has occurred. The Ld. Counsel for the assessee has submitted that the assessee has a fair case on merits. That the assessee could not represent its case before the lower authorities due to the aforesaid multiple factors and compulsions, which were beyond the reasonable control of the assessee. The Ld. Counsel has submitted that the assessee may be given an opportunity to present its case before the Assessing Officer (in short ‘the AO’) and that the assessee may be burdened with some reasonable costs for failure of the assessee in not properly representing the case before the lower authorities.

7.

The Ld. DR, on the other hand, has relied upon the findings of the lower authorities.

8.

Considering the above submissions of the Ld. AR and also after hearing the Ld. DR, we are of the view that the interests of justice will be well served, if the assessee be given an opportunity to present its case before the Ld.AO. So far as the negligence on the part of the assessee in not properly representing its case before the lower authorities is concerned, the asessee is burdened with costs of Rs.10,000/- to be deposited in the Prime Minister’s National Relief Fund. The assessee will deposit the aforesaid cost

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 6 – amount within 60 days from the receipt of copy of this order and will produce the proof of such deposit before the Ld.AO. Subject to the fulfilment of the aforesaid condition, the delay in filing the present appeal is hereby condoned, the impugned order of the CIT(A) is set-aside and the matter is restored to the file of the AO. The AO will pass the assessment order afresh after giving due opportunity to the assessee to furnish the requisite details and evidences.

9.

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

ITA Nos.2396, 2398, 2400 & 2401/Ahd/2025

10.

In all these appeals also, the assessee is aggrieved by the action of the CIT(A) in confirming the quantum additions made by the AO. The facts and issues are identical and that have been discussed above in ITA No.2397/Ahd/2025. In view of our observations made above, the delay in all these appeals is, hereby, condoned subject to deposit of Rs.10,000/- each in respect of each of the above appeals and the matter is restored to the file of the AO in all these appeals for denovo assessment as per the directions as given above.

11.

In the result, all these four appeals filed by the assessee are treated as allowed for statistical purposes.

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 7 –

ITA Nos.2395 & 2399/Ahd/2025

12.

ITA Nos. 2395/Ahd/2025 is against the levy of penalty u/s 271AA of the Act and 2399/Ahd/2025 is against the levy of penalty u/s 271(1)(c) of the Act. Since, we have restored the matter in respect of quantum addition to the file of the AO, therefore, the impugned penalty orders, at this stage, have no legs to stand upon. Therefore, the impugned penalties are, hereby, ordered to be deleted, however, with the observation that, if in the set aside / de novo assessment proceedings, as ordered above, the AO will be of the view that the penalty proceedings are required to be initiated, he will be at liberty to do so. Both the aforesaid penalty appeals are, therefore, treated as allowed.

ITA No.2394/Ahd/2025

13.

This appeal is against the levy of penalty u/s 271(1)(c) of the Act. As observed above, the assessee has pleaded that it could not represent its case before the CIT(A) because of bundle of factors as noted above while adjudicating ITA No.2397/Ahd/2025. In view of this, the delay in filing the present appeal is, hereby, condoned and the matter in ITA No.2394/Ahd/2025 is restored to the file of the CIT(A) for decision afresh on merits after giving proper opportunity to the assessee to present its case. The assessee will also remain vigilant and take care of the notice, if any, issued by the Ld. CIT(A) on the email of the assessee and

ITA Nos.2394 to 2401/Ahd/2025 [B Nanji Enterprises Ltd.] - 8 – present its case, accordingly, before the CIT(A), irrespective of the fact whether or not the assessee has given mandate in the Appeal Form 35 for issuance of notice through email. With the above observations, this appeal of the assessee is treated as allowed for statistical purposes.

14.

In the combined result, assessee’s appeal in ITA Nos. 2397, 2396, 2398, 2400 & 2401/Ahd/2025 are treated as allowed for statistical purposes, ITA No.2394/Ahd/2025 is also treated as allowed for statistical purposes, whereas, ITA Nos.2395 & 2399/Ahd/2025 stand allowed in terms as indicated above.

This Order pronounced on 05/08/2026 under Rule 34(4) of the ITAT Rules

/-Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/08/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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