M/S. ESSEM COMMUNICATIONS (HYD) PVT LTD,HYDERABAD vs. ITO., WARD-17(2), HYDERABAD

ITA 236/HYD/2025Status: DisposedITAT Hyderabad24 April 2026AY 2017-189 pages
AI SummaryAllowed

What were the facts?

The assessee, M/s. Essem Communications (HYD) Private Limited, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2017-18. The appeal was filed with a delay of 295 days. The assessee contended that the delay was due to continuous financial losses, cessation of business operations, and its name being struck off from the Registrar of Companies on 21.07.2017, leading to a lack of funds and staff to pursue tax proceedings. The Revenue objected to the condonation of delay, arguing insufficient cause. The ITAT had to decide whether to condone the delay. The assessment order was passed under Section 144, and the appeal before the CIT(A) was dismissed for non-prosecution.

What did the Tribunal hold?

The Tribunal condoned the delay of 295 days in filing the appeal. The Tribunal found that the assessee company had discontinued its business operations due to continuous financial losses and its name was struck off from the Registrar of Companies. Due to the closure of business, lack of funds, and absence of staff and administrative setup, the assessee was unable to pursue its tax matters diligently before the lower authorities. The Tribunal held that these circumstances constituted a reasonable and sufficient cause for the delay, which was not deliberate or mala fide but due to genuine hardship. The Tribunal relied on the Supreme Court's decision in 'Collector, Land Acquisition v. Mst. Katiji' for a liberal approach in condoning delays. The Tribunal distinguished the cases relied upon by the Revenue, finding their facts distinguishable. The Tribunal also noted that the assessment was made under Section 144 due to non-compliance and the appeal before the CIT(A) was dismissed for non-prosecution. In the interest of substantial justice, the Tribunal set aside the order of the CIT(A) and restored the matter to his file for adjudication on merits, directing the assessee to cooperate and furnish relevant evidence. The appeal was allowed for statistical purposes.

What were the issues?

1. Whether the delay of 295 days in filing the appeal by the assessee should be condoned, considering the reasons provided for the delay (Section 253 of the Income Tax Act, 1961). Assessee's Arguments: The assessee argued that the delay was unintentional and caused by circumstances beyond its control, including continuous financial losses, closure of business, and its name being struck off from the Registrar of Companies. This led to a lack of funds and staff, preventing diligent pursuit of tax matters. The assessee claimed to have learned about the CIT(A)'s order only recently and immediately took steps to file the appeal. Revenue's Arguments: The Revenue objected to the condonation of delay, contending that the assessee failed to demonstrate sufficient cause. The Revenue relied on decisions in 'SLS Developers' and 'Star Organic Foods Inc.' to argue for dismissal on limitation grounds.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 144(1)(b),Section 142(1),Section 253

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘SMC ‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice-

For Respondent: Shri Ashutosh Pradhan, Sr. AR

Per Madhusudan Sawdia, A.M.:

This appeal is filed by M/s. Essem Communications (HYD) Private Limited (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 27.01.2024 for the A.Y.2017-18. 2. At the outset, it is observed that there is a delay of 295 days in filing the present appeal before this Tribunal. The assessee has filed a condonation petition explaining the reasons for such delay. In this regard, the Learned Author

The order continues below.

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