AIR WIND GREEN ENERGY LIMITED,BHAVNAGAR vs. ITO CIRCLE-1, BHAVNAGAR

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ITA 670/AHD/2026Status: DisposedITAT Ahmedabad22 April 2026AY 2022-238 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that matters should be decided on merits, especially when a plausible explanation for delay is provided. Given the substantial additions and dismissal on a technicality, the case was set aside for de novo adjudication.

What were the facts?

The assessee's appeal was dismissed by the CIT(Appeals) due to a 185-day delay, without adjudicating the merits of the case. The assessee claimed the delay was due to a consultant's lapse and provided an affidavit.

What were the issues?

Whether the CIT(Appeals) erred in dismissing the appeal solely on grounds of limitation without considering the merits, and whether the assessee's explanation for the delay constituted a 'sufficient cause'.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 37

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Varis Isani, Advocate
For Respondent: Shri Alpesh Parmar, CIT-DR
Hearing: 07.04.2026Pronounced: 22.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.670/Ahd/2026 (Assessment Year: 2022-23) Air Wind Green Energy Ltd., Vs. Income Tax Officer, 110, Swarapark Lane, Circle-1, First Floor, Nr. Atabhai Chowk, Bhavnagar Bhavnagar-364002 [PAN No.AANCA9739J] (Appellant) .. (Respondent) Appellant by : Shri Varis Isani, Advocate Respondent by: Shri Alpesh Parmar, CIT-DR Date of Hearing 07.04.2026 Date of Pronouncement 22.04.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 13.02.2026 passed for A.Y. 2022-23.

2.

The assessee has raised the following grounds of appeal:

“1. The Lrd. Commissioner of Income Tax (E-Appeals) (for short “Appellate Authority”) has erred in law in passing the appeal order whereby he has confirmed order passed by the Income Tax Officer, NFAC (Assessment)- Delhi and dismissed the appeal on the grounds of limitation and not condone the delay of 185 days on the grounds of appellant had not shown, explained sufficient cause for not presenting the appeal within the due date and time limitation. The appellate authority has dismissed the appeal without giving proper opportunity of being heard to the appellant. Hence the same being against the principle of natural justice and law required to be quashed. The Lrd. Appellant Authority could have condone the delay as appellant was prevented by sufficient and reasonable cause and same was very well explained. The appellate authority has not condone the delay and their by the appellant is deprived of proper justice. Hence, order passed by the appellant authority deserves to be quashed and set a side and delay cause filing the first appeal may please be condone.

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 2–

2.

The Lrd. Appellant Authority has erred in law in dismissing the appeal of the appellant and confirmed the order of the assessing authority with regard to make additions of Rs. 10,97,13,147/-. The action of the appellant authority and the AO for passing the assessment order is not according to law to extent of making the addition. That on the facts and in the circumstances of the case and in law, the Lrd. Assessing Authority has erred in law in making the addition. 3. The opportunity to submit details in the case was not properly given and without giving a chance of personal hearing and to submit more details in support of the case, the order passed is in gross violation of principal of natural justice. 4. The Lrd. AO ought to have condone the delay by verifying the genuine and sufficient cause faced by the appellant for not filing the appeal within the prescribed time period. The dismissing of the appeal by not considering various factual and legal grounds raised by the appellant. Hence, the order passed is highly unjustifiable and unlawful. 5. The Lrd. Commissioner of Income Tax (E-Appeals) has erred in law in passing the appeal order confirming the action of Income Tax Officer, NFAC(Assessment)-Delhi, whereby confirmed the disallowing of Rs. 10,97,13,147/- u/s 37 of the Income Tax Act under consideration. The appellant has also explained the investment for the purchase property only through banking channel only. 6. The assessment order passed by the Assessing Officer is erroneous on the facts and in the law. On the facts and in the circumstances of the case the Lrd. Assessing Officer ought to have accepted the returned income. 7. The Lrd. Assessing Officer is not justified in disallowing Rs. 10,97,13,147/- u/s. 37 of the Income Tax Act. On the facts and in the circumstances of the case the Lrd. Assessing Officer has failed to appreciate the prevailing circumstances in the business in which the appellant is dealing. 8. The Lrd. Assessing Officer is not justified in not affording proper opportunity of being heard to the appellant and he has passed the assessment order which is in gross violation of principle of natural justice. 9. The Lrd. Assessing Officer has made following suppliers disallowing of purchase in the assessment order: PAN GST FIRM GST Purchase NAME Registration Value FWRPP3341H 24FWRPP3341H1Z7 Aaryan 09/06/2021 69,90,000/- Metal Trader India DPCPP4985R 24DPCPP4985R1ZX Ashok 07/07/2021 25,97,600/- Enterprise AANCM8645F 24AANCM8645F1Z0 Mahaan 12/10/2021 5,96,460/- Merchants Pvt. Ltd. AFQPV8331Q 24AFQPV8331Q1ZF Raza 22/11/2018 9,922/- Enterprise ABPFA6258G 24ABPFA62581Z9 Alif Empire 10/09/2019 9,95,19,165/-

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 3– 10. The Lrd. Assessing Officer has without verifying the books of account, documents and recorded transactions in the books of account and income offered for taxation made the addition in the assessment order and applied special rate of taxation @ 30 % of the Income Tax Act. 11. The Lrd. Assessing Officer has not appreciated and verified the audited books of account of the appellant and audit report uploaded by the appellant on the portal. Moreover, the documents and details submitted and uploaded by the appellant have also not been verified in its true and proper perspective. 12. The Lrd. Assessing Officer has charged interest u/s. 234B-C-D of the Income Tax Act on the consequential demand raised in the assessment order. 13. The Lrd. Assessing Officer has initiated penalty proceedings u/s. 272A(1)(d) of the Income Tax Act. 14. The appellant craves leave to add, alter or amend any of the grounds of appeal either before or at the time of hearing of the appeal.” 3. The brief facts of the case are that the assessee is a company engaged in trading activities and filed its return of income for A.Y. 2022– 23 declaring total income of ₹21,95,630/-. The return was processed under section 143(1) of the Act and subsequently selected for scrutiny under CASS primarily on two issues, namely lower disallowance under section 40(a)(i) of the Act vis-à-vis audit report and substantial purchases from suppliers who were non-filers or irregular filers of income tax returns.

4.

During the course of assessment proceedings, the Assessing Officer issued notices under sections 143(2) and 142(1) of the Act asking for information regarding purchases, TDS compliance, reconciliation with GST data, and supporting documentary evidence such as agreements, invoices, transportation details, and payment proofs. However, as recorded in the assessment order, the assessee failed to respond to most of the notices issued during the proceedings. The Assessing Officer observed that even attempts through speed post and electronic communication did not yield any response. The Assessing Officer conducted a field verification wherein it was found that the assessee was not available at the

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 4– registered address and had shifted premises, which further reinforced the Assessing Officer’s conclusion that the assessee was not cooperating in the proceedings.

5.

In view of persistent non-compliance, the Assessing Officer proceeded to complete the assessment under section 144 read with section 144B of the Act (best judgment assessment). The Assessing Officer issued a show cause notice proposing to disallow the purchases on the ground that the assessee had made purchases from entities who were either non- filers or whose GST registrations were cancelled/suspended, and also from a non-operational firm, namely M/s Alif Empire, from whom purchases of ₹9.95 crore were reported. The total purchases proposed to be treated as bogus amounted to ₹10,97,13,147/-.

6.

In response to the show cause notice, the assessee submitted that all purchases were genuine, were supported by GST invoices, duly reflected in GSTR-2A/2B, and payments were made through banking channels. The assessee further submitted that the goods purchased were subsequently sold and corresponding sales were duly recorded and taxed, thereby establishing the genuineness of transactions. The assessee also submitted that relevant documents could not be produced as they were seized by GST authorities during earlier search proceedings. Further, the assessee challenged the reliance on GST Department information and contended that no adverse findings had been finalized by GST authorities for the year under consideration.

7.

The Assessing Officer, however, rejected these submissions. The Assessing Officer held that the assessee failed to furnish primary evidences such as purchase agreements, transportation details, and

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 5– supporting documents to substantiate the genuineness of purchases. Mere reflection in GST returns or existence of GST registration was not insufficient, as per the Assessing Officer to establish genuineness of the transactions. The Assessing Officer also placed reliance on past information from GST and investigation wing which showed that the assessee had availed fake input tax credit in earlier years from non- operational entities, and the Assessing Officer observed that similar patterns also continued in the year under consideration. The explanation regarding seizure of documents was also not accepted by the Assessing Officer, as the assessee failed to produce any alternative evidence or obtain documents from GST authorities. Accordingly, the Assessing Officer held that the purchases were not genuine and he treated the entire amount of ₹10,97,13,147/- as bogus purchases, adding the same to the income of the assessee. The assessment was thus completed at ₹11,19,08,777/- and penalty proceedings were initiated.

8.

Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(Appeals). However, the appeal was filed with a delay of 185 days. The assessee sought condonation of delay on the ground that the delay occurred due to lapse on the part of the earlier consultant who failed to file the appeal despite being entrusted with the responsibility, and the assessee became aware of this only upon initiation of recovery proceedings.

9.

The CIT(Appeals) examined the condonation petition in detail and from a legal standpoint of limitation law. While acknowledging judicial precedents holing that a liberal approach may be adopted in condonation matters, the CIT(Appeals) held that the assessee failed to establish “sufficient cause” for delay. The CIT(Appeals) observed that the

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 6– explanation was vague and was not supported by any corroborative evidence such as affidavit or confirmation from the concerned consultant. The assessee also failed to demonstrate due diligence or bona fide conduct on part of the assessee. The CIT(Appeals) held that limitation provisions are based on public policy and cannot be relaxed merely on general or vague grounds. Relying on settled legal principles, the CIT(Appeals) held that absence of sufficient cause and presence of negligence disentitles the assessee from condonation relief.

10.

Accordingly, the CIT(Appeals) rejected the condonation of delay and held the appeal to be barred by limitation. As a consequence, the appeal was dismissed without adjudicating the issues on merits. The CIT(Appeals) further observed that even otherwise, the assessee had not furnished documentary evidence in support of its grounds during appellate proceedings. Therefore, the addition made by the Assessing Officer stood confirmed.

11.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

12.

We have carefully considered the facts of the case, the assessment order and the order of the CIT(Appeals. We observe that the CIT(Appeals) has dismissed the appeal of the assessee solely on the ground of delay in filing the appeal without adjudicating the issues on merits. At the same time, it is also evident that the delay of 185 days occurred on account of lapse on the part of the earlier consultant, as explained by the assessee, and an affidavit-cum-declaration has now been placed on record to substantiate the said contention.

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 7– 13. From the material placed before us, it is also seen that the assessment has been completed under section 144 r.w.s. 144B of the Act due to alleged non-compliance, and a high-pitched addition of ₹10,97,13,147/- has been made by treating the purchases as bogus. A scrutiny of assessment records shows that the assessment has been framed without a detailed verification of books of account and supporting evidences. The assessee has consistently contended that the purchases are duly recorded in the books of account, supported by GST invoices, routed through banking channels, and corresponding sales have been accepted, and that relevant documents could not be produced earlier as they were seized by GST authorities.

14.

In our considered view, the principles of natural justice require that the assessee be given a reasonable opportunity to present its case on merits, especially when substantial additions have been made and the appeal has been dismissed on a technical ground without adjudication on merits. It is a settled position of law that matters should be decided on merits rather than being dismissed on technicalities, particularly when the assessee demonstrates a plausible explanation for delay and expresses readiness to substantiate its claim with supporting evidences.

15.

At the same time, we also note that there was lack of proper compliance on the part of the assessee during the assessment proceedings as well as at the appellate stage, which has contributed to the present situation. Therefore, in order to balance the interests of justice, we deem it appropriate to set aside the entire matter to the file of the Assessing Officer for de novo adjudication.

ITA No. 670/Ahd/2026 Air Wind Green Energy Ltd. vs. ITO Asst.Year –2022-23 - 8– 16. Accordingly, the impugned order passed by the CIT(Appeals) is set aside and the matter is restored to the file of the Assessing Officer, who shall examine the issues afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee is also directed to fully cooperate in the proceedings and furnish all necessary documents and evidences, including books of account, purchase details, GST records transportation proof, and any other supporting material, to substantiate its claim.

17.

However, considering the non-compliance and delay attributable to the assessee at earlier stages, we direct the assessee to deposit a cost of ₹10,000/- with the Prime Minister’s Relief Fund before the Assessing Officer within a reasonable time, and furnish proof of such payment during the set-aside proceedings.

18.

With these directions, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 22/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

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

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