MART OVERSEAS PRIVATE LIMITED ,MUMBAI vs. ITO WARD 12(3)(1), MUMBAI

The appeal before us has been filed on 04.02.2026, even though the impugned order was communicated on 07.10.2024. There is a delay of 420 days. The assessee has also filed an affidavit seeking condonation of delay in filing the present appeal. In the affidavit, the assessee has stated that the delay occurred on account of circumstances beyond its control and has, inter alia, referred to the extensive inquiry conducted by the Serious Fraud Investigation Office in relation to M/s. Maxx Mobile Communications Pvt. Ltd., the consequent requirement of continuous appearances and submission of voluminous records, the fact that the registered e-mail ID on the Income-tax portal belonged to a former employee, the change in the registered office address, and the fact that the impugned order came to the knowledge of the assessee during the course of statutory audit conducted by its Chartered Accountant. It has further been stated that the business operations of the assessee-company had been closed since financial year 2014-15 and that the management resources and operational bandwidth were consequently constrained. The assessee has stated that the delay was neither intentional nor deliberate and has prayed that the same may be condoned and the appeal may be admitted for adjudication on merits.

Before proceeding further, we may briefly advert to the facts of the case as emerging from the assessment order. The assessee- company is engaged in the business of trading in mobile phones and accessories. The original assessment was completed and thereafter the assessment was reopened under section 147 of the Income-tax Act, 1961. The Assessing Officer received information regarding substantial cash deposits in various bank accounts of the assessee. The aggregate cash deposits were stated to be Rs. 14,69,88,000/-. During the reassessment proceedings, the assessee explained the deposits as arising out of cash sales. The Assessing Officer, however, was not satisfied with the explanation furnished by the assessee. The assessment order records, inter alia, that the assessee had not produced the original cash book and audited stock register and that the supporting material furnished was not sufficient to verify the day-to-day cash sales, purchases and movement of stock. The Assessing Officer also noted discrepancies and deficiencies in the material produced and ultimately concluded that the assessee had failed to establish the genuineness of the cash sales and the source of the cash deposits. Consequently, an amount of Rs. 14,69,88,000/- was treated as unexplained cash credit under section 68 of the Act and added to the income of the assessee. The total assessed income was accordingly determined at Rs. 14,88,18,150/-.

The assessee carried the matter in appeal before the learned CIT(A)/NFAC. The appellate order records that the assessee had challenged, inter alia, the validity of the reopening under section 147 and the addition of Rs. 14,69,88,000/- under section 68. The learned CIT(A)/NFAC considered the submissions of the assessee and the assessment record. The challenge to the reopening was rejected and Ground No. 1 was dismissed. In respect of the addition under section 68, the learned CIT(A)/NFAC considered the assessee's explanation that the deposits represented cash sales, but ultimately did not accept the explanation and dismissed Ground No. 2. The appeal of the assessee was accordingly dismissed.

Coming to the present proceedings, it is seen that the appeal was instituted on 24.02.2026 against the order dated 07.10.2024. The assessee has sought condonation of the delay by filing an affidavit. We have considered the reasons stated in the affidavit. However, while the affidavit sets out certain circumstances which, according to the assessee, prevented it from becoming aware of and acting upon the impugned order within time, the subsequent conduct of the assessee before this Tribunal is also required to be taken into consideration. The matter was first posted for hearing on 23.04.2026, on which date none appeared on behalf of the assessee. The matter was thereafter posted on 08.06.2026. On that date also none appeared on behalf of the assessee; however, a letter dated 04.06.2026 was filed by the learned representative seeking adjournment. Accordingly, the matter was adjourned to 10.06.2026.

On 10.06.2026, Shri Raman Bhuraria, learned representative for the assessee, appeared virtually and requested further time. The request was acceded to and the matter was adjourned to 03.08.2026. On 03.08.2026, the Bench did not function and, accordingly, the hearing was adjourned to 05.08.2026, and the parties were informed through the notice board. On 05.08.2026, Shri Raman Bhuraria again appeared virtually and sought time to file a fresh affidavit in support of the application for condonation of delay. The matter was accordingly adjourned to 18.08.2026. On 18.08.2026, the learned counsel for the assessee again appeared virtually and sought further time for filing documentary evidence in support of the application for condonation of delay. The matter was consequently adjourned to 19.08.2026. On 19.08.2026, none appeared on behalf of the assessee and the matter was adjourned to 21.09.2026. On 21.09.2026 also, none appeared on behalf of the assessee and the matter was again adjourned to 29.09.2026. On 29.09.2026, when the matter was finally taken up, none appeared on behalf of the assessee and no further explanation or documentary material in support of the application for condonation of delay was filed.

Thus, the record shows that the assessee was afforded several opportunities to pursue the appeal and, more particularly, to substantiate the reasons stated for the delay in filing the appeal. On two occasions the learned representative appeared virtually and specifically sought time for filing further material in support of the condonation application. Despite such opportunities, the assessee has neither appeared on the subsequent dates nor placed before us the documentary evidence which was stated to be necessary in support of its explanation. The affidavit by itself sets out the circumstances relied upon by the assessee, but the subsequent conduct of the assessee in not appearing and in not furnishing the material for which time had been sought has to be considered while examining whether the assessee is pursuing the present appellate proceedings with due diligence.

We also find that, apart from the question of delay, no material has been placed before us to enable us to effectively adjudicate the substantive grounds raised by the assessee against the addition made under section 68. The assessment order contains a substantial addition of Rs. 14,69,88,000/- on account of alleged unexplained cash credits arising from cash deposits claimed by the assessee to represent cash sales. The Assessing Officer had recorded various reasons for not accepting the explanation of the assessee, including the non-production of original books and records and the inability to verify the cash sales and corresponding stock movement. The learned CIT(A)/NFAC thereafter considered the challenge to the addition and dismissed the relevant ground. In the present proceedings, however, despite repeated opportunities, neither the assessee nor its authorised representative has appeared to address the matter or place before us the necessary material in support of the grounds raised in the appeal.

In the aforesaid facts and circumstances, particularly having regard to the repeated opportunities granted to the assessee, the repeated requests for adjournment, the specific opportunity granted for filing a fresh affidavit and thereafter documentary evidence in support of the application for condonation of delay, and the continued absence of the assessee on the subsequent dates of hearing, we are unable to effectively proceed with the adjudication of the appeal. The assessee has not placed before us any further explanation or material to substantiate the condonation petition and has also not placed any material before us in support of its challenge to the addition made under section 68 of the Act. In these circumstances, we are of the view that the appeal cannot be kept pending indefinitely in the absence of any effective participation on behalf of the assessee. The appeal is, accordingly, dismissed for non-prosecution.

Before parting, we clarify that the present dismissal is on account of non-prosecution and non-pursuit of the appeal before the Tribunal. In case the assessee seeks restoration of the appeal, it shall be open to the assessee to move an appropriate application for restoration in accordance with law and demonstrate sufficient cause for its non- appearance and failure to prosecute the appeal on the dates fixed for hearing, whereupon such application shall be considered in accordance with law.

In the result, the appeal of the assessee is dismissed for non- prosecution.