ERS SERVICES PRIVATE LIMITED,DELHI vs. DCIT CIRCLE 7(1), DELHI

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ITA 7483/DEL/2026Status: DisposedITAT Delhi23 September 2026AY 2021-225 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had dismissed the assessee's appeal in limine due to a 23-day delay in filing, which was not condoned. The reason for the delay was stated to be a lack of communication between the assessee and its counsel, and an issue with uploading particulars of one party due to inadequate space on the portal. The assessee had requested the matter be restored to the file of the AO. Considering these facts and in the interest of justice, the Tribunal set aside the impugned orders of the CIT(A) and the AO. The matter was restored to the file of the AO for a fresh decision in accordance with the law, after affording a fair opportunity of hearing to the assessee. The Tribunal allowed the appeal for statistical purposes. No specific findings were made on the merits of the additions or grounds raised by the assessee, as the matter was remitted back to the AO.

What were the facts?

ERS Services Private Limited (the assessee) filed an appeal against the order dated 19.06.2026 of the CIT(A)/NFAC, Delhi, which upheld the assessment order dated 19.12.2022 passed by the AO/NFAC, Delhi, under section 144 r.w.s. 144B of the Income Tax Act, 1961, for Assessment Year 2021-22. The assessee, engaged in cheque clearing pickup services, declared a total income of Rs. 6,46,790/-. The case was selected for scrutiny regarding large payments under section 194C to non-filers. The AO made additions of Rs. 59,55,438/- under section 69C and Rs. 6,18,070/- under section 36(1)(va). The assessee's appeal before the CIT(A) was dismissed in limine due to a 23-day delay in filing, which was not condoned.

What were the issues?

1. Whether the CIT(A) erred in upholding the assessment order passed by the AO under Section 144 r.w.s. 144B of the Income Tax Act, 1961, as bad in law. 2. Whether the CIT(A) erred in sustaining additions made without independent enquiry, based solely on alleged non-compliance with a notice under section 133(6). 3. Whether the CIT(A) erred in sustaining additions based on assumptions and presumptions, without material evidence of non-genuine expenditure. 4. Whether the CIT(A) erred in passing the appellate order without affording the assessee a proper opportunity of being heard, violating principles of natural justice. 5. Whether the CIT(A) erred in sustaining the addition of Rs. 59,55,438/- when the AO did not invoke section 145 or reject books of account before disallowing expenditure. 6. Whether the CIT(A) erred in sustaining the addition of Rs. 59,55,438/- under section 69C by treating contract expenditure to M/s Balaji Trading Company as unexplained. 7. Whether the CIT(A) erred in confirming the disallowance of Rs. 6,18,070/- under section 36(1)(va). 8. Whether the AO erred in making an addition of Rs. 59,55,438/- and subjecting it to tax under Section 115BBE. 9. Whether the AO erred in initiating penalty proceedings under Sections 272A(1)(d), 271AAC(1), and 270A. 10. Whether the AO erred in levying interest under Sections 234A and 234B. Assessee's Contentions: The assessee argued that the CIT(A) erred in dismissing the appeal in limine due to a 23-day delay, attributing it to communication issues between the assessee and its Delhi-based counsel. The assessee also stated that the AO made additions regarding one party whose particulars could not be uploaded due to portal space limitations, and requested the matter be restored to the AO. The assessee also raised grounds challenging the AO's assessment order, the CIT(A)'s sustaining of additions without independent enquiry or material evidence, violation of natural justice, and incorrect application of sections 145, 69C, 115BBE, and penalty/interest provisions. Revenue's Contentions: The Departmental Representative relied on the impugned orders.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 133(6),Section 145,Section 69C,Section 36(1)(va),Section 115BBE,Section 272A(1)(d),Section 271AAC(1),Section 270A,Section 234A,Section 234B,Section 194C,Section 143(2),Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI

Before: SHRI VIMAL KUMAR & SHRI SANJAY AWASTHI

For Appellant: Ms. Agni Choudhary, Adv
For Respondent: Shri Tarun Sharda, Sr. DR
Hearing: 23.09.2026Pronounced: 23.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 7483/Del/2026, A.Y. 2021-22 ERS Services Private Limited Vs. DCIT, 3530, Neta Ji Subhash Marg, Circle 7(1), New Delhi Delhi �थायीलेखासं./जीआइआरसं./PAN/GIR No: AABCE6025D Appellant .. Respondent Appellant by : Ms. Agni Choudhary, Adv. Respondent by : Shri Tarun Sharda, Sr. DR Date of Hearing 23.09.2026 Date of Pronouncement 23.09.2026

O R D E R PER VIMAL KUMAR, JM: The appeal filed by the Appellant/assessee is against order dated 19.06.2026 of ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of assessment order dated 19.12.2022 of Ld. Assessing Officer/ NFAC, Delhi (hereinafter referred to as ‘the AO’) u/s 144 r.w.s. 144B of the Act for A.Y. 2021-22.

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2.

Brief facts of the case are that the assessee company is in business of providing Cheque Clearing Pickup services from the Branch to the Regional processing Centre of the Respective Bank. The assessee filed its return of income on 14.03.2022 declaring total income of Rs. 6,46,790/-. The case was selected for complete scrutiny under CASS to examine issue of ‘Large payments made under section 194 C to persons who have not filed return of income’. Notice u/s 143(2) of the Act dated 28.06.2022. Notices u/s 142(1) of the Act dated 25.07.2022, 10.08.2022, 06.10.2022, 27.10.2022, 17.11.2022 were issued. Show cause notice dated 30.11.2022, additional show cause notice dated 07.11.2022, letter dated 14.12.2022 were issued. The assessee made part compliance. On completion of proceedings, Ld. AO vide order dated 19.12.2022 made additions of Rs. 59,55,438/- u/s 69C of the Act and Rs. 6,18,070/- for section 36(1)(va) of the act.

3.

Against order dated 19.12.2022 of ld. AO, the assessee filed appeal before Ld. CIT(A) which was dismissed in limine as delay of 23 days in filing appeal, was not condoned.

4.

Being aggrieved, the appellant/assessee preferred present appeal on following grounds:

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“1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred, in upholding the order passed by the learned AO under Section 144 r.w.s144B of the Income-tax Act, 1961 is bad in law. 2. That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in sustaining the addition made without conducting any independent enquiry, merely on the basis of the alleged non-compliance with the notice issued under section 133(6). 3. That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in sustaining the addition based merely on assumptions and presumptions, without any material evidence establishing that the expenditure claimed by the assessee was non-genuine. 4. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in passing the impugned appellate order without affording the Appellant a proper and effective opportunity of being heard, thereby violating the principles of natural justice. 5. That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in sustaining the addition of Rs.59,55,438/- despite the fact that the learned Assessing Officer neither invoked the provisions of section 145 nor rejected the books of account before disallowing the expenditure, and therefore the addition is contrary to law and liable to be deleted. 6. That, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in sustaining the addition of Rs.59,55,438/- made under section 69C of the Act by treating the contract expenditure incurred in favour of M/s Balaji Trading Company as unexplained expenditure. 7. That, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the disallowance of Rs.6,18,070/- under section 36(1) (va) of the Act. 8. That the Ld. Assessing Officer has erred both on facts and in law by making an addition of Rs.59,55,438/- and subjecting it to tax under the provisions of Section 115BBE of the Income Tax Act. 9. That the Ld. AO has erred both in law and on facts in initiating penalty proceedings under Sections 272A(1)(d), 271AAC(1) and 270A of the Income Tax Act 1961. 10. That the Ld. AO has erred both in law and on facts in levying interest under Sections 234A and 234B of the Income Tax Act 1961.

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11.

That the impugned assessment order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 12. That the appellant leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”

5.

Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) erred in dismissing appeal in limine by not condoning delay of 23 days in filing appeal. The delay was due to lack of communication between the assessee and his counsel residing in Delhi. Ld. AO had made addition regarding one party whose particulars could not be uploaded due to scarcity of space in the Portal. So, the matter may be restored to the file of ld. AO.

6.

Ld. Departmental Representative relied on impugned orders.

7.

From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide order dated 19.06.2026 dismissed application for condonation of delay of 23 days in filing appeal because lack of communication between the assessee and his counsel. Ld. AO had made addition regarding one party whose particulars could not be submitted due to inadequate space. Prayer for restoration of matter to the file of ld. AO has been made.

8.

In view of above material facts and in interest of justice, impugned orders dated 19.06.2026 of Ld. CIT(A) and 19.12.2022 of Ld. AO are set aside and the

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matter is restored to the file of Ld. AO for afresh decision in accordance with law after affording fair opportunity of hearing to the appellant/assessee.

9.

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

Order pronounced in the open court on 23.09.2026.

Sd/- Sd/- (SANJAY AWASTHI) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 24.09.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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