SPRAY ENGINEERING DEVICES LIMITED,CHANDIGARH vs. ITOACITDCIT-NFAC, NATIONAL FACELSEE ASSESSMENT CENTRE

ITA 885/CHANDI/2024Status: DisposedITAT Lucknow28 September 202610 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the delay of 99 days in filing the appeal was condoned as the assessee was prevented by sufficient cause. The Tribunal found that the CIT(A) had dismissed the assessee's appeal for non-prosecution without adjudicating the substantive grounds on merits. The Tribunal noted that the grounds raised by the assessee, including the validity of reassessment proceedings under section 147 and the merits of additions under sections 68 and 69C, involved examination of facts and documents. The Tribunal reasoned that the CIT(A) was required to dispose of the grounds in accordance with law and on the basis of material available, and the assessee's failure to appear did not dispense with the need for reasoned adjudication, especially concerning jurisdictional issues. Therefore, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(A) for fresh adjudication. The assessee was granted one effective opportunity to present its case. As a condition, the assessee was directed to plant 300 trees and submit a compliance report. The issues were restored to the CIT(A) for independent adjudication.

What were the facts?

The assessee, Spray Engineering Devices Ltd., filed an appeal against an order dated 14.03.2024 by the CIT(A), NFAC, Delhi, which dismissed its appeal against an assessment order dated 31.03.2022 passed under section 147 read with sections 144 and 144B of the Income-tax Act, 1961. The assessment year in question is 2013-14. The assessee had originally declared a loss of Rs.9,50,80,496/-. The reassessment proceedings were initiated based on information from the Investigation Wing regarding accommodation entries. The Assessing Officer treated Rs.3,50,00,000/- from the sale of shares as an unexplained cash credit under section 68 and Rs.8,75,000/- as unexplained expenditure under section 69C. The appeal before the CIT(A) was dismissed for non-prosecution.

What were the issues?

1. Whether the appeal filed by the assessee is barred by limitation, and if so, whether the delay should be condoned? The assessee argued that the delay of 99 days was due to unavoidable circumstances and not intentional. The Revenue did not seriously object. 2. Whether the reassessment proceedings initiated under section 147 are valid, considering the original assessment was under section 143(3) and the notice under section 148 was issued after four years from the end of the relevant assessment year, with all material particulars having been fully and truly disclosed? The assessee contended that the Assessing Officer lacked jurisdiction. 3. Whether the addition of Rs.3,50,00,000/- under section 68 as an unexplained cash credit and the consequential addition of Rs.8,75,000/- under section 69C as unexplained expenditure are justified on merits? The assessee argued that these additions were not examined on merits by the first appellate authority. 4. Whether the assessee is entitled to an adjustment of the addition under section 68 against brought-forward losses? The assessee argued this was not examined by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 143(3),Section 148,Section 68,Section 69C,Section 115BBE,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI VIJAY VARMA

For Appellant: Shri Aarush Aggarwal, CA &, Shri Vineet Aggarwal, CA
For Respondent: Smt. Geetinder Mann, CIT -DR
Hearing: 03.09.2026Pronounced: 28.09.2026

PER LALIET KUMAR, JM

This appeal by the assessee is directed against the order dated 14.03.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi ["ld. CIT(A)"], for Assessment Year 2013-14, whereby the appeal of the assessee against the assessment order dated 31.03.2022 passed under section 147 read with sections 144 and 144B of the Income-tax A.Y.2013-14 2 Act, 1961 ("the Act") was dismissed. The assessee is a company engaged in the business of manufacturing/engineering activities an

The order continues below.

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