TRANSCORP INTERNATIONAL LIMITED,JAIPUR vs. DCIT CIRCLE-1, JAIPUR

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ITA 1194/JPR/2025Status: DisposedITAT Indore30 October 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) made contradictory findings by first condoning the delay of 25 days in filing the appeal and then, in the concluding part of the same order, declining to condone the delay. This "hot and cold" approach is legally unsustainable. Furthermore, the Ld. CIT(A) reproduced the assessee's written submissions but did not adjudicate on the merits of the case. Consequently, the order passed by the Ld. CIT(A) was set aside. The Tribunal directed the Ld. CIT(A) to provide the assessee with a proper opportunity of hearing and then pass a fresh order on the merits of the case. The Tribunal explicitly stated that it was not expressing any opinion on the merits of the case and left it open for the Ld. CIT(A) to adjudicate in accordance with the law. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Transcorp International Limited, engaged in foreign exchange and money remittance, filed its return for AY 2017-18 on 30.10.2017. The Assessing Officer (AO) made disallowances for repair and maintenance expenses (Rs. 5 lakhs), under Section 14A (Rs. 32,51,200), and another disallowance (Rs. 58,577), leading to a tax demand. The assessee appealed to the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, but filed it with a delay of 25 days. The NFAC initially condoned the delay in one part of its order but later dismissed the appeal as time-barred, refusing to condone the delay. The assessee's appeal to the ITAT challenges this dismissal and the subsequent disallowances made by the AO.

What were the issues?

1. Whether the NFAC erred in dismissing the assessee's appeal as time-barred, despite having initially condoned the delay, rendering the order contradictory and void? 2. Whether the NFAC erred in dismissing the appeal without adjudicating the grounds on merits, violating Section 250(6) and principles of natural justice? 3. Whether the NFAC erred in confirming the AO's disallowance of Rs. 5,00,000 in repair and maintenance expenses? 4. Whether the NFAC erred in confirming the AO's disallowance of Rs. 32,51,200 under Section 14A read with Rule 8D without mandatory satisfaction and despite no exempt income? 5. Whether the NFAC erred in confirming the AO's disallowance of Rs. 58,577 by wrongly treating it as a penalty instead of a compensatory expenditure allowable under Section 37(1)? 6. Whether the NFAC erred in confirming the denial of credit for Rs. 8,28,202 representing Dividend Distribution Tax paid? Assessee's contentions: The NFAC's order is contradictory and bad in law for condoning the delay and then dismissing the appeal. The dismissal without adjudicating on merits violates natural justice and Section 250(6). The additions made by the AO and confirmed by the NFAC are illegal and arbitrary. The assessee relied on the paper book and argued that the AO's additions are liable for deletion. The Ld. Counsel requested the appeal be allowed as the NFAC dismissed it only on the point of delay. Revenue's contentions: The Ld. DR supported the orders passed by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 14A,Section 37(1),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B”, BENCH, JAIPUR

Before: Shri T. R. Senthil Kumar & Shri Prakash

For Appellant: Shri Rohan Sogani, CA
For Respondent: Ms. Namita Patel, JCIT

IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH, JAIPUR Before: Shri T. R. Senthil Kumar, Judicial Member & Shri Prakash, Accountant Member

ITA No. 1194/JPR/2025 Assessment Year : 2017-18 Transcorp International DCIT Circle-1 Limited C. R. Building, Jaipur, 7, Transcorp Tower, 5th Rajasthan. Floor, Moti Dongari Road, Manwa Ji ka Bagh, Jaipur (Appellant) (Respondent) PAN No.: AAACT6622Q

Assessee Represented by : Shri Rohan Sogani, CA Revenue Represented by : Ms. Namita Patel, JCIT

Date of hearing : 03-08-2026 Date of pronouncement : 30-10-2026

O R D E R Per T.R. Senthil Kumar, Judicial Member: This appeal is filed by the assessee as against the order dated 07.08.2025 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), refusing to condone the delay of 25 days in filing the appeal. 2. Brief facts of the case are that the assessee is a company engaged in the business of foreign exchange and inward money remittance. For the Assessment Year 2017-18, assessee filed its return of income on 30.10.2017 declaring total income of Rs. 2,71,45,940/-. The case was

P a g e | 2 ITA No.1194/JPR/2025 Transcorp International Limited selected for scrutiny assessment and thereafter the assessment was completed by making disallowance of repair and maintenance expenses of Rs. 5 lakhs, disallowance u/s. 14A of Rs. 32,51,200/- and disallowance of Rs. 58,577/- and demanded tax thereon.

3.

Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A) with delay of 25 days and also filed the detailed reasons for the delay. The Ld. CIT(A) has reproduced the reasons for the delay at page no. 3 to 5 of his order and in para 1.3.3. condoned the delay by observing as follows:-

“1.3.3. I have considered the submissions of the assessee on the issue of condonation of delay. I find force in the submissions made by the assessee and the evidence furnished in support of the contention. Accordingly, the delay is condoned.” 3.1. It is thereafter Ld. CIT(A) has reproduced the written submission filed by the assessee and again at page no. 16 in his findings at para 4.1 discussing various case laws, observed that although the delay in this case is 25 days, but it was incumbent upon the assessee to explain the delay for each day alongwith credible proof and therefore declined to condone the delay and dismissed the appeal of the assessee.

4.

Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:-

“1. In the facts and circumstances of the case and in law, the National Faceless Appeal Centre (NFAC) has grossly erred in dismissing the appeal of the assessee company by holding it as time-barred, despite having categorically condoned the delay in para 1.3.3 of the order. The contradictory findings render the order bad in law and void ab initio. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC.

2.

In the facts and circumstances of the case and in law, the NFAC has grossly erred in dismissing the appeal of the assessee company without adjudicating

P a g e | 3 ITA No.1194/JPR/2025 Transcorp International Limited the grounds on merits, contrary to the mandate of section 250(6) of the Act and in violation of principles of natural justice. This fundamental error committed by the NFAC vitiates the appellate order. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC.

3.

In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in disallowing a lump sum addition of Rs. 5,00,000 out of Repair & Maintenance expenses without assigning cogent reasons and ignoring the details and evidences furnished by the assessee company. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.

4.

In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in making disallowance of Rs. 32,51,200 u/s 14A read with Rule 8D, without recording mandatory satisfaction under section 14A(2) and despite the fact that no exempt income was earned during the year. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.

5.

In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in disallowing Rs. 58,577 by wrongly treating the same as penalty in nature, ignoring that the expenditure was compensatory and allowable u/s 37(1). The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.

6.

In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in denying credit of Rs. 8,28,202 being Dividend Distribution Tax duly paid by the assessee company, resulting in unlawful demand and double taxation. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.

7.

The assessee company craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.” 5. Ld. Counsel appearing for the assessee submitted before us a Paper Book containing 88 pages as well as on merits of the case, canvassing that the addition made by the AO is liable to be deleted. The Ld. CIT(A)

P a g e | 4 ITA No.1194/JPR/2025 Transcorp International Limited dismissed the appeal only on the point of delay, therefore requested to allow the appeal of the assessee.

6.

Per contra, Ld. DR appearing for the Revenue supported the orders passed by the lower authorities.

7.

We have given our thoughtful consideration and perused the materials available on record including the paper book filed by the assessee. On perusal of the order of Ld. CIT(A) at page no. 5, he clearly mentioned that he considered the submission of the assessee on the issue of condonation of delay and again condoned the delay, but in concluding part of his order, he declined to condone the delay of 25 days in filing the appeal. Thus, Ld. CIT(A) had made hot and cold in the same order which is legally not sustainable. Further, Ld. CIT(A) has reproduced the written submission of the assessee, but not adjudicated on the merits of the case. Thus, the order passed by Ld. CIT(A) is liable to be set aside with a direction to give proper opportunity of hearing to the assessee and then pass fresh order on merits of the case. Thus we are not expressing any opinion on merits of the case and leave it open to the Ld. CIT(A) to adjudicate in accordance with the provisions of law.

In the result, the appeal filed by the assessee is hereby allowed for 8. statistical purposes. Order is pronounced in the open Court on 30-10-2026

Sd/- Sd/- (Prakash) (T. R. Senthil Kumar) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 30.10.2026 Dhananjay K., Sr. PS

P a g e | 5 ITA No.1194/JPR/2025 Transcorp International Limited

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