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Facts
The assessee filed an appeal with a significant delay, citing a lack of communication with the previous Chartered Accountant. The assessee claimed commission expenses which the Assessing Officer (AO) disallowed on the grounds that the payees were related parties of the directors and that notices issued under section 133(4) were not replied to.
Held
The Tribunal condoned the delay in filing the appeal, stating that the assessee had sufficient cause. However, due to the assessee's non-compliance before the lower authorities, the matter was remanded back to the AO for de novo assessment, with a cost of Rs. 25,000 imposed on the assessee.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the matter should be remanded for de novo assessment due to non-compliance by the assessee.
Sections Cited
250, 115JB, 143(1), 143(2), 142(1), 133(4), 143(3), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
(Assessment Year: 2018-19) Srusti Realmart Limited Income Tax Officer, Ward Room No. 504, 5th Floor, Shree Sai 14(3)(1), Mumbai Ratan, Raigad Chowk, Ghatkopar Vs. (East), Mumbai – 400077. PAN/GIR No. AAUCS8969D (Appellant) : (Respondent) Assessee by : Mr. Gunjan Kakkad Respondent by : Shri Mahadevan A.M. Krishnan, Addl. CIT Date of Hearing : 04.08.2025 Date of Pronouncement : 29.08.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2018-19.
It is observed that the assessee has filed the present appeal with a delay of 633 days beyond the period of limitation for which the assessee is said to have filed an application along with an affidavit for condoning the said delay. On hearing rival contentions and on perusal of the affidavit along with an application for condonation of delay, where the reasons specified was that one of the director of the assessee company who was in (A.Y. 2018-19) Srusti Realmart Limited charge of the accounts department had some unresolved issue between the other director due to which there was lack of communication pertaining to the earlier Chartered Accountant or erstwhile Chartered Accountant who had failed to file the appeal on time. The ld. AR contended that that delay in filing the appeal was not want on or due to the negligence of the assessee but due to unavoidable circumstances. Upon perusal of the same, we deem it fit to condone the delay in filing the appeal beyond the period of limitation for the reason that the assessee had ‘sufficient cause’ for the said delay. Delay is hereby condoned.
The assessee has raised the following grounds of appeal:
1. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeal), National Faceless Appeal Centre, Income- tax Department [hereinafter for the sake of brevity referred to as "the CIT(A)"] has erred in upholding the assessment order dated 23December 2019.
2. On the facts and circumstances of the case and in law, the CIT(A) has erred in disallowing the claim of expenditure and added the said amount to the total income of the Appellant.”
4. Brief facts of the case are that the assessee company had filed its return of income declaring total income at Rs. 5,92,500/- under the normal provisions and Rs. 11,82,280/- u/s. 115JB on the book profit. The return was processed u/s. 143(1) of the Act. The assessee’s case was selected for scrutiny through CASS and notices u/s. 143(2) and 142(1) were duly issued and served upon the assessee. The learned Assessing Officer ('ld. A.O.' for short) observed that the assessee had claimed commission expenses paid to various parties aggregating to Rs. 1,23,18,458/- varying from 15% to 20% on sale of plot during the year under consideration, where the ld. AO observed that 7 parties to whom the assessee has majorly paid the commission are from the same (A.Y. 2018-19) Srusti Realmart Limited residential address as that of the directors of the assessee company. The assessee contended that these were related parties of the directors, where it is observed that the assessee had paid commission to third parties as well on the same transaction. The ld. AO issued notice u/s. 133(4) to these parties which was not replied by the said parties. The ld. AO made a disallowance/addition on the commission amounting to Rs. 1,19,75,916/- paid to related parties to the total income of the assessee, thereby determining total income at Rs. 1,25,68,417/- vide assessment order dated 07.06.2021 passed u/s. 143(3) r.w.s. 144B of the Act.
5. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 18.07.2023 upheld the addition made by the ld. AO vide an ex parte order, where the assessee is said to have not complied with the appellate proceeding.
6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee had ‘sufficient cause’ for its non-appearance before the lower authorities and prayed that the assessee may be given one more opportunity to present its case before the ld. AO.
The learned Departmental Representative ('ld. DR' for short) for the revenue vehemently opposed to setting aside the issue back to the lower authorities for the reason that the assessee has been non-compliant before the lower authorities inspite of various opportunities provided.
(A.Y. 2018-19) Srusti Realmart Limited 9. Upon considering the rival contentions, the assessee is said to have not complied before the lower authorities and has also failed to furnish all the relevant documentary evidence before the ld. AO as well as ld. CIT(A). In order to provide the assessee with one more opportunity, we deem it fit to remand this issue back to the file of ld. AO for de novo assessment. We also deem it fit to impose a cost of Rs. 25,000/- for recalcitrant attitude of the assessee in constantly not being compliant before the lower authorities and the same is to be paid to Prime Minister Relief Fund within 30 days from the receipt of this order and the proof of which has to be furnished to the ld. AO. Hence, we remand all these issues back to the file of ld. AO who is to decide the issue based on the documentary evidence proposed to be filed by the assessee in support of its claim and the assessee is also directed to strictly comply with the proceeding without any undue delay from its side. Needless it is to say that the sufficient opportunity of hearing is to be provided.