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Facts
The assessee, Edweena Real Estate Pvt Ltd, filed appeals against orders passed under Section 250 of the Income Tax Act for AYs 2017-18 and 2018-19. The appeals were delayed by 351 days, with the assessee seeking condonation of delay, explaining that the company was undergoing Corporate Insolvency Resolution Process (CIRP) and the Resolution Professional faced difficulties in obtaining necessary details from the erstwhile management.
Held
The Tribunal condoned the delay in filing the appeals, emphasizing the principle of advancing substantial justice. It restored the matter to the file of the Ld. CIT(A) for fresh adjudication, providing the assessee one more opportunity to present its case, and imposed a nominal cost of Rs. 2,000/- for non-cooperation during prior proceedings. Both appeals were allowed for statistical purposes.
Key Issues
Whether delay in filing appeals should be condoned due to company's CIRP status and if the matter should be remanded to CIT(A) for fresh adjudication.
Sections Cited
250, 253, 68, 7 (IBC), 22(3)(b) (IBC)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SHRI OM PRAKASH KANT
Date of Hearing 23.06.2025 Date of Pronouncement 04.08.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
1. The present two appeals have been filed by the assessee challenging the impugned order dt. 26.02.2025 & 22.02.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment years 2017-18 & 2018-19
2. Since all the issues involved in these two appeals are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. We shall take Real Estate Pvt Ltd., Mumbai 2632/Mum/2025, A.Y 2018-19 as lead case and facts narrated therein.
ITA No. 2632/Mum/2025, A.Y 2018-19
At the outset, we noticed that the present appeal filed by the assessee is time barred by 351 days and in this regard an application for seeking condonation of delay has been filed by the assessee, wherein it has been mentioned as under:
“We, Incorp Restructuring Services LLP, through our Authorized Representative, Mr. Vithal RV Dahake, in our capacity as the Resolution Professional of Edweena Real Estate Private Jmited, having our registered office at 405-407, Hind Rajasthan Building, Dadar, Maharashtra - 400014, hereby solemnly affirm and state as follows:
That, Edweena Real Estate Private Limited is undergoing Corporate Insolvency Resolution Process (CIRP) on account of an application filed by M/s. Piramal Capital & Housing Finance Limited under section 7 vide CP (IB) No 988/MB/2023 of Insolvency and Bankruptcy Code, 2016.
That, M/s. Piramal Capital & Housing Finance Limited filed petition against Edweena Real Estate Private Limited on 01st September 2023. 3. That, Hon. National Company Law Tribunal (NCLT) vide order dated 22nd January 2024, admitted the petition of Piramal Capital & Housing Finance Limited thereby admitting M/s Edweena Real Estate Private Limited under CIRP w.e.f. that date. Edweena Real Estate Pvt Ltd., Mumbai
That vide email dated February 29, 2024, it was intimated by Omkara ARC that an assignment agreement dated February 13, 2024 has been executed between Omkara ARC and PCHFL for assignment of the debt of Applicant to Omkara ARC. Pursuant to the assignment of debt from Piramal to Omkara ARC, the Resolution Professional placed the same on record by filing IA 1287/MB/2024, which was allowed on March 26, 2024.
5. That, Thereafter the members of COC passed a resolution in its 1st Meeting held on March 11, 2024 for appointment of Incorp Restructuring Services LLP as Resolution Professional in replacement of Mr. Jayesh Sanghrajka, IRP under Section 22 (3)
(b) of the Code. The said appointment was confirmed by the Hon'ble NCLT vide order dated July 03, 2024. The said order was received on September 18, 2024. 6. That, the undersigned was unable to trace the Suspended Directors of the Assessee Company and had lot of challenges in gathering the Basic details.
That, when one of the orders in case of M/s. Sigtia Constructions Private Limited (Group Company) were received, the orders passed in all group entities were verified by the undersigned.
That, return for the AY 2017-18 was filed by the Erstwhile Management on 30th November 2017, declaring taxable income as Nil and current year business loss of Rs.3,134.
That, the assessment order for AY 2017-18 in case of Edweena Real Estate Private Limited was passed wherein addition has been made on account of unexplained cash credits under section 68 amounting to Rs. 46,53,24,511 /- and disallowance has been made of interest payable taken under WIP amounting to Rs. 52,67,64,734/-.
10. That appeal was preferred against the said assessment order by the Erstwhile Management on 17th January 2020. Edweena Real Estate Pvt Ltd., Mumbai
11. That various notices were issued to the assesee company by Commissioner of Income Tax Appeals and that the same remained non-complied by the erstwhile management.
12. That order under section 250 of the Income Tax Act has been passed on 26th February 2024.
That, no appeal was preferred against the said order by the Esrtwhile Management.
That, the time limit to file an appeal under section 253 against the Order of Commissioner of Income tax Appeals has lapsed on 26th April 2024 and there is delay of 35.6 days.
That, a prayer is hereby made to condone the above delay for filing of appeal in the above matter.
That, the delay in filing of appeal was on account the fact that company undergoing CIRP and neither the details of Appeals were available nor they were No. 3540 filed by Erstwhile Management.
That, I have no intention to not comply with the statutory notices and jeopardizeF the interest of the revenue by delaying the filing of appeal.
We, Incorp Restructuring Services LLP, through our Authorized Representative, Mr. Vithal Dahake, do hereby verify on oath that the contents of the affidavit above are true to my personal knowledge and believe the same to be true.
On the other hand Ld. DR refuted the contents contained in the application and requested for dismissal of the same as there are no ‘sufficient cause’ for not filing the appeal within the time. Edweena Real Estate Pvt Ltd., Mumbai
After having heard the counsel for both the parties on this application for seeking condonation of delay and considering the entire factual position as explained before us and also keeping in view the principles laid down by Hon'ble Supreme Court in the case of Land Acquisition Collector Vs MST Katiji and others 1987 AIR 1353 Supreme Court, wherein it has been held that were substantial justice is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which occurred in filing the appeal and construing the expression "sufficient cause" liberally we are inclined to condone the delay in filing the appeal before us. Therefore I condone the delay and admit the appeal to be heard on merits.
7. We further noticed that assessee was ex-parte before Ld. CIT(A) and it has been mentioned that the assessee company was admitted into corporate insolvency petition vide order of Hon’ble NCLT and because of this the assessee could not appear and cooperate before Ld. CIT(A) in the appellate proceedings. However, Ld. Ld.DR contested the said plea raised by the assessee and Edweena Real Estate Pvt Ltd., Mumbai submitted that assessee had not appeared before Ld. CIT(A) intentionally.
8. Be that as it may, without going into the merits of the issues raised by the assessee and taking into consideration the facts narrated before us and while taking a lenient view that, we find that there was reasonable cause, because of which assessee could not put effective representation before Ld. CIT(A). Hence the Bench is of the view that one more opportunity be given to the assessee to represent his case before Ld. CIT(A). Therefore considering the overall circumstances of the present case, we deem it proper to restore the matter back to the file of Ld. CIT(A) for deciding the appeal afresh by providing one more opportunity to the assessee. Since there was none-cooperation on behalf of the assessee during the proceedings before the revenue authorities therefore a nominal cost of Rs. 2,000/- is imposed upon the assessee for delaying the proceedings which shall be deposited in the Prime Minister Relief Fund and a copy of the receipt shall be placed on file before CIT(A) within 30 days from the date of receipt of this order. The assessee shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings. Edweena Real Estate Pvt Ltd., Mumbai
9. Before parting, we make it clear that our decision to restore the matter back to the file of the Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
As the facts and circumstances in these appeals are identical to for the A.Y 2017-18 (except variance in figures) and the decision rendered in above paragraph would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the present appeal also stands allowed for statistical purposes.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.