RATNARAVI METAL IMPEX,MUMBAI vs. INCOME TAX OFIICER 19(3)(1), MUMBAI

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ITA 268/MUM/2025Status: DisposedITAT Mumbai30 April 2025AY 2017-20184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that, considering the contents of the assessee's affidavit, in the interest of justice, the learned CIT(A) ought to have condoned the delay and decided the appeal on merits. Therefore, the Tribunal restored the appeal to the file of the learned CIT(A) with a direction to decide the appeal on merits after affording a reasonable and adequate opportunity of being heard to the assessee. The Tribunal did not decide on the merits of issues 2 through 8, as the primary issue was the condonation of delay and the subsequent decision on merits by the CIT(A). The ratio decidendi is that procedural fairness requires condonation of delay when there are sufficient reasons and the interest of justice demands it, allowing for a decision on the merits of the case. The operative direction is to remand the matter to the CIT(A).

What were the facts?

The assessee, Ratnaravi Metal Impex, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order dated 21/11/2024 passed by the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)). The assessment year in question is 2017-18. The assessee's appeal to the CIT(A) was dismissed as time-barred. The assessee contended that the assessment order under Section 144 was passed on 26.11.2019 without proper notice, as notices were sent to an email address that had been closed since 2015. The assessee also claimed to have learned about the assessment order only in October 2022 and faced difficulties in appointing a consultant to file the appeal before the CIT(A), leading to a delay. The appeal before the CIT(A) was eventually filed on 25.05.2023.

What were the issues?

1. Whether the learned CIT(A) erred in passing the order without considering the reasons and circumstances for condonation of delay in filing the appeal by the appellant (Question of law and fact, concerning procedural fairness and condonation of delay). 2. Whether the learned AO erred in passing the order of Assessment u/s 144 (Question of law and fact, concerning the validity of assessment proceedings). 3. Whether the learned Officer erred in adding Rs.1,54,64,948/- to the total income of appellant on account of "Unexplained Money" u/s 69A (Question of law and fact, concerning the addition of unexplained money). 4. Whether the learned AO erred in initiating penalty proceedings u/s 271F (Question of law and fact, concerning penalty initiation). 5. Whether the learned AO erred in initiating penalty proceedings u/s 272A(1)(d) (Question of law and fact, concerning penalty initiation). 6. Whether the learned AO erred in initiating penalty proceedings u/s 271AAC(1) (Question of law and fact, concerning penalty initiation). 7. Whether the learned AO erred in levying interest u/s 234A (Question of law and fact, concerning interest levy). 8. Whether the learned AO erred in levying interest u/s 234B (Question of law and fact, concerning interest levy). Assessee's contentions: The assessee argued that the assessment order was passed without proper notice, as notices were sent to an invalid email address. The delay in filing the appeal before the CIT(A) was unintentional, caused by financial crisis, legal cases, non-receipt of assessment order, change of consultant, and the need to reconstruct books of accounts. The assessee also stated that the communication window with the CIT(A) was enabled late, and the delay should be condoned. The assessee also claimed that no transactions involving unexplained money were undertaken. The assessee relied on the affidavit of its partner. Revenue's contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 271F,Section 272A(1)(d),Section 271AAC(1),Section 234A,Section 234B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE

For Appellant: Shri Dharan Gandhi, A/R
For Respondent: Shri Ashok Kumar Ambastha, Sr. D/R
Hearing: 28/04/2025Pronounced: 30/04/2025

PER NARENDRA KUMAR BILLATYA, AM:

This appeal by the assessee is preferred against the order

dated 21/11/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2017-18. 2. Grievance of the assessee reads as under:-

“1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (CIT) Appeal passed order without considering the reason and circumstances of condonation of delay for the appellant in filing appeal.

2.

On the facts and circumstances of the case and in law, the learned AO had erred in passing order of Assessment u/s 144. 3. On the facts and circumstances of the case and in law, the Learned officer erred in adding Rs.1,54,64,948/- to the total income of appellant on account of "Unexplained Money" u/s 69A.

4, On the facts and circumstances of the case and in law, the learned AO has erred in initiating penalty proceeding u/s 271F of Income Tax Act, 1961. 5. On the facts and circumstances of the case and in law, the learned AO has erred in initiating penalty proceeding u/s 272A (1) (d) of Income Tax Act, 1961. 3. anerasy ance fre5201 INCOMETAX APPELLATE TRIBUNAL

6.

On the facts and circumstances of the case and in law, the learned AO has erred in initiating penalty proceeding u/s 271AAC(1) of Income Tax Act, 1961. 7. On the facts and circumstances of the case and in law, the learned AO has erred in leaving interest u/s 234A of Income Tax Act,1961. 8. On the facts and circumstances of the case and in law, the learned AO has erred in leaving interest u/s 234B of Income Tax Act, 1961.”

At the very outset, the ld. Counsel for the assessee drew our

attention to the affidavit of Sureshkumar Sanghvi, partner of Ratnaravi

Metal Impex. The relevant part reads as under:-

“LL. I say that I'm the Partner of Ratnaravi Metal Impex ("the Appellant") in the present appeal.

2.

I say that the firm had suffered heavy financial crisis in the year 2015 and due to which the business had stopped. I say that there are legal cases against the Appellant.

3.

I say that the present appeal has been filed with the Hon'ble Tribunal against the order u/s 250 of the Act dated 21.11.2024 passed by the Ld. Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.

4, I say that the assessment order u/s. 144 of the Act was passed on 26.11.2019. I say that I had not received any notice of hearing and not even received the assessment order.

5.

I say that the assessment order u/s. 144 of the Act passed on 26.11.2019 and the notices u/s. 142(1) of the Act dated 11.06.2019, 18.06.2019, 17.09.2019 and 21.09.2019 have been apparently sent on the email info@ratnaravi.com and the Appellant had neither received any notices of hearing nor the assessment order. I also, say that the email info@ratnaravi.com is closed from the year 2015. 6. I further say that, it has been stated in the assessment order that a show cause notice dated 21.09.2019 was sent on email at sureshrsanghvi@yohoo.com. This appears to be some wrong email address.

7.

I say that even the assessment order dated 26.11.2019 was not received by me.

8.

I say that subsequently, COVID-19 pandemic was set in and there was lockdown.

9.

I say that I came to know about the assessment order passed when I received acall from the Officer for some demand raised. This call came about in October 2022. I say that, immediately connected my consultant.

10.

— I say that the regular consultant handling our audits and filing of returns etc. denied to handle the scrutiny assessment as a result of dispute between us regarding the fees which he charged to us for various works. Neither he intimated us nor he guided us for the same, thus, there was a delay in filing the appeal before the CIT(A).

11.

I say that thereafter I appointed another chartered accountant, who written books of accounts from FY 2016-17 and onwards as everything was pending. It took

anerasy ance fre5201 INCOMETAX APPELLATE TRIBUNAL few months to gather all documents and details for writing books of accounts. I say that the appeal was filed before the CIT(A) on 25.05.2023. 12. I say that the communication window with the CIT(A) was enabled on 01.06.2023 and I received a Notice of Hearing u/s. 250 of the Act on 19.09.2024, 07.10.2024 and 25.10.2024 to furnish or cause to be furnished Ground wise written submission, along with supporting documentary evidences (Annexure A).

13.

I say that to the notice u/s. 250 of the Act, a response was filed on 25.05.2023 by the Chartered Accountant, wherein detailed written submission was made with annexures (Annexure B).

14.

I say that I was surprised to see that in the impugned order u/s. 250 which was passed on 21.11.2024, the appeal was dismissed as time barred and the delay in filing the appeal was not condoned.

15.

I say that the notice of hearing never raised the issue of delay and asked us to file reply on merits. I say that the delay therefore, is deemed to be condoned.

16.

I say that the delay, in filing appeal before CIT(A), is completely unintentional.

17.

I say that no transactions involving unexplained money has been undertaken, and that all cash deposits originate from cash in hand or withdrawals made in earlier years due to demonetisation, with no undisclosed or unexplained funds being deposited. I further say that the Firm's receipts comprise amounts received from debtors, cash deposits, loans accepted, dividends, and credits to the Partner's Current Account.”

4.

Considering the contents of the affidavit, we are of the considered view that in the interest of justice, the ld. CIT(A) ought to have condoned the delay and decided the appeal on merits of the case. Therefore, we deem it fit to restore the appeal to the file of the ld. CIT(A) with a direction to decide the appeal on merits of the case after affording a reasonable and adequate opportunity of being heard to the assessee.

5.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 30 April, 2025 at Mumbai. (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER

Mumbai, Dated 30/04/2025 CEA

anerasy ance fre5201 INCOMETAX APPELLATE TRIBUNAL TeRt HY vfefeta sAf¥a/Copy of the Order forwarded to amiterelf_/ The Appellant

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SIRITRY BY ORDERAssistant Registrar

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