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Facts
The assessee, a private limited company, is engaged in the business of manufacturing and selling IMFL. During a survey, it was noted that a large amount was disallowed for AY 2015-16, and for AY 2021-22, TDS was made but not remitted. The Assessing Officer passed orders under Section 201/201(1A) after the assessee failed to respond to notices. The CIT(A) also passed ex-parte orders.
Held
The Tribunal condoned the delay in filing the appeals, noting the assessee's unawareness of notices. While acknowledging the assessee's negligence, the Tribunal, in the interest of justice, set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for fresh adjudication after providing a reasonable opportunity to the assessee.
Key Issues
Whether the assessee's non-compliance and failure to respond to notices from the AO and CIT(A) warrant upholding the ex-parte orders, or if the delay and lack of awareness constitute sufficient cause for remanding the matter.
Sections Cited
201, 201(1A), 40(a)(iii), 250
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER S.R.RAGHUNATHA, AM:
These appeals by the assessee are arising out of the orders dated 21.03.2025 and 28.03.2025 respectively, passed by the Learned Commissioner of Income Tax (Appeal), Kochi and the Learned Commissioner of Income Tax (Appeal)-2, Jaipur (in short “ld.CIT(A)”) for the assessment year (A.Y.) 2015-16 and A.Y.2021-22 against the orders u/s.201/201(1A) of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO, TDS, Circle-1(1), Chennai dated 21.03.2025 and 28.03.2025 respectively.
At the outset, we find that there is a delay of 115 days before us in both the appeals filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was unaware of the notices and E-mail ID was not of the assessee and the assessee became aware of the impugned order only on visiting CA office for statutory compliance. Hence, there was a delay in filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit the appeals filed by the assessee for adjudication.
Brief facts of the case are that the assessee is a private limited company engaged in the business of manufacturing, bottling and selling IMFL. During the survey conducted at Registered Office of the assessee by the AO on 05.01.2022, a statement was recorded from Mr.Devarajan, Group CEO. During the survey and post survey verification, the AO noticed that for the ITR filed for the A.Y.2015-16, an amount of Rs.7,71,35,249/- was disallowed under ‘Amount disallowable u/s.40(a)(iii) of the Act’ on account of non-compliance with the provisions of Chapter XVII-B of the Act. Further, the AO found that the assessee made TDS for A.Y.2021-22 to the tune of Rs.3,08,51,344/- but did not remit the same to the Government account. Based on the above, the AO issued statutory notices and SCN to the assessee, but assessee has not responded to the hearing notices. Since the assessee has not responded to the notices, based on the survey and other materials available on record, the AO passed orders u/s.201/201(1A) dated 30.03.2022 and 04.05.2022 for the A.Y.2015-16 and A.Y 2021-22 respectively.
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A). Further, the appeals were migrated to the e-Appeal Scheme, 2023, notices of hearing u/s.250 of the Act. However, the assessee did not respond to any of the notices issued by the ld.CIT(A) from 18.07.2023 to 17.03.2025 as shown in paragraphs 1 and 2 of the orders. Hence, the ld.CIT(A) passed an exparte orders dated 21.03.2025 and 28.03.2025 respectively by confirming the order of the AO and dismissed the appeal of the assessee.
The ld.AR submitted that the assessee had not regularly checked the income tax portal and its email ID and hence the assessee was not aware of the notices issued by the ld.CIT(A) and hence he could not submit the written submission and valid evidence before the ld.CIT(A). In view of the above, the ld.AR prayed to set aside the order of ld.CIT(A) and remit the issues to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the first appellant authority to complete the appellate proceedings effectively.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed orders by considering the submissions made by the assessee along with the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC due to non-compliance of the assessee and lack of documentary evidence before the first appellate authority. Since the assessee has failed to participate before the appellate authority and also delay in filing the appeal before us, we levy the cost of Rs.10,000/- (Rs.5,000/- for each appeal) to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, & 2620/Chny/2025 after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 09th December, 2025 at Chennai.