Loading judgment…
Facts
The assessee filed an appeal after a delay of 51 days, which was condoned by the Tribunal. The case involves alleged escaped income from sales/service transactions, with the AO making additions for sales and disallowing building maintenance expenses. The CIT(A) dismissed the appeal due to the assessee's non-participation.
Held
The Tribunal condoned the delay in filing the appeal. Observing that the AO passed an order without considering the assessee's submissions and the CIT(A) dismissed the appeal due to non-participation, the Tribunal set aside the order and remitted the matter back to the AO for a de novo assessment.
Key Issues
Whether the delay in filing the appeal should be condoned? Whether the CIT(A) erred in dismissing the appeal due to non-participation, and if the matter should be remanded for de novo assessment considering the AO's alleged failure to consider submissions.
Sections Cited
148, 147, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM:
This appeal by the assessee is filed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, vide order dated 29.03.2025 for A.Y.2004-05.
At the outset, we find that there is a delay of 51 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee’s director was away on a business trip and owing to the prior commitments made, he could not look into the matter and convene the board meeting to take appropriate action on the same. Hence, there
:-2-: ITA. No.:2017/Chny/2025 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 appeal and admit the appeal filed by the assessee for adjudication.
The brief facts of the case are that the assessee is a company engaged in the business of manufacturing automobile components and supply to OEM and filed its return of income on 01.11.2004 for the A.Y 2004-05 declaring a total income of Rs.2,56,650/-. As per the information received from DDIT(Inv), Unit IV(2), Chennai, the AO found that the assessee made sales/service transactions to the extent of Rs.48,74,882/-, whereas in the income and expenditure statement, the assessee had admitted only rental income of Rs.6,66,667/- against which administrative expenses of Rs.2,69,364/- has been claimed. Therefore, there was reason to believe that income escaped assessment. Accordingly, notice u/s.148 was issued to the assessee on 29.03.2010. In response, the assessee filed a letter dated 28.10.2010 requesting to treat the return already filed on 01.11.2004 after lapse of six months. Later the case had reopened us.147 of the Act and accordingly statutory notices were issued to the assessee and also provided the reason for reopening. In response to the above-mentioned notices, the AR of the assessee participated in assessment proceedings and furnished the details called for. On perusal of the information received from the assessee, the AO concluded the assessment proceedings and passed an order u/s.143(3) of the Act dated 31.12.2010 by making an addition of Rs.48,74,882/- on account of sales and Rs.1,38,485/- on account of disallowance of building maintenance expenses and determined the taxable income of Rs.52,74,260/-.
Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), NFAC, Delhi.
:-3-: ITA. No.:2017/Chny/2025 5. At the outset, we observed that the Ld.CIT(A) has provided ten opportunities to the assessee to appear for hearings as detailed in paragraph 7 of the CIT(A) order from 06.01.2021 to 26.03.2025 to support the appeal of the assessee. However, the assessee responded to a few of the notices for seeking adjournment only. Further, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A) dismissed the appeal of the assessee by confirming the order of Assessing Officer dated 29.03.2025. Aggrieved by the order of ld.CIT(A), the assessee has filed an appeal before us.
The ld.AR submitted that the AO erred in making the addition of the entire unaccounted sales and expenses for building maintenance under the facts and circumstances of the case. The ld.CIT(A) erred in not considering the remand report issued by the AO and confirming the order of the AO. Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the AO in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the AO, in case one more opportunity is provided.
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 Assessing Officer has passed an order without considering the information submitted by the AR of the assessee and the same has been dismissed by the ld.CIT(A), NFAC, Delhi due to non-participation of the assessee before the first appellate authority.
:-4-: ITA. No.:2017/Chny/2025 9. In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 23rd October, 2025 at Chennai.