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Facts
The assessee's income tax return, declaring zero income, was selected for scrutiny. The Assessing Officer (AO) disallowed unsecured loans under Section 68 (₹40,93,965) and a deduction claimed under Section 80P(2)(c)(ii) (₹25,48,640), as the assessee failed to respond to notices and queries. The assessee filed an appeal before the CIT(A) with a 327-day delay, which the CIT(A) dismissed in limine without addressing the merits.
Held
The Income Tax Appellate Tribunal (ITAT) observed that the assessee provided reasons for the delay (lack of awareness, technical issues) and had filed a notarized affidavit. In the interest of justice, the ITAT remanded the case back to the CIT(A) to condone the delay and adjudicate the appeal on its merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine due to a 327-day delay in filing, and if the delay should be condoned to allow adjudication on the merits of additions made under Section 68 and Section 80P(2)(c)(ii).
Sections Cited
68, 143(2), 142(1), 80P(2)(c)(ii)
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
Year: 2020-21 C-2573 Dhamalerimuthur PACCS Ltd., Vs. The Income Tax Officer, 188/2, Dhamalerimuthur, Ward 1, Tirupattur, 635 853. Vellore. [PAN:AABAD1030D] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Jainendar, C.A. ��थ� की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 01.07.2025 घोषणा की तारीख /Date of Pronouncement : 17.07.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 18.03.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2020-21.
The assessee raised 9 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 68 of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
Brief facts relating to the case are that the assessee filed return of income declaring total income of ₹.0. The case of the assessee was selected for complete scrutiny through CASS and notice under section 143(2) of the Act dated 29.06.2021 was issued on the assessee. Various notices under section 142(1) of the Act as well as various show-cause notices were issued on the assessee. However, there was no response from the assessee. The Assessing Officer noted high liabilities of ₹.7,20,66,770/- pertains to banks and therefore, no inference was drawn. Further, the Assessing Officer noted unsecured loans from others have been shown at ₹.48,91,127/-, but, however, no reply was furnished by the assessee to the specific query in the notice under section 142(1) of the Act dated 25.10.2021. Thus, the Assessing Officer disallowed the unsecured loans from others for want of confirmation, genuineness, proof of identity and creditworthiness, but, however, the figure of unsecured loans in preceding year was ₹.7,97,162/- and accordingly, the Assessing Officer disallowed the unsecured loans to an extent of ₹.40,93,965/- [₹.48,91,127-7,97,162/-] and added to the total income of the assessee. Further, the Assessing Officer noted that the assessee has claimed deduction under section 80P(2)(c)(ii) of the Act at ₹.25,98,640/-, whereas, the section provides only for deduction upto ₹.50,000/-. Since the assessee could not file any reply to the specific queries, the Assessing Officer disallowed the deduction claimed in excess of ₹.50,000/- being ₹.25,48,640/- and added to the total income of the assessee.
Aggrieved, by the assessment order, the assessee preferred an appeal before the ld. CIT(A) with a delay of 327 days in filing the appeal. The ld. CIT(A) did not accept the reasons explained by the assessee for the said delay and dismissed the appeal in limine without adjudicating the issues on merits. The assessee is in appeal before us as aggrieved by the order of the ld. CIT(A).
The ld. AR Shri P. Jainendar, C.A. submits that the order of the ld. CIT(A) is against the law, the facts and circumstances of the case and the principals of equity and natural justice. He argued that the ld. CIT(A) dismissed the appeal on technicalities without adjudicating the case on merits. He submits that the delay in filing the appeal before the ld. CIT(A) is purely due to unaware of the facts and provisions, unqualified tax consultant and lack of awareness regarding the e-proceedings and demonstrated reasonable cause and bonafide reasons for the delay. The ld. AR prayed to remand the matter to the file of the ld. CIT(A) with a direction to condone the delay and adjudicate the issues on merits.
The ld. DR Ms. R. Anita, Addl. CIT relied on the order of the ld. CIT(A).
Heard both the parties and perused the material available on record. We note that the ld. CIT(A) reproduced the submissions of the assessee explaining the reasons for the delay in para 5.1 of the impugned order. On perusal of the same, we note that the assessee contended that he was not well versed with computer and e-mails and not even aware of conclusion of assessment. Non-response to the notices issued by the Assessing Officer is either wilful or wanton. The ld. AR further submits that due to the circumstances beyond his control, the assessee could not file explanation/documentary evidence in support of his claim before the ld. CIT(A) and prayed to afford an opportunity to the assessee as the assessee is ready to prosecute his case without fail. The assessee has also filed notarized affidavit dated 01.07.2025 by undertaking to provide all necessary information/documents as may be required by the authority and fully cooperate with the first appellate authority without fail. Considering the facts and circumstances of the case and submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to condone the delay and adjudicate the issue on merits after considering the details/ documentary evidences as may be filed by the assessee for its claim. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 17th July, 2025 at Chennai.