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Facts
The assessee filed its ITR for AY 2018-19 claiming exempt dividend income. The Assessing Officer reopened the assessment, adding dividend income (₹1,01,10,807) and disallowing short-term capital loss (₹2,09,340) due to alleged suspicious transactions. The CIT(A) dismissed the assessee's appeal ex-parte for non-compliance, leading the assessee to appeal before the ITAT with an 88-day delay.
Held
The ITAT condoned the 88-day delay in filing the appeal, finding it to be for sufficient cause (due to an inaccessible email ID). The Tribunal set aside the CIT(A)'s ex-parte order and restored the appeal back to the CIT(A) for fresh adjudication on merits, instructing to provide a reasonable opportunity of being heard to the assessee and pass a speaking order.
Key Issues
Condonation of delay in filing appeal; legality of reassessment proceedings initiated under Sections 147/148/148A; disallowance of short-term capital loss; and addition of dividend income by denying exemption under Section 10(34).
Sections Cited
250, 147, 144B, 253(3), 253(5), 139(1), 148A(d), 148A, 148(b), 148, 94(7), 10(34), 250(6), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 19.12.2024, which has been passed against the assessment order u/s 147 r.w.s. 144B of the Act, dated 14.03.2024. During the course of hearing before us, the assessee filed an adjournment application. Since the adjournment was not on sufficient ground, therefore, the same was rejected and the appeal was heard. I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited.
The Registry has informed that the appeal filed by the assessee is barred by limitation by 90 days. An application seeking condonation of delay has been filed by the assessee stating as under: “This is with reference to the appellate order bearing date 19.12.2024 passed by the Ld. CIT(A), NFAC, Delhi u/s 250 of the Act for the captioned Assessment Year. Aggrieved by the impugned order, the assessee has preferred an appeal before the Hon'ble Bench of Income-tax Appellate Tribunal, Kolkata. As per the provisions of Section 253(3) as amended vide Finance Act 2024, appeal before the Hon'ble Income Tax Appellate Tribunal against the order u/s 250, has to be filed within two months from the end of the month in which the order sought to be appealed against is communicated Further, as per the provision of Sec. 253(5), the Hon'ble Appellate Tribunal may admit an appeal after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. Admittedly, there is a delay of 88 days in filing of appeal against the order passed u/s 250 of the Act. In this connection, it is submitted that the concerned person in-charge of the income-tax matter of the assessee company, including the filing of the appeal against the assessment order in Form 35, had inadvertently mentioned his e-mail ID 'sagar10.itr@gmail.com' in the Form 35 filed electronically. The concerned person who had the access to this e-mail ID had left the assessee company in the beginning of the financial year 2024-2025, subsequent to filing of the appeal in electronic Form 35. The e-mail ID 'sagar10.itr@gmail.com' was therefore not accessible by the management of the assessee company from FY 2024-25 onwards. The e-mail ID which was mentioned by the assessee company in its return of income filed u/s 139(1) of the Act for every assessment year, for the purposes of communication with the Department, was shyam_sel@rediffmail.com. It is submitted that, although the system generated notice for enablement of communication window was communicated to both the e-mail IDs shyam_sel@rediffmail.com' and 'sagar10.itr@gmail.com', but the hearing notices u/s 250 of the Act and the appellate order dated 19. 12.2024 passed u/s 250 of the Act was communicated on the email ID 'sagar10.itr@gmail.com which was not accessible by the assessee company and for this reason, the notices issued u/s 250 of the Act and the order passed on 19.12.2024 both went unattended. It was only, in the month of May 2025, when the management of the assessee company was filing appeals before the Hon'ble ITAT, Kolkata in the cases of its group companies, that the management logged I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. into the e-portal of the assessee company to check the status of the appeal filed against the assessment order passed u/s 147 of the Act in its case for AY 2018-19, and noticed that the appeal had been dismissed by the Ld. CIT(A), NFAC vide an appellate order dated 19.12.2024 passed u/s 250 of the Act. Thereafter, immediately, the relevant papers were collated and shared the same with the tax counsel to advise for the way forward. The tax counsel, accordingly prepared the appeal draft and the same was shared with the management of the assessee company. The company immediately collated the appeal papers for filing, which is now being preferred before the Hon'ble Bench. An affidavit from the concerned person- in-charge of the tax affairs of the assessee company affirming the facts stated in this letter is enclosed at Annexure -1. Hence, the present appeal has been preferred before your Honours. For the aforesaid reasons, there was a bonafide delay on the part of the appellant to prefer the appeal within the prescribed time limit. It is further submitted that for doing substantive justice in the matter and to ensure that our total income is assessed as per the settled legal principles, it is requested that the delay be condoned and the appeal be admitted. We submit that the delay was neither deliberate nor intentional and therefore it is a fit case where the Hon'ble Tribunal should condone the delay for rendering substantive justice. In this regard, reference is drawn to the decision of Hon'ble Apex Court in the case of Improvement Trust vs. Ujagar Singh & Ors. (2010) 6 SCC 786 (SC) wherein it has been held that unless mala fide intention exists in the conduct of the party, generally as a normal rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. Apart from the above, the applicant would not have gained in any manner whatsoever, by not filing the application within the period of limitation Further, the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji (1987) 1987 taxmann.com 1072 (SC) also deliberated on the expression "sufficient cause" and held that ...The expression 'sufficient cause' employed by the Legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institutions of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other courts in the hierarchy." The Apex Court also observed that I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. ....Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and the cause of justice being defeated. As against this, the highest that can happen is that a cause would be decided on merits after hearing the parties. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay" The delay of 88 days in filing of application u/s 253(5) by the assessee company is thus based on aforesaid bonafide cause. It is humbly submitted that your Honours have the power to condone the delay and the same needs to be exercised liberally. Based on the aforesaid, it is humbly prayed that the delay in presenting the appeal be condoned and the appeal be admitted, in the interest of substantial justice.”
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was grossly unjustified in law and on facts in dismissing the appeal ex-parte.
(i) For that on the facts and circumstances of the case and in law, the order passed u/s 148A(d) of the Act by the JAO for reopening the assessment was based on incorrect and unverified information, lacking any cogent material or evidence and in that view of the matter, the impugned reopening u/s 147 of the Act ought to be held as bad in law. (ii) For that on the facts and in the circumstances of the case, the JAO failed to satisfy the condition precedent in Section 148A of the Act before reopening the assessment and in that view of the matter, the impugned proceedings u/s 147/144B and the consequent reassessment order dated 14.03.2024 passed u/s 147/144B of the Act ought to be declared bad in law. I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. (iii) For that on the facts and in the circumstances of the case and in law, the so-called information was not backed by any specific evidence / material in as much as the specific evidence / material was never supplied to the assessee, during the proceedings conducted u/s 148A of the Act and in that view of the matter, the action of the JAO reopening the assessment for AY 2018-19 sans the specific information/ evidence/ material deserves to be held as bad in law. (iv) For that on the facts and in the circumstances of the case and in law, the assessee having furnished its objections to the impugned information contained in the show cause notice issued u/s 148(b), the JAO was unjustified in not objectively dealing with the same before reopening the assessment and in that view of the matter, the notice dated 11.04.2022 issued u/s 148 of the Act by the JAO reopening the assessment in the most arbitrary and ad-hoc manner, deserves to be held as bad in law and ought to be quashed. (v) For that on the facts and in the circumstances of the case and in law, the assessee having already disallowed the short term capital losses incurred on sale of mutual funds units of M/s IM Financial Asset Management Limited to the extent of dividend received, in accordance with the provision of the Section 94(7), there was no further income escaping assessment and in that view of the matter, the impugned reopening and the consequent order passed u/s 147 of the Act stood vitiated in law and thus deserves to be cancelled. (vi) For that on the facts and in the circumstances of the case, the Notice u/s 148 of the Act was issued by the JAO who did not hold valid juri iction to issue the impugned notice and in that view of the matter, the consequent proceedings u/s 147 of the Act stood vitiated in law and thus deserves to be quashed.
(1) For that on the facts and in the circumstances of the case and in law, the lower authorities grossly erred in holding that the dividend of Rs.1,01,10,807/- earned from the units of mutual funds of M/s JM Financial Asset Management Limited was a sham transaction and thereby denying the exemption u/s 10(34) of the Act and taxing the same as the business income of the assessee. (ii) For that on the facts and in the circumstances of the case and in law, the lower authorities failed to appreciate that violation of SEBI guidelines, if any, by the Mutual Fund cannot be held against the appellant to justify the impugned addition of Rs.1,01,10,807/-and in that view of the matter, the addition of ₹1,01,10,807/- being unsustainable in law, deserves to be deleted in full. I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. (iii) For that on the facts and in the circumstances of the case and in law, the assessee having substantiated the genuineness of the dividend income, the impugned addition of Rs.1,01,10,807/- which has been made on wild conjecture & surmises having no cogent basis or logic whatsoever, deserves to be deleted in full. (iv) For that on the facts and in the circumstances of the case and in law, the statements of the employee/s of M/s IM Financial Asset Management Limited relied upon by the NFAC was never supplied to the assessee and in that view of the matter, the reliance placed by the NFAC on such statements to justify the impugned addition was grossly unjustified. 4.(1) For that on the facts and circumstances of the case and in law, the lower authorities grossly erred in disallowing the short term capital loss of Rs.2,09,340/- incurred on sale of mutual funds units of M/s JM Financial Asset Management Limited on mere suspicion and surmises and in that view of the matter, the impugned disallowance of Rs.2,09,340/- may kindly be deleted in full (ii) For that on the facts and circumstances of the case and in law, the assessee having already disallowed the loss incurred on sale of JM Mutual Fund to the extent of dividend income of Rs.1,01,10,807/- in terms of Section 94(7), the further short term capital loss of Rs.2,09,340/- claimed in the return of income filed for the relevant AY 2018-19 was in accordance with law and thus the impugned disallowance was unjustified.
For that on the facts and in the circumstances of the case, the assessee craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before.”
Brief facts of the case are that the assessee had filed its income tax return for AY 2018-19 u/s 139 of the Act showing total income of ₹43,28,900/- after claiming exempt income of ₹1,01,82,029/-. Thereafter, it was found by the Assessing Officer (hereinafter referred to as Ld. 'AO') that the assessee had engaged in suspicious transactions for earning dividend income during the previous year relevant to AY 2018-19. The assessment proceedings in the assessee's case for AY 2018-19 were reopened by issue of notice u/s 148 of the Act. The Ld. AO added a sum of ₹1,01,10,807/- and ₹2,09,340/- as business income to the returned income of the assessee and assessed the total income of I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. the assessee at ₹1,46,49,047/- u/s 147 r.w.s. 144B of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued four notices for hearing but all the notices were not complied with, therefore, relying upon several judicial pronouncements, he dismissed the appeal of the assessee by holding as under: “3.8 Considering the above discussion and facts, it is clear that the appellant assessee is not pursuing its case on merits. In pursuance of its appeal the appellant assessee did not file any documents in support of its claim that why addition of Rs. 1,03,20,147/- is not sustainable. The appeal cannot be decided merely on the basis of grounds of appeals and statement of facts as no corroborative evidence of any kind has been submitted by the appellant assessee. Based on these observations the appeal filed by the appellant assessee is dismissed and the order of the AO is confirmed. In result the appeal is hereby dismissed.”
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. The Ld. AR submitted that proper opportunity was not provided by the Ld. CIT(A).
We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). After examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal back to the Ld. CIT(A) for disposal of the grounds of appeal taken by the assessee on merit by passing a speaking order as is required u/s 250(6) of the Act. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 27th October, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 27.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1164/KOL/2025 Assessment Year: 2018-19 Shyam Greenfield Developer Private Limited. Copy of the order forwarded to:
Shyam Greenfield Developer Private Limited, S.S. Chamber, 2nd Floor, Princep Street, C.R. Avenue, Kolkata, West Bengal, 700072. 2. ITO, Ward-2(1), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order