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Facts
The assessee challenged the CIT(A)'s order for AY 2012-13, which upheld an addition of ₹54.1 crore made by the AO under Section 68 for unexplained cash credit, relating to redemption proceeds/share application money. The appeal to the ITAT was filed with a significant delay of 598 days, for which a condonation application was filed citing issues with an erstwhile accountant and unnoticed communications.
Held
The Tribunal condoned the delay after finding sufficient cause. It restored the matter to the CIT(A) to provide the assessee a fresh opportunity for proper representation, contingent upon the assessee paying a cost of ₹50,000/- to Legal Aid Services within sixty days. Failure to pay the cost would result in the CIT(A)'s order being confirmed.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the addition under Section 68 for unexplained cash credit regarding share application money/redemption proceeds was justified.
Sections Cited
250, 143(3), 147, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘A’ 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 2012-13 dated 14.08.2023, which has been passed against the assessment order u/s 143(3)/147 of the Act, dated 18.12.2019. 1. 1. The Registry has informed that the appeal filed by the assessee is barred by limitation by 598 days. An application seeking condonation of delay has been filed by the assessee stating as under: “There is a delay of 677 days in filing of appeal against the order passed u/s 250 of the Act. In this connection, it is submitted that the erstwhile accountant of the company, while filing the appeal against the assessment order, had mentioned his own e-mail ID phamirwasia@infinitypark.com in I.T.A. No.: 1338/KOL/2025 Assessment Year: 2012-13 Forum Viniyog Pvt. Ltd. the electronic Form 35. It may be mentioned that, due to falling business prospects and decline in operations of the company, the said accountant had later on left the company. It is however apprehended that the notices u/s 250 of the Act as well as the impugned appellate order dated 14.08.2023 passed u/s 250 of the Act was issued on the erstwhile email ID. It may be mentioned that, though the Director of the company had updated the email ID in the ITBA portal but inadvertently omitted to intimate the same to the Ld. CIT(A). Accordingly, the notices which were issued u/s 250 of the Act, most of which, were during the COVID-19 period went unattended. Further, the Director of the company who was later on in charge of the day-to-day affairs was not well conversant with email communications and technology. The director was not competent to login and verify the ITBA portal regularly and therefore the impugned appellate order went unnoticed. Even at the time of finalization of accounts, since the impugned Appeal Tab was closed and no longer appeared in the 'For your Action' Tab, the same escaped the attention of the auditors as well. It was only, in this month of June 2025, when the appellant was following-up for its pending refund(s) that it was informed by the office of the Assessing Officer that the refund had been adjusted against the outstanding demand for the relevant AY 2012-13, and thereafter it was gathered that an appellate order had been passed for the AY 2012-13. 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 appellant company. The company immediately collated the appeal papers for filing, which is now being preferred before the Hon'ble Bench. An affidavit from the director of the appellant 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.”
Considering the application for condonation of delay, the affidavit in connection with the previous accountant M/s. Priyanka Hamirwasia 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. I.T.A. No.: 1338/KOL/2025 Assessment Year: 2012-13 Forum Viniyog Pvt. Ltd.
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, the Ld. CIT(A) was grossly unjustified in law and on facts in dismissing the appeal ex- parte. (a) For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred on facts and in law in in confirming the AO's action of adding the refund of advance redemption proceeds of Rs.5,41,00,000/- by way of unexplained cash credit u/s 68 of the Act. (b) For that on the facts and in the circumstances of the case, the authorities below failed to appreciate that the erstwhile amalgamating company, M/s Olapab Sales Pvt Ltd had invested in Zero Percent Fully Convertible Entitlement Certificate of Rs.3,85,00,000/- in M/s Forum Real Estate Pvt Ltd in FY 2005-06 and pursuant to the amalgamation approved vide order of Hon'ble Calcutta High Court dated 02.09.2010, the said investment stood merged in the books of the assessee which was redeemed and repaid by M/s Forum Real Estate Pvt Ltd during the year and therefore the said proceeds cannot be regarded as unexplained cash credit u/s 68 of the Act. (c) For that on the facts and in the circumstances of the case, the authorities below failed to appreciate that the assessee had advanced loan Rs1,56,00,000/- to M/s Forum Real Estate Pvt Ltd which was refunded by the latter during the year and therefore were unjustified in taxing the refund of outstanding advance by the borrower by way of unexplained cash credit u/s 68 of the Ac.t
For that the appellant 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 filed the return of income for AY 2012-13 on 29.09.2012 declaring ‘NIL’ income which was processed u/s 143(1) of the Act by the CPC. Based on the information received from DDIT (Investigation), Kolkata the Assessing Officer (hereinafter referred to as Ld. 'AO') found that the assessee company had received funds amounting to ₹5,41,00,000/- from a bank account maintained with ICICI Bank held in the name of M/s. Forum Real Estate Pvt. Ltd. The assessment was made u/s 143(3) r.w.s. 147 of the Act on I.T.A. No.: 1338/KOL/2025 Assessment Year: 2012-13 Forum Viniyog Pvt. Ltd. 18.12.2019 determining total income of ₹5,41,00,000/- inter-alia making addition of ₹5,41,00,000/- u/s 68 of the Act for the share application money received by the assessee from M/s. Forum Real Estates Pvt. Ltd. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued 5 notices and as there was no compliance from the assessee company, the Ld. CIT(A) observed that the Ld. AO had carried out an in-depth investigation before making the impugned addition of ₹5,41,00,000/- u/s 68 of the Act. The assessee had failed to furnish relevant details in the course of the assessment proceedings and in the appeal proceeding as well. Therefore, he inferred that the assessee had nothing in its possession to substantiate the grounds of appeal and thus, negate the finding made by the Ld. AO in the assessment order. Thus, the Ld. CIT(A) dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before this Tribunal.
Rival contentions were heard and the submissions made have been examined. At the outset, the Ld. AR submitted that proper submission could not be made before the Ld. CIT(A) and the Ld. AO and the final show cause notice was not attended. The assessee requested the Bench to remit the matter to the Ld. AO so that proper submission could be made as the investments were made in the earlier years and did not pertain to the impugned assessment year but in the absence of proper representation, the addition was made which has been confirmed since proper representation was not made before the Ld. CIT(A) as well. I.T.A. No.: 1338/KOL/2025 Assessment Year: 2012-13 Forum Viniyog Pvt. Ltd.
We have considered the submissions made. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. However, the Bench was of the view that in the interest of justice, the assessee should be granted one more opportunity. This being so, the issue in this appeal is restored to the file of the Ld. CIT(A) subject to the assessee paying a cost of ₹50,000/- (Rupees Fifty Thousand) to the Legal Aid Services, 3rd Floor of the Centenary Building, High Court, Calcutta - 700001, within sixty days from the date of this order and produce the receipt of the same before the Ld. CIT(A). In case the assessee does not pay the above-mentioned cost of ₹50,000/- within the prescribed period of sixty days from the date of this order, the order of the Ld. CIT(A) shall stand confirmed. Hence, the grounds of appeal raised are partly allowed for statistical purpose.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 3rd September, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 03.09.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1338/KOL/2025 Assessment Year: 2012-13 Forum Viniyog Pvt. Ltd. Copy of the order forwarded to:
Forum Viniyog Pvt. Ltd., Plot A-3, Block GP Infinity, Sector-V, Saltlake, Kolkata, West Bengal, 700091. 2. ITO, Ward-8(2), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order