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Facts
The appellant, a private limited company, filed a return declaring an income of Rs. 1,417/-. The case was reopened under Section 147, and the Assessing Officer (AO) believed the appellant received unexplained funds of Rs. 7,40,200/-. The AO treated these transactions as sham and made an addition, assessing total income at Rs. 7,41,617/-. The appeal to the CIT(Appeals) was filed with a delay of 213 days.
Held
The CIT(Appeals) dismissed the appeal due to the delay, finding that the assessee failed to establish a reasonable cause for condonation. The Tribunal, however, found that the delay occurred due to wrong advice from the authorized representative and condoned the delay.
Key Issues
Whether the delay in filing the appeal before the CIT(Appeals) was sufficiently explained and should be condoned. Whether the additions made by the AO and confirmed by CIT(Appeals) were justified on merits.
Sections Cited
147, 148, 143(2), 142(1), 69A, 144B, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2013-2014 Romex Developers Pvt. Limited,…..…………Appellant 23, Strand Road, Kolkata-700001 [PAN:AAFCR0812D] -Vs.- Income Tax Officer,………………….…………...Respondent Ward-4(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Soumitra Chaudhury, Advocate, appeared on behalf of the assessee Shri Somnath Das Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: March 20, 2025 Date of pronouncing the order: May 29, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 27th August, 2024 passed for Assessment Year 2013-14.
(A.Y. 2013-2014) Romex Developers Pvt. Limited 2. The appellant is a Private Limited Company, which filed its return of income by declaring total income at Rs.1,417/-. The case was reopened under section 147 of the Act. On the basis of information received from ADIT (Inv.), Unit-3(2), Kolkata, the ld. Assessing Officer believed that the appellant had received an amount of Rs.7,40,200/- during the year under consideration in its Bank account bearing No. 01900210005379 maintained with UCO Bank, 19, B.T.M. Sarani, Brabourne Road, Kolkata. The source of fund received was unexplained and the assessee had transacted with shell entities, whose identity, genuineness and creditworthiness remained unexplained. Accordingly notice under section 148 of the Act dated 16.03.2021 was issued and served on the assessee. Notices under section 143(2) and 142(1) were also issued and served upon the assessee. After considering the submissions made by the assessee, the ld. Assessing Officer concluded that the transactions made by the appellant were sham transactions and treated the same as unexplained money under section 69A of the Act. Accordingly, total income of the assessee was assessed by the ld. Assessing Officer at Rs.7,41,617/- as against the returned income of Rs.1,417/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals) with a delay of 213 days and filed condonation petition.
After considering the submissions made by the assessee, the ld. CIT(Appeals) dismissed the appeal saying that the assessee failed to establish the reasonable cause to condone the delay of 213 days.
(A.Y. 2013-2014) Romex Developers Pvt. Limited 4. On being aggrieved, the assessee preferred an appeal before the ITAT and raised the following issues:- (1) For that on the facts and in circumstances of the case, the order passed by the Ld. C.I.T.(A) on 27.08.2024 is completely arbitrary, unjustified and illegal. (2) For that on the facts and in circumstances of the case reopening of assessment under borrowed satisfaction is bad in law and should be set aside. (3) For that on the facts and in circumstances of the case, the Ld. C.I.T.(A) was not justified in confirming the addition of Rs. 7,40,200/- made by the A.O. in assessment order u/s. 147 read with section 144B of the Income Tax Act, 1961 on account of discrepancy of accounts treating the same as unexplained money u/s. 69A of the Income Tax Act, 1961 which is completely arbitrary, unjustified and illegal and is not a fact. (4) For that on the facts and in circumstances of the case the addition based on assumption, presumption, suspicion, conjecture and surmise which is bad in law and should be set aside. (5) For that on the facts and in the circumstances of the case, the Ld. C.I.T.(A) erred in passing the impugned order dated 27.08.2024 without adjudicating on the substantive merits of the case, basing the decision solely on the procedural aspect of delay in filing the appeal. By doing so, the Ld. C.I.T.(A) failed to provide the appellant a fair and just opportunity to present its case, disregarding the substantive issues raised in the appeal and thereby causing a miscarriage of justice. (6) For that on the facts and in circumstances of the case, the impugned order passed by the Ld. C.I.T.(A) is therefore arbitrary, unjust, and against the principles of natural justice, as it denies the appellant its right to a fair hearing and due process. (7) For that on the facts and in circumstances of the case, the charging interest u/s. 234B amounting to Rs. 2,46,996/- which is mechanically wrong and illegal. (8) For that on the facts and in circumstances of the case it is prayed that a stay on demand may kindly be granted during the pendency of the said appeal.
(A.Y. 2013-2014) Romex Developers Pvt. Limited 5. I have heard both the sides. It was the submission of the ld. Counsel for the assessee that the then Authorized Representative of the assessee was not properly advised the assessee. Therefore, the assessee has not preferred any appeal within the time stipulated by the Act. Thereafter the assessee himself decided to challenge the action of the ld. Assessing Officer. Getting no proper advice from the then Authorized Representative, the assessee is not able to prefer an appeal before the ld. CIT(Appeals), therefore, the delay was occurred. The ld. Counsel for the assessee further pleaded that the assessee has fair chance to win the case and pleaded to set aside the order passed by the ld. CIT(Appeals) and remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal on merits.
On the other hand, ld. Departmental Representative for the Revenue submitted that the assessee has not satisfactorily explained the reasons to condone the delay of 213 days. Therefore, the ld. CIT(Appeals) has rightly dismissed the appeal filed by the assessee. He pleaded to uphold the order passed by the ld. CIT(Appeals).
I have perused the material available on record. Considering the facts and circumstances of the case, I am of the view that the delay occurred due to wrong advice of the then Authorized Representative of the assessee. Therefore, considering the facts and circumstances of the case, I am of the view that it is a fit case to condone the delay and accordingly, I condone the delay of 213 days and remit the matter back to the file of ld. CIT(Appeals) with (A.Y. 2013-2014) Romex Developers Pvt. Limited a direction to dispose of the appeal on merits. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/05/2025.