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Facts
The assessee filed an appeal against the order of the CIT(A) which dismissed their appeal for non-prosecution. The delay in filing the appeal before the Tribunal was attributed to the Managing Director's severe viral fever during the Covid-19 pandemic, which led to the hospital staff being busy and a financial crisis affecting operations. The assessee argued that notices from CIT(A) were not received due to these circumstances, resulting in an ex-parte order.
Held
The Tribunal condoned the delay of 19 days in filing the appeal, acknowledging the medical emergency and financial difficulties faced by the assessee during the Covid-19 pandemic. The Tribunal set aside the CIT(A)'s order dismissing the appeal for non-prosecution and remanded the matter to the Assessing Officer for proper verification and examination of records.
Key Issues
Whether the assessee had sufficient cause for the delay in filing the appeal, and whether the ex-parte order of CIT(A) passed due to non-participation should be set aside and the matter remanded for fresh adjudication.
Sections Cited
68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the Order dated 29.03.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2018-2019.
2 ITA.No.1046/Hyd./2025 2. There is a delay of 19 days in filing the present appeal before the Tribunal. The assessee has filed a petition for the condonation of delay which is supported by the affidavit of the Managing Director of the assessee company. The learned Authorised Representative of the Assessee has submitted that the delay of 19 days in filing the appeal was due to the reason that Managing Director of the assessee company was suffering from severe viral fever from 20.05.2025 to 16.06.2025 and, therefore, could not take necessary steps in filing the present appeal before the Tribunal within the period of limitation. The learned Authorised Representative of the Assessee has further submitted that the delay in filing the appeal is neither intentional nor deliberate but due to the circumstances beyond the control of the assessee. He has further pointed out that during the Covid period the assessee being in hospital was busy in providing the treatment to the Covid infected patients. Thereafter, there was a lull in the business of the assessee, and the hospital was at the verge of closing due to financial difficulties. Therefore, in the absence of any 3 ITA.No.1046/Hyd./2025 staff and other employees, the notices sent by the learned CIT(A) to the email could not came into the knowledge of the management of the assessee company. Thus, he has pleaded that the delay of 19 days in filing the present appeal before the Tribunal may be condoned.
On the other hand, learned DR has submitted that though the assessee has taken a plea of medical emergency of the Managing Director of the assessee company as a reason for the delay, however, the duration of the illness as stated by the assessee is matching with the expiry of limitation period and filing of the present appeal.
We have considered the rival submissions as well as the perused the contents of the affidavit filed by the Managing Director of the assessee company. The assessee has also filed a medical certificate of the Managing Director whereby it was certified that the assessee was suffering from viral fever and diabetic problems since 20.05.2025 to 16.06.2025 and he was advised to the complete rest. Considering the reasons explained by the assessee which are supported by the medical certificate, we are satisfied that the 4 ITA.No.1046/Hyd./2025 assessee was having a sufficient cause for the delay of 19 days in filing the present appeal. Accordingly, the delay of 19 days in filing the present appeal is condoned.
The assessee has raised the following grounds of appeal:
1. “The order of learned CIT (A) is erroneous both on facts and in law; 2. The learned CIT (A) ought to have provided further opportunity before deciding the appeal without concluding the appeal ex-parte; 3. The learned CIT (A) ought to have considered the fact that the Assessing Officer is not justified in holding that the appellant did not prove the genuineness of the investments received from various parties and that the amount of Rs.38,36,12,280/- represents the unexplained cash credit u/s 68 of the I.T. Act.
4. The learned CIT (A) ought to have considered the fact that the said amount was received as a capital investment from various persons and that the said amount does not represent the income of the appellant.
5. The learned CIT (A) ought to have held that the order of assessment is not proper and that the addition is not justified and ought to have deleted the addition made; 6. Any other ground/grounds that may be urged at the time of hearing.”
6. At the outset, the learned Authorised Representative of the Assessee has submitted that during the 5 ITA.No.1046/Hyd./2025 assessment proceedings due to outbreak of severe Covid- 2019 pandemic, the entire staff of the assessee hospital was busy in treating the Covid patients and, therefore, the assessee could not participate in the assessment proceedings resulting an arbitrary addition of more than Rs.38.36 crores u/sec.68 of the Income Tax Act [in short "the Act"], 1961 in respect of the capital contributed by the shareholders. He has further pointed out that due to this situation and financial crisis, the hospital of the assessee was almost closed in the subsequent years and, therefore, the email sent by the learned CIT(A) were not brought to the notice of the Management of the assessee resulting an ex-parte order by the learned CIT(A) and dismissing the appeal of the assessee for non-prosecution. Thus, the learned Authorised Representative of the Assessee has submitted that now the assessee has filed all relevant record in respect of the funds received as a capital contribution from shareholders/ Directors/Managing Director of the assessee company which needs to be examined and verified at the level of the Assessing Officer. Hence, the learned Authorised Representative of the 6 ITA.No.1046/Hyd./2025 Assessee has submitted that the matter may be remanded to the record of the Assessing Officer for proper verification and examination of the record and then decide the matter as per law.
7. On the other hand, learned DR has submitted that despite sufficient opportunities were given by the Assessing Officer as well as the learned CIT(A) the assessee did not comply with any of the notices issued by the authorities below. Since the additions were made by the Assessing Officer for want of any supporting evidence and the impugned order of the learned CIT(A) is also passed ex-parte due to non- participation of the assessee, therefore, it is appropriate that the matter may be remanded to the record of the Assessing Officer.
8. Having considered the rival submissions and careful perusal of the Orders of the authorities below, at the outset, we note that the Assessing Officer has made the addition of the entire amount of the capital introduced by the Directors and shareholders as well as unsecured loans for want of 7 ITA.No.1046/Hyd./2025 supporting evidence. It is also an undisputed fact that the assessment proceedings were going on during the Covid- 2019 pandemic and finally, the assessment order was passed on 08.04.2021. The learned CIT(A) has also dismissed the appeal of the assessee for non-prosecution when there was no response on behalf of the assessee to the various notices issued by the learned CIT(A) through email. Considering the facts and circumstances of the case and the additions were made by the Assessing Officer for want of relevant supporting evidence and the learned CIT(A) has also confirmed the same due to non-participation of the assessee in the appellate proceedings, we are of the considered opinion that the supporting evidence filed by the assessee is required to be verified and examined at the level of the Assessing Officer. Hence, the impugned order of the learned CIT(A) dismissing the appeal of the assessee for non-prosecution is set-aside and the matter is remanded to the record of the Assessing Officer for verification and examination of the relevant record as per law, after affording appropriate opportunity of hearing to the assessee.
8 ITA.No.1046/Hyd./2025 9. In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 24th day of December, 2025.