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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Gayatri ECI (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 06.06.2024 for the A.Y. 2017-18.
The assessee has raised the following grounds of appeal :
1. “ 1. The order of the Learned CIT(A) is against the law, weight of evidence and probabilities of case.
2. The Learned CIT(A) erred in confirming the order of the Assessing Officer wherein an expenditure of Rs.3,37,91,319/- is disallowed.
The Learned CIT(A) erred ought to have appreciated that the assessee produced books of accounts and also ledger copy of the Gayatri Projects Ltd., therefore erred in disallowing an amount of Rs.3,37,91,319/-.
4. The Learned CIT(A) erred in assuming that the partner of JV i.e. Gayathri Projects have not offered Rs. For taxation purpose, therefore, further erred in confirming the disallowance made by the Assessing Officer to an extent of Rs.3,37,91,319/-.
The appellant craves leave toad to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.”
3. At the outset, it is observed that there is a delay of 3 days in filing the present appeal before the Tribunal. The assessee filed a condonation petition along with an affidavit explaining the reasons for such delay. It has been submitted by the learned Authorised Representative (“Ld. AR”) that the delay occurred due to the ill-health of the staff member who was conversant with the e-filing process. The learned Departmental Representative (“Ld. DR”) did not raise any serious objection to the condonation. Considering the short period of delay and the reasons furnished in the affidavit, we find that the delay is on a reasonable ground. Accordingly, the delay of three days is condoned, and the appeal is admitted for adjudication.
Brief facts of the case are that, the assessee is a joint venture comprising two partners: (i) M/s Gayatri Projects Ltd., and (ii) M/s ECI Engineering and Construction Company Ltd. The assessee filed its return of income for the assessment year 2017–18 on 27.10.2017, declaring total income of Rs.68,25,703/-. The case was selected for scrutiny and assessment was completed under Section 143(3) read with Section 144C(4B) of the Income Tax Act, 1961 (“the Act”) on 23.04.2021. The learned Assessing Officer (“Ld.
AO”) made an addition of Rs.3,37,91,319/- on account of disallowance of expenses, thereby assessing the total income at Rs.4,06,17,019/-.
5. Aggrieved by the order of Ld. AO, the assessee filed an appeal before the Ld. CIT(A). However, the appeal was dismissed by the Ld. CIT(A) due to non-compliance by the assessee with notices issued during the appellate proceedings.
Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The Ld. AR submitted that the notices issued by the Ld. CIT(A) were served on the registered e-mail ID of one of the joint venture partners, namely M/s Gayatri Projects Ltd., which at the relevant time was undergoing corporate insolvency resolution proceedings before the Hon’ble National Company Law Tribunal (“NCLT”). The Ld. AR placed on record a copy of the NCLT order to substantiate the pendency of such proceedings. Accordingly the Ld. AR submitted that the assessee could not responded to the notices issued by the Ld. CIT(A) due to unavoidable circumstances. He further submitted that the appeal of the assessee before Ld. CIT(A) could not be adjudicated on merits.
On the basis of principle of natural justice the Ld. AR requested for providing one more opportunity to the assessee for prosecuting its case on merits.
Fianally, the Ld. AR prayed before the bench for remand of the issue to the file of Ld. CIT(A) for adjudication on merits.
Per contra, the Ld. DR objected to the remand by contending that adequate opportunities were already provided by the Ld. CIT(A).
We have heard the rival submissions and perused the material available on record. On perusal of the same, we find merit in the contention of Ld. AR that due to the pendency of NCLT proceedings, the partner M/s Gayatri Projects Ltd. could not effectively communicate the receipt of appellate notices to the joint venture entity, which resulted in non-compliance before the Ld. CIT(A). In such circumstances, we are of the view that the assessee was prevented by a reasonable cause from prosecuting its appeal effectively. The Ld. DR objected to the remand by contending that adequate opportunities were already provided by the Ld. CIT(A). However, in the facts of the present case, we are inclined to take a liberal view, as non-compliance appears to be on account of events beyond the control of the assessee due to partner-level NCLT proceedings.
In view of the above and considering the principles of natural justice, we are of the considered opinion that one more opportunity should be granted to the assessee to present its case on merits before the Ld. CIT(A). Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter to his file with a direction to adjudicate the appeal afresh after providing reasonable opportunity to the assessee to submit relevant documents and evidence in support of its claim. The assessee is also directed to cooperate in expeditious disposal of the appeal.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 23rd June, 2025.