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Facts
The assessee failed to file its income tax return for AY 2011-12 despite receiving contract receipts. The case was reopened under Section 147, and additions were made for unexplained cash credit and undisclosed income. The CIT(A) confirmed these additions.
Held
The Tribunal condoned a 19-day delay in filing the appeal. While the CIT(A) confirmed the additions, the Tribunal found that the assessee was not given adequate opportunity to present its case, especially considering the company was struck off by ROC and a revival petition was pending.
Key Issues
Whether the assessee was provided with adequate opportunity to present its case before the lower authorities, and if additions for unexplained cash credit and undisclosed income were justified.
Sections Cited
147, 148, 142(1), 68, 144, 271(1)(b), 271(1)(c), 271F, 250(6)
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
आयकर अपीलीय अिधकरण, अहमदाबाद "ायपीठ “सी“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD सु"ी सुिच"ा का"ले, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं / Year : 2011-12 Bramvishma Data & Mailing The ITO बनाम/ Services Pvt.Ltd. Ward-1(1)(2) v/s. C/o. Divyang Shah & Co.,CAs Ahmedabad – 380 015 201, 2nd Floor, Devashish Complex Nr. Regenta Central Antarim Hotel, Off. C.G. Road Ahmedabad – 380 009 "थायी लेखा सं./PAN: AACCB 6364 M अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Maulik Kansara, AR Revenue by : Shri Rignesh Das, Sr.DR सुनवाई की तारीख/Date of Hearing : 25 /03/2025 घोषणा की तारीख /Date of Pronouncement: 26 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:
This appeal filed by the assessee is directed against the order dated 24.11.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], under section 250(6) of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] for the Assessment Year (AY) 2011-12 arising from the order of the Bramvishma Data & Mailing Services Pvt.Ltd. Asst. Year : 2011-12 Income Tax officer Ward 1(1)(2), Ahmedabad [hereinafter referred to as “AO”] dated 26.12.2018 passed u/s 144 r.w.s. 147 of the Act.
Condonation of Delay
There is a delay of 19 days in filing the present appeal. The assessee filed a condonation petition along with a sworn affidavit by the Director of the assessee company, Shri Kamlesh Sureshchandra Dave, explaining the reasons for delay. It was submitted that the earlier counsel handling the matter had expired during the COVID period, and the assessee was in the process of appointing a new competent representative. The assessee ultimately appointed new Authorized Representative, who is now representing the assessee before the Tribunal. The delay was due to the time taken in identifying and appointing a suitable counsel.
Considering the reasons stated in the condonation petition and affidavit, and as the delay is marginal and unintentional, and the learned Departmental Representative has not objected to the condonation, we are satisfied that there was reasonable cause for the delay. Accordingly, the delay of 19 days in filing the appeal is condoned and the appeal is admitted for adjudication on merits.
Facts of the Case:
The case of the assessee was reopened under section 147 of the Act as the assessee had not filed its return of income for the AY 2011-12 despite having received contract receipts of Rs.2,89,250/- from M/s. Cameo Bramvishma Data & Mailing Services Pvt.Ltd. Asst. Year : 2011-12 Corporate Services Ltd., Chennai, as reflected in Form 26AS. The case was flagged under the Non-Filers Monitoring System (NMS). Notice under section 148 was issued on 21.03.2018, which was returned unserved with the remark "Left". Thereafter, it was served by affixture on 29.03.2018. Notices under section 142(1) of the Act were issued on 13.08.2018, 04.09.2018 and 11.09.2018, but no response was received. A show-cause notice dated 24.09.2018 was also issued, requiring compliance by 04.10.2018, but no compliance was made.
4.1. On the basis of information available from the bank statement of HDFC Bank A/c No. 00060340018321, it was observed that the assessee had credited Rs.76,08,778/- during the year under consideration. In the absence of any explanation or supporting evidence, the AO treated the said amount as unexplained cash credit under section 68. Further, the contract receipt of Rs.2,89,250/- was also treated as undisclosed income in the absence of return of income and any details submitted by the assessee.
4.2. Accordingly, the total income was assessed at Rs.78,98,030/- by an ex parte order passed under section 144 r.w.s. 147 of the Act dated 26.12.2018. Penalty proceedings under sections 271(1)(b), 271(1)(c) and 271F of the act were also initiated.
Aggrieved, the assessee preferred an appeal before the CIT(A). The assessee challenged the additions on the ground that the amounts represented turnover and business transactions, and that relevant financial statements such as profit & loss account and balance sheet were submitted Bramvishma Data & Mailing Services Pvt.Ltd. Asst. Year : 2011-12 before the CIT(A). The assessee requested that it may be allowed to file ITR in support of its claim.
5.1. The CIT(A) called for a remand report from the AO. The AO reiterated that the assessee failed to file return of income despite several notices, and the additional evidences filed before the CIT(A) were not supported by books of account or details of business activity. It was also noted that at the time of reopening, the assessee company was struck off by the ROC and a petition for revival was pending before the Hon'ble NCLT.
5.2. Relying on some judicial precedents the CIT(A) held that the assessee failed to discharge the onus to explain the cash deposits and contract receipts. The additions were therefore confirmed. Grounds relating to interest and penalty were dismissed as consequential or premature. The appeal was thus dismissed.
Not satisfied with the order of the CIT(A), the assessee has raised the following grounds before us:
Whether, on the facts and in circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs.76,08,778/- as unexplained cash credit under section 68 of the Act? 2. Whether, on the facts and in circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs.2,89,250/- as undisclosed income? 3. Further, the appellant craves leave to add, amend, alter or withdraw all or any ground of appeal.
During the course of hearing before us, the learned Authorized Representative (AR) of the assessee sought time to place on record additional Bramvishma Data & Mailing Services Pvt.Ltd. Asst. Year : 2011-12 evidences in support of the business activity and cash transactions. The AR reiterated that the amounts represented business turnover and not unexplained credits. However, it was observed that despite calling for a remand report, the CIT(A) did not deal with the merits of the evidence filed and summarily confirmed the additions.
7.1. We further note that the assessee company was struck off by the