HOLACHEF HOSPITALITY PRIVATE LIMITED,MUMBAI vs. ACIT, CIRCLE 10(1)(1), MUMBAI
Facts
The assessee filed an appeal before the Tribunal after a delay of 257 days. The assessee had also failed to represent its case before the Assessing Officer and the CIT(A), leading to ex-parte orders. The primary reasons for non-representation were attributed to the company's sale, staff layoffs, and issues with their authorized CA firm.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging the 'sufficient cause' presented by the assessee. While noting the assessee's non-compliance in previous proceedings, the Tribunal decided to give one more opportunity to present the case before the CIT(A) based on the principles of natural justice.
Key Issues
Whether the delay in filing the appeal should be condoned and if the assessee should be granted another opportunity to present its case before the CIT(A).
Sections Cited
144, 250, 115JB, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI B R BASKARAN, AM & MS. KAVITHA RAJAGOPAL, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI B R BASKARAN, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No.4331/Mum/2023 (Assessment Year: 2017-18)
Holachef Hospitality Private Limited ACIT, Circle 10(1)(1) Room No. 209, 2nd Floor, C/o. M/s. G. P. Agrawal & Co., 252A, 2nd Floor, Vijay Tower, Vs. Aayakar Bhavan, M K Road, Shahpur Jat, Delhi-110 049 Mumbai-400 020
PAN/GIR No. AADCH 3662 D (Assessee) (Respondent) :
Assessee by : None Respondent by : Shri Biswamath Das
Date of Hearing : 08.05.2024 Date of Pronouncement : 31.07.2024
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal
Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
It is observed that the appeal is time barred by 257 days for which the assessee has
filed an Affidavit for condoning the said delay. On perusal of the same and on hearing the learned Departmental Representative (ld. DR for short) for the Revenue, we deem it fit to condone the said delay for the reason that the assessee had ‘sufficient cause’ in not filing the appeal within the period of limitation. Delay condoned.
2 ITA No. 4331/Mum/2023 (A.Y.2017-18) Holachef Hospitality Private Limited vs. ACIT 3. The assessee has challenged this appeal on the following grounds:
The assessment u/s. 144 of the Income Tax Act was made as our authorized representative failed to appear without our knowledge. 2. The company filed its return showing loss of Rs.25,51,10,469/- but the assessing officer failed to appreciate it & computed estimated income of Rs.90,78,425/- which is 5% of total turnover of Rs.18,15,68,500/-. 3. The Assessing Officer was wrong in not adjusting carry forward loss of Rs.26,67,42,650/- . 4. The assessment proceeding could not be attended as first notice u/s. 143(2) was 10.08.2018 whereas the assessed company was sold to another company in May 2018 & was under the wrong notion that new owner will look after the affairs of the company. 5. After sale of business in May, 2018 we had to vacate our office and all the staff had been laid off. 6. The non representation is attributable to our authorized CA firm whose maid id is registered in ourcase, who neither did appear nor informed us. 7. Before CIT(A) also the case was not represented by our CA, and we were not communicated about proceeding.
The brief facts are that the assessee company Holachef Hospitality Private was
formed on 26.02.2014 to carry out the business of cloud kitchen under the brand name of
‘Holachef’. Since it was a startup company, it was funded by various venture capitalists
such as Kalaari Capital Partner III LLC, India Quotient 2 SVEL, etc. The assessee had
filed its return of income on 13.10.2017 showing ‘current year loss’ at Rs.25,51,10,469/-
and deemed total income u/s. 115JB of the Act at Rs.(-)265795763/-. The assessee’s case
was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) were issued and
served upon the assessee.
The ld. Assessing Officer ('A.O.' for short) observed that the assessee had showed
turnover of Rs.18,15,68,500/- and other income of Rs.81,95,930/-. The ld. A.O. passed
the assessment order u/s. 144 of the Act on 20.12.2019, determining the total income at
Rs.90,78,425/-.
The assessee was in appeal before the first appellate authority, challenging the
order of the ld. A.O.
3 ITA No. 4331/Mum/2023 (A.Y.2017-18) Holachef Hospitality Private Limited vs. ACIT
The ld. CIT(A) vide an ex parte order upheld the order of the ld. A.O. on the
ground that the assessee has failed to furnish any explanation or supporting documents to
substantiate its claim.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
We have heard the ld. DR and perused the material available on record. It is
observed that the assessee has been non compliant throughout the proceeding before the
first appellate authority and had failed to furnish any explanation along with any
supporting documentary evidence in support of its claim. The ld. CIT(A) has also not
decided the issue on the merits of the case for the above mentioned reason. In view of the
same, we are of the considered opinion that the assessee shall be given one more
opportunity to present its case before the first appellate authority in view of the principles
of natural justice with the direction that the assessee should cooperate with the
proceeding before the ld. CIT(A) without any undue delay.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 31.7.2024.
Sd/- Sd/-
(B R Baskaran) (Kavitha Rajagopal) Accountant Member Judicial Member
Mumbai; Dated : 31.07.2024
Roshani, Sr. PS
4 ITA No. 4331/Mum/2023 (A.Y.2017-18) Holachef Hospitality Private Limited vs. ACIT Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai
