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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), [hereinafter in short “Ld.CIT(A)”], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1056681703(1) dated 30.09.2023 arising out of order passed Under section 143(3) r.w.s. 144B of Income Tax Act, 1961 (in short ‘Act’) dated 25.09.2022 for the A.Y. 2020-21.
At the outset, it is noticed from the appeal record that there is a delay of 127 days in filing the appeal before the Tribunal. Explaining the reasons for belated filing of the appeal, the Ld. Authorised Representative [hereinafter “Ld.AR”] drew our attention to the affidavit filed by the assessee along with a petition seeking for condonation of delay and read out the contents of the petition which is as under: -
“Petition for condonation of delay: - (Delay by 127 days) 1. Assessee company was served with CIT(A) order on dt.30.09.2023, passed u/s 250 of the IT Act. Whereas, the assessee being aggrieved was desirous to file appeal before the Hon'ble ITAT and the appeal was filed on dt:02.04.2024 as against the due date of filing i.e., dt. 28.11.2023, thus causing a delay of 127 days. The reasons and circumstances under which the appeal was filed belatedly are stated here under: 2. Whereas, Shri Narasimhachari (i.e. Authorized signatory (director) of the Coastal Engineering & Equipments (India) Private limited) who attends income tax and GST matters was to go to his counsel's office to sign the appeal papers on dt.27.11.2023 but on the previous day while attending function in his relative's house, while getting down on the steps from the first floor, slipped and fell down fracturing his right ancle and hair line fracture to right hand wrist. Immediately got the medical treatment and was advised for bed rest. In this process going to counsel's office for signing the appeal papers slipped out of assessee mind. Whereas on 28th March 2024, received a phone call from the income tax office for payment of taxes and then realized that appeal was not filed. Accordingly, approached the counsel requesting to prepare the documents which was done on 1st April 2024 and the appeal was filed on 2nd April 2024 causing a delay of 127 days.
Page No. 2 Coastal Engineering & Equipments (India) Private Limited 3 In light of the above, it is respectfully submitted that this delay in filing the appeal belatedly was not as a result of any negligence or lack of diligence, but solely due to the unfortunate and unforeseen circumstances surrounding my health. Doctor's certificate in support of petition is attached herewith.
4. I understand the importance of adhering to statutory timelines and sincerely apologize for this delay. 5 I humbly pray the Honorable Bench for favorable consideration of this delay.”
On perusal of the contents of the affidavit filed by the assessee and medical records as well as the submission of the Ld. AR, we found that the assessee is prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 127 days. Therefore, we hereby condone the delay of 127 days in filing the appeal before the Tribunal.
Briefly stated facts of the case are that, assessee is a company filed its return of income on 27.01.2021 declaring total income of Rs.20,87,480/-. The case of the assessee was selected for scrutiny with the reason "Change in method of Accounting". During the course of assessment proceedings, the assessee has filed its reply on the above said issue. However, two other issues were found during the course of assessee i.e. increase in share capital and expenses debited in profit & loss account being related to fee paid to ROC against increase in authorized share capital. Subsequently, statutory notices under section 143(2) and 142(1) of the Act, were issued and served upon the assessee seeking relevant information/documents. However, the assessee could not file any reply for the Page No. 3 Coastal Engineering & Equipments (India) Private Limited notices issued by the Revenue Authorities. Thereafter the assessment under section 143(3) r.w.s. 144B of the Act was completed by the Assessing Officer by assessing the income of the assessee at Rs.66,57,480/- after making addition of Rs.44,50,000/- as unexplained credit under section 68 of the Act and Rs.1,20,000/- as variation in respect of disallowance of ROC expenses.
On being aggrieved, assessee preferred an appeal before Ld. CIT(A) but the assessee even after receipt of the hearing notices on various dates did not file any supporting documents on its contentions as per the grounds of appeal raised by the assessee. Therefore, the Ld. CIT(A) disposed off this appeal based on the merits available on record.
On being aggrieved, assessee preferred an appeal before the Tribunal and raised following grounds of appeal: -
1. The orders passed under section 143(3) of the IT Act dt.25.09.2022, upheld by the Ld. CIT(A) NFAC ("in short CIT(A)") vide orders passed u/s 250 of the IT Act dt. 30.09.2023 are contested by the appellant on the grounds that they are contrary to the facts of the case and provisions of law.
2. The Ld. CIT(A) is not correct in disposing of this appeal ex- parte and in this process failed to give reasonable opportunity to present the case of the assessee company thus violated the principals of natural justice.
3. The Ld. CIT(A) erred in confirming the addition of Rs.44.50 lakhs, received towards share capital, despite the appellant
Page No. 4 Coastal Engineering & Equipments (India) Private Limited substantiating the receipt of funds with ample evidence and demonstrating the financial worthiness of the investors.
4. Furthermore, the Ld. CIT(A) erroneously approved the assessing officer's action of making additions of the share capital amount u/s 68 of the IT Act, since, appellant has duly discharged its burden of proof by providing cogent evidence of the genuineness of the transactions and the creditworthiness of the investors.
5. In light of the above, the appellant humbly prays for the quashing of the impugned orders passed by the CIT(A) and the deletion of the additions made therein.”
At the outset, Ld. AR submitted that Ld.CIT(A) passed exparte order without providing adequate opportunity of being heard to the assessee, therefore, considering additions/disallowance made by the Assessing Officer, Ld.AR pleaded that the matter may be remitted back to the file of the Ld. CIT(A).
On the other hand, Ld. Departmental Representative [hereinafter in short “Ld. DR”] relied on the order of the Ld.CIT(A) and submitted that assessee has not utilized the opportunity provided by Ld.CIT(A). Therefore, the order passed by Ld. CIT(A) is exparte order and she pleaded to confirm the orders passed by the Revenue Authorities.
We have heard both the sides and perused the material available on record. On a perusal of the assessment order as well as Ld.CIT(A) order, it is observed that even though the Assessing Officer as well as Ld.CIT(A) provided opportunity on several occasions, assessee could not appear nor complied to the Page No. 5 Coastal Engineering & Equipments (India) Private Limited notices issued. Considering the submissions of the Ld. AR and totality of facts and keeping in view the additions / disallowance made by the Assessing Officer, we are of the opinion that assessee should be given one more opportunity of being heard. Therefore, considering the facts and circumstances of the case and in order to meet the principles of natural justice, we are of the view that it is a fit case to remit the matter back to the file of the Ld. CIT(A) for fresh consideration and the assessee is directed to cooperate with the proceedings before the Ld. CIT(A) and in turn Ld. CIT(A) call for remand report, if necessary, and dispose off the case on merits. Therefore, the grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 06th September, 2024.