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Facts
The assessee's appeal was dismissed ex-parte by the NFAC. The assessee sought condonation of delay in filing the appeal before the Tribunal due to a delay of 357 days. The Assessing Officer had reopened the assessment under Section 147 and added Rs. 3,18,19,796/- as unexplained investment.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging that the assessee was prevented by sufficient cause. The Tribunal set aside the ex-parte order of the Ld. CIT(A) and restored the matter for fresh adjudication after affording the assessee a reasonable opportunity of being heard.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the ex-parte order of the CIT(A) should be set aside for fresh adjudication.
Sections Cited
147, 144B, 5, 148, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, G: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI BRAJESH KUMAR SINGH
This appeal by the Assessee is directed against the order of the National Faceless Appeal Centre, Delhi, [hereinafter referred to as the ‘Ld. CIT(A)] dated 14.06.2024 pertaining to Assessment Year (A.Y.) 2016-17, arising out of Assessment order dated 25.03.2022 under Section 147 r.w.s. 144B of the Income-tax Act,
ITA No.- 4075/Del/2025 Cryptographic IT Solu�ons Pvt. Ltd. 1961(hereinafter referred to as ‘the Act’) passed the Ld. Assessing Officer (‘Ld. AO’, for short).
During the course of hearing, none appeared on behalf of the assessee, nor was any application for adjournment placed on record. Therefore, the case is being heard after hearing the Revenue and on the basis of material available on record.
There is a delay of 357 days in filing of the appeal before Tribunal. In this regard, the Director of the company has filed an affidavit for condonation of the delay and the relevant extracts of the same are, as under:
“In the matter of Mis Cryptographic IT Solutions Private Limited for the Assessment Year 2016-17. I Sunny Vashisht, director of Mis Cryptographic IT Solutions Private Limited having office at 2/61, Bhim Street, Vishwas Nagar, Shahdara, New Delhi 110032, India do hereby solemnly affirm & state as follow-
1. 1. That, the Company is an Information Technology Company and engaged in providing software support services to its overseas Clients. The main activity of the Company is to export Software and IT related Technical of services.
2. That NFAC adjudicated my appeal ex-parte vide order dated 14th June, 2024 (received on 15th June, 2024, the fact of which i was unaware of as the entire proceeding was conducted online and in a faceless manner and due to mis communication at the part of my Income Tax Consultant.
3. That recently upon receiving notices proposing levy of penalty for the impugned AY. I became aware that my appeal has been dismissed by NFAC.
4. I immediately sought legal opinion on the same and have accordingly preferred the present appeal before the Hon'ble ITAT.
5. I am not well-versed in the legal procedures and technicalities of the Income Tax Act. 1961 for filing appeal before ITAT. After appointment of new tax consultant, I am filing this appeal before your goodself.
ITA No.- 4075/Del/2025 Cryptographic IT Solu�ons Pvt. Ltd.
6. That in this way there is a delay of 357 days for which an application under Section 5 of the Limitation Act has been filed along with memorandum of appeal.
That the impugned appeal is thus delayed on account of the reasons mentioned hereinabove which constitute reasonable cause and the delay cannot be deemed to be wilful nor unreasonable. The delay deserves to be condoned and the appeal deserves to be admitted and heard in the interest of justice.
I submit that I have not benefitted in any way from the delayed filing of the appeal and that irreparable loss will be caused to me if the delay is not condoned and the appeal is not admitted.
That I had no intention to jeopardize the interest of the revenue by delaying the filing of the appeal.
10. No hardship or prejudice will be caused to the revenue in case the delay is condoned and the appeal is admitted, however if the delay is not condoned and the appeal is not admitted, I will suffer substantially and irreparable loss will be caused.
In light of the above facts and in the interest of natural justice I pray before your honours to kindly condone the delay in filing of the appeal and admit the appeal and hear the appeal on merits in the interest of natural justice.”
3.1 On due consideration of the contents of the affidavit and the submissions made, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. The delay in filing the appeal is therefore condoned, and we admit this appeal for adjudication.
Brief facts of the case are: The assessment in this case was reopened by issuing notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide notice dated 31.03.2021. In this case, the information for re-opening of the case was as under:
From the bank account details of the assessee, it was seen that amount totaling to Rs.24,84,90,549/- was credited to the bank accounts of the assessee during 3
ITA No.- 4075/Del/2025 Cryptographic IT Solu�ons Pvt. Ltd. F.Y. 2015-16. Since, the assessee has not complied to any notice issued by the Investigation Wing, it is clear that the amount so credited in the bank account of the assessee was held to be unexplained.
During assessment proceedings, the assessee explained about explanation of the said credit entries in the bank as per the tabular chart at page no. 3 of the assessment order.
The AO noted that it was clear that Rs. 24,84,90,549/- was credited in the aforesaid bank account of the assessee and from ITR for the AY. 2016-17, it was evident that the assessee had shown gross receipts of Rs.21,66,70,753/- and the assessee had failed to disclose excess credits of Rs. 3,18,19,796/- (Rs.24,84,90,549 - Rs.21,66,70,753) before the revenue during the AY under consideration. Accordingly, the AO added sum of Rs. 3,18,19,796/- as unexplained investment u/s 69 of the Act.
7. Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee ex parte, as according to the Ld. CIT(A), the assessee did not appear in response to five notices of hearings as per details in para 3 of his order.
ITA No.- 4075/Del/2025 Cryptographic IT Solu�ons Pvt. Ltd. 8. Aggrieved with the said order, the assessee before us on the following grounds of appeal:
“ 1. On the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, has erred in law and on facts by dismissing the appeal ex parte without adjudicating the same on merits. Such action is wholly unlawful, unwarranted, and unjustified. It is based on a misconception of law and facts and is in gross violation of the principles of natural justice. Consequently, the impugned order is liable to be set aside, and the appeal under reference deserves to be admitted and adjudicated afresh on its factual and legal merits.
2. That having regard to the facts and circumstances of the case, the lower authorities have erred in law and on facts in in framing the impugned appeal order u/s 147/14411 without assuming jurisdiction as per law and thus Ld. CIT(A) ought to have quashed the impugned proceedings inter alia on the following grounds:
That "reason" has been recorded without independent application of mind, That no valid approval/sanction of the higher authority has been obtained in accordance with law.
3. That having regard to the facts and circumstances of the case, the lower authorities have erred in law and on facts in making aggregate addition of Rs.3,18,19,796/- u/s 69 on unexplained investment made mentioned in the assessment order and that too by recording incorrect facts and findings and without granting opportunity of cross examination and without providing the entire adverse material on records and without observing the principles of natural justice and disregarding the submission, evidence and material placed on record by the assessee.
4. That on the facts and in the circumstances of the case and in law, the lower authorities have erred in confirming /making impugned additions of Rs. 3,18,19,796/-u/s 69 in most mechanical and arbitrary manner, which are unlawful imaginary, unwarranted, absolutely without any basis, perverse and based on mere surmises suppositions and conjectures and that various observations made by hunt in order are either incorrect, irrelevant Off untenable and thus impugned under liable to be quashed and returned income deserves to be accepted.
5. That the appellant craves the leave to add, manlily, amend OR DELETE: any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”
8.1 The Sr. DR supported the order of the lower authorities.
ITA No.- 4075/Del/2025 Cryptographic IT Solu�ons Pvt. Ltd.
9. We have heard Ld. Sr. DR and perused the material available on record. The appeal of the assessee has been decided ex parte by the Ld. CIT(A). Therefore, in the interest of justice, and to allow one more opportunity to the assessee, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the Ld. CIT(A) for fresh adjudication after affording reasonable opportunity of being heard to the assessee. Further, the assessee will be at liberty to fille any supporting details / evidence / explanation in support of its claim.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30th October, 2025.