RSVCPL-ALAM (JV),HYDERABAD vs. DCIT., CIRCLE-6(1), HYDERABAD

by the assessee reads as under : “1.The order of the Additional / Joint / Deputy / Assistant Commissioner of Income Tax/Income-tax Officer, National e-Assessment Centre (“Learned AO”) and the Learned Commissioner of Income Tax (Appeals) (“Learned CIT(A)”) is totally contrary to the facts and evidence on record and therefore unsustainable both on facts and in law.

The Learned AO failed to consider that the Appellant had separate agreements for the parties forming the Joint Venture for execution of the contracts. 5. The Learned AO erred in estimating the Appellant’s profit at 4.97% merely because the work was subcontracted to the one of the parties forming part of the Joint Venture. 6.Any other ground(s) that may be urged at the time of hearing.”

The facts of the case as culled out from the records are that the assessee is a Joint Venture formed between M/s RSV Constructions Pvt. Ltd. and M/s Alam Constructions, for the purpose of executing certain work contracts awarded by the South Central Railway. The assessee filed its Return of Income for the A.Y. 2018- 19, in the status of AOP, on 31.10.2018 declaring total income of Rs. 17,33,360/-. The case of the assessee was selected for complete scrutiny under CASS for verification of contract receipts and claim of refund. Statutory notices u/s 143(2) and 142(1) of the income tax Act,1961 (“the Act”) were issued on various dates, which were duly complied. The learned assessing officer (“Ld. AO”), after considering the submissions made by the assessee , held that the appellant was assessable for Net Profit at the rate of 4.97 percent of the Gross Contract Receipts of Rs. 16.69 Crore. Accordingly, assessment was completed u/s 143(3) read with section 144B of the Act on 12.05.2021, determining total income at Rs.82,96,138/-; after making addition of Rs. 65,62,778/- on account of Net Profit rate.

Feeling aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before us, contending that the Ld.CIT(A) erred in not condoning the delay in filing the appeal and dismissed the appeal without appreciating the merits of the case. The Ld. AR submitted that the appeal before Ld. CIT(A) could not be filed in time due to Covid’19 pandemic. The same reasons were also brought to the notice of the Ld. CIT(A). However, without considering the reasons given for delay, the Ld. CIT(A) did not condone the delay. Hence the Ld.AR requested before the Bench to condone the delay in filing the appeal before the Ld. CIT(A) and to issue a direction to the Ld. CIT(A) to decide the appeal on merits.

Per contra, the Ld. DR placed heavy reliance on the order of the authorities below and opposed the grant of further opportunity to the assessee.

We have heard the rival submissions and also gone through the records in the light of the submissions made on either side. The Ld. AR submitted that the appeals before Ld.CIT(A) could not be filed in time due to Covid’19 pandemic. Considering the reasons submitted by the assessee, we are of the considered view that there was reasonable cause for the assessee to file the appeal with delay before Ld. CIT(A). Further considering the principle of natural justice, the highest that would happen by allowing an opportunity to the assessee is that a cause would be decided on merits. With this view of the matter, we are of the view that fresh opportunity could be given to the assessee. Accordingly, we condone the delay, set aside the impugned order and restore the issue to the file of Ld. CIT(A) to pass a fresh order on merits. Needless to say that the Ld. CIT(A) will afford an opportunity of hearing to the assessee before passing such order. The grounds of appeal