CANDID INDUSTRIES LIMITED,HYDERABAD vs. DCIT., CIRCLE-1(1), HYDERABAD

At the outset it is seen that in all these appeals, there is a delay of 77 days in filing of these appeals for which the assessee has filed a condonation petition along with affidavit explaining the reasons for such delay. After considering the contents of the condonation petitions and after hearing the learned DR, the delay of 77 days in filing of these appeals is condoned and the appeals are admitted for adjudication. ITA 86/Hyd/2024 – A.Y 2016-17 2. The assessee has raised the following grounds:

Facts of the case, in brief, the assessee company, is engaged in the business of Manufacture of wearing apparel. The Assessee company has not fled return of income since there is no taxable income for the A.Y under consideration. Later the case of the assessee was re-opened for scrutiny assessment for the A.Y 2013-14 under the provisions of section 147 r.w.s 144 of the Act. Subsequently notice u/s 148 of the act were dt.30.03.2021 also notices u/s 142(1) of the Act were issued on 24.11.2021 to the assessee for which the assessee could not respond as the assessee was new to the scheme of faceless assessment and due to difficulty in arranging documents & due to technical glitches faced in submitting response assessee was unable to provide its response to notices issued by NFAC. Subsequently the A.O without having any bonafde belief that the assessees income has escaped assessment and without providing proper opportunity of being heard and without considering facts and circumstances of the case has passed an erroneous Assessment Order u/s 147 r.w.s 144 r.w.s 144B dt. 26.03.2022 by assessing the total income of the assessee at Rs.2,39,91,880/- and by raising a demand of Rs. 2,39,75,090/- by making the addition Rs.1,02,16,760/- towards unexplained cash credit u/s 68 of the Act, Addition of Rs. 60,00,000/- towards time deposit u/s 69A of the Act, Addition of Rs. 8,50,000/- towards rent as unexplained income u/s 69A of the Act Addition of Rs. 69,25,115/- towards unexplained income of sale or purchase of vehicles u/s 69A of the Act. Aggrieved by the aforesaid order, the assessee has preferred an appeal dated 06.10.2022 and the ITAT has remanded back matter to the file of the Assessing Officer for fresh adjudication vide order dated 28.12.2023 and the A.O has passed an order u/s 271(1)(c) of the Act on 28.09.2022 by imposing a penalty of Rs.77,84,165/- . In view of the above and aggrieved by the order u/s 271(1)(c) of the Act, the assessee preferred this appeal before the Tribunal.

Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal.

5. The learned AR drew our attention to Para 14 of the order of learned CIT (A) NFAC which is to the following effect:

At the outset, the learned AR submitted that the Tribunal vide its order dated 28.12.2023 remanded back the matter to the file of the Assessing Officer in the quantum appeal and therefore, the penalty which is an offshoot of the quantum proceedings are also required to be set aside to the file of the Assessing Officer.

The learned DR has no objection if the matter is sent back to the file of the Assessing Officer for deciding the penalty afresh along with the quantum assessment.

We have heard the rival arguments made by both the sides and perused the material available on record. We find the Tribunal vide order dated 28.12.2023 has remanded back the matter to the file of the Assessing Officer for the A.Y 2013-14 and 20161-17therefore, we deem it proper to remand back this penalty appeals which are sequel to the assessment order back to the file of the Assessing Officer with a direction to decide afresh after affording due opportunity of being heard to the assessee. In the light of the above, appeal of the assessee is allowed for statistical purposes.

In the result, appeal filed by the assessee for the A.Ys 2013-14 and 2016-17 are allowed for statistical purposes. Order pronounced in the Open Court on 20th March, 2024. Sd/- Sd/- (R.K. PANDA) (LALIET KUMAR) VICE-PRESIDENT JUDICIAL MEMBER Hyderabad, dated 20th March, 2024 Vinodan/SPS Copy to: S.No Addresses 1 Candid Industries Ltd C/o P Murali Mohan & Co. CAs, 6-3-655/2/3, Somajiguda, Hyderabad 500082 2 Dy. CIT, Circle 1(1) Hyderabad 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File