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Facts
The assessee, Vidvata Interview Pvt. Ltd., engaged in dealership of Volkswagen Automobiles, filed a return declaring a loss. The case was selected for scrutiny, and the Assessing Officer (AO) passed an ex-parte assessment order making additions. The National Faceless Appeal Centre (NFAC) dismissed the assessee's appeal due to delay without condoning it.
Held
The Tribunal held that the NFAC erred in dismissing the appeal on a technicality without considering the merits, especially since the AO had passed an ex-parte order. The Tribunal restored the matter to the AO to grant the assessee a final opportunity to present its case.
Key Issues
Whether the NFAC was justified in dismissing the appeal on grounds of limitation without condoning the delay, and whether the matter should be restored to the AO for a fresh assessment.
Sections Cited
144, 250, 249(2), 145(3), 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”, DELHI
Before: SH. S. RIFAUR RAHMAN & SH. SUDHIR KUMAR
Date of hearing: 14/08/2025 Date of Pronouncement: 27/08/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre Delhi [hereinafter referred to as “NFAC”] vide order dated 26.12.2024 pertaining to A.Y. 2015-16 arising out the assessment order dated 27.11.2017 under section 144 of the Income Tax Act, 1961, (in short ‘the Act’).
The assessee has raised following grounds of appeal :-
1. For that the National Faceless Appeal Centre (NFAC), Delhi, ['the NFAC'] erred on facts and in law in dismissing the appeal filed by the appellant, on limitation without condoning the delay in filing the appeal, vide order passed under section 250 of the Income Tax Act, 1961, ('the Act'), dated 26-12-2024.
2. For that the NFAC erred in failing to appreciate that the assessee was prevented from reasonable cause in filing the appeal within the time prescribed in section 249(2) of the Act, which is wrong illegal and unjustified in the facts and circumstances of the case.
3. For that the dismissal of the appeal by NFAC has resulted into confirming the action of the Assistant Commissioner of Income Tax, Circle 1(1) Gurgaon, ('the AO'), assessing the appellant under section 144 of the Act, at an income of Rs 2,32,88,844/- against the returned loss of (-) Rs. 15,41,232/-, vide order dated 27-11-2017, after making additions as detailed under; Sl. Particulars Amount (Rs.) Amount (Rs.) No. i. Returned loss (-) 1541232 ii. Additions Made 10851975 a. Net Profit estimated 10851975 @ 8% of the Gross Receipts. b. Other income 13978101 24830076 returned by the assessee as per Part- A of P & L of ITR has separately been added. iii. Net assessed income (i 23288844 + ii)
4. For that the learned NFAC has erred in the facts and circumstances of the case in confirming the action of the AO in estimating the net profit of the assessee @ 8% of the gross sales without following the principles of consistency resulting into making addition of Rs 1,08,51,975/-, which is wrong, illegal and unjustified.
5. For that the learned NFAC has erred in the facts and circumstances of the case in confirming the action of the AO in estimating the income of the assessee without invoking the provisions of section 145(3) of the Act, which is wrong, illegal and unjustified.
6. For that the learned NFAC has erred in the facts and circumstances of the case in confirming the action of the AO in separately making addition of Rs 1,39,78,101/- the Other Income returned by the assessee in Part A-P/L of the return of income, which is wrong, illegal and unjustified. 7. That the whole order passed by the NFAC is bad in facts and law. That the appellant craves leave to add, alter, amend, or vary the above grounds of appeal at or before the time of hearing.
The brief facts of the case are that the assessee a company limited shares incorporated under the Companies Act, 1956 in inter-alia engaged in carrying on the business of dealership of Volkswagen Automobiles, with its principal place of business at Patna in the State of Bihar.
The Principal promoter of the assessee Company Sh. Parthsarthi Kumar was Non-Resident Indian, as such, the Company was registered at a temporary address at New Delhi, but the business operations were never carried on at the said address. The business operations were always carried on at Didgarganj, Patna. Subsequently, due to heavy loss the business operation was seized from the assessment year 2017- 18 and the income of the assessee is from renting out of the business premises. Therefore, the present address of the assessee for correspondence is the Directors residence at Mumbai. The assessee has filed the return of income on 29-09- 2015 declaring a loss of Rs. 15,41,232/-. The case was selected for complete scrutiny under CASS. Statuary notice dated 12-04- 2016 u/s 143(2) of the Act was issued. Further various notices were issued to the assessee but assess failed to comply the notice. The Assessing officer completed the assessment order after making the additions on the various heads.
Aggrieved by the order of the Assessing Officer, the assessee filed the appeal before ld. NFAC. The Ld. NFAC dismissed the appeal of the assessee without condoning the delay and upheld the order of the AO in absence of any supporting evidences submitted by the assessee.
Aggrieved by the order of the Ld. NFAC, the assessee is in appeal before us.
The AR submitted that the Ld. NFAC dismissed the appeal of the assessee without going into the ground of the delay. The assessee has given a sufficient cause for not to filing the appeal within time. He further submitted that assessee has no knowledge about the assessment order and came to know about the passing assessment order as well as penalty order immediately, send a letter to the assessee officer on 22.01.2019. The Ld. NFAC should have condoned the delay and appeal be heard on merit. The ld. AR has also submitted that the assessee company director was non residence of India and company was registered a temporary address at New Delhi but the business operations was never carried on at the said address. The business operations were carried on at Didarganj, Patna. The assessee not issued any communication and the AO passed the exparte assessment without being heard the assessee.
The Ld. DR has submitted that the assessee has never informed the AO regarding change of address of the company. He relied upon the orders of the lower authorities. 9. We have heard the rival contentions and perused the material available on record. Perusal of the order of the Ld. AO reveals that the notices were issued by the Registered post on the given address of the assessee but none present before the AO and the exparte assessment order passed by the AO. Against the order of the AO the assessee filed the appeal before the Ld. NFAC who dismissed the appeal on the technical point by not condoning the delay of 1208 days. The assessee has shown the sufficient cause not filing the appeal within time. The Ld. NFAC should have condoned the delay and should have decided the appeal on the merit because in this appeal the Ld. AO passed the exparte order. In the facts and circumstances of the case we deem it fit to restore the matter back to the file of Assessing officer with a direction to grant one final opportunity to the assessee to substantive its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Assessing Officer and co- operate in the proceedings. The grounds raised
by the assessee are accordingly allowed for statistical purposes.
10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27.08.2025.