DEVGANGA CONTRACTORS PVT LTD,MUMBAI V. AO CIRCLE 4(2)(1), MUMBAI

ITA 6557/MUM/2024

AI Insights

The case involves Devganga Contractors Pvt. Ltd., which appealed against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi. The appeal was related to the assessment year 2020-21, where the AO made additions and disallowances to the assessee's income. The primary contention was the lack of sufficient opportunity provided to the assessee to present their case, which was claimed to be a violation of natural justice. The Tribunal found that the assessee was not given adequate time to respond to the show cause notice and that the e-submission portal was closed prematurely, preventing the submission of necessary documents. Consequently, the Tribunal remanded the case back to the AO for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633402 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: SUHANI MAHARWAL
• Keywords: Set aside; Reasonable cause; Principle of natural justice
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No. 6557/Mum/2024 Assessment Year : 2020-21 Devganga Contractors Pvt. Ltd., B-103, Malad East, Mumbai-400097. PAN : AACCD2132K vs. AO, Circle-4(2)(1), Aayakar Bhavan, Mumbai-400020. (Appellant) (Respondent) For Assessee : Ms. Suhani Maharwal For Revenue : Shri Annavaram Kosuri Date of Hearing : 11-06-2025 Date of Pronouncement : 13-06-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 27-08-2024, pertaining to Assessment Year (AY) 2020-21, wherein the assessee has taken the following grounds of appeal: “Ground 1: On the facts and in the circumstances of the case as well as law, the order of AO was passed without affording sufficient opportunity of 2 ITA No. 6557/Mum/2024 being heard which is contrary to the natural justice without acquiring proper justification and liable to be set aside. Ground 2: On the facts and in the circumstances of the case as well as law the AO erred in making addition of Rs. 2600000/- u/s 68 of 1.T. Act, 1961 without affording reasonable time to assessee which is unjustified and liable to be quashed. Ground 3: On the facts and in the circumstances of the case as well as law the AO erred in making disallowance of Rs. 3720647/- on assumption and presumption, without any evidence which is grossly justify and liable to be deleted.” 2. At the outset, it is noted that there is a delay of ten days in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the facts placed on record, we find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication. 3. Briefly, the facts of the case are that in this case, the assessment was completed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 („the Act‟) wherein the AO determined the assessed income at Rs. 78,38,600/- by making addition to the returned income of Rs. 26 lakhs u/s. 68 of the Act, disallowance of expenses amounting to Rs. 37,20,647/- and income tax expenses amounting to Rs. 4,92,833/-. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), challenging the addition of Rs. 26 lakhs u/s. 68 of the Act as well as the addition of Rs. 37,20,647/- on account of various expenses. However, in absence of any submissions filed by the assessee, the Ld.CIT(A) passed an ex-parte order sustaining the findings of the AO. 4. During the course of hearing, the Ld.AR submitted that the AO has not given sufficient opportunity to the assessee and has made the subject addition. In this regard, it was submitted that a show cause notice was 3 ITA No. 6557/Mum/2024 issued to the assessee on evening of 29th March, 2022 calling for the response by the next date i.e., 30th March, 2022. It was further submitted that even the e-submission portal was closed before the scheduled time on 30-03-2022 and thereafter the assessee made on-line request through „Grievance Portal‟ to open the same. However, the e-submission portal was not opened and the assessee was thus prevented from filing necessary submissions. It was further submitted that even before the Ld.CIT(A), the assessee could not file necessary submissions and the order has been passed ex-parte. It was accordingly submitted that the assessee be granted one more opportunity and the matter may be remanded back to the file of the AO to allow the assessee to file the necessary submissions and basis the same, the AO can decide on the merits of the case. 5. Per contra, the Ld. DR is heard, who has relied on the order passed by the lower authorities. 6. After hearing both the parties and perusing the material available on record, we find that the assessee has not been granted appropriate opportunity to respond to the proposed additions sought to be made by the AO. The assessee has been granted only a day‟s time to respond to the show cause notice and by the time, the assessee could respond, e-filing portal was closed which prevented the assessee from filing the submissions. Further, it doesn‟t seems to a case where the matter was getting time-barred as the AO finally passed the assessment order on 06- 09-2022 and, therefore, the assessee‟s prayer for opening the e-submission portal could have been addressed. In light of the same, we believe that the assessee deserves one more opportunity and the matter is accordingly set aside to the file of the AO to examine the matter afresh, after taking into 4 ITA No. 6557/Mum/2024 consideration the submissions sought to be filed by the assessee and after providing reasonable opportunity to the assessee. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 13-06-2025 Sd/- Sd/- [ANIKESH BANERJEE] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 13-06-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "