ECLERX SERVICES LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE2(1)(1) MUMBAI, MUMBAI

ITA 4314/MUM/2025

AI Insights

The case involves Eclerx Services Limited, which appealed against the order of the CIT(Appeals)/NFAC, Delhi, concerning the assessment year 2012-13. The primary issues in the appeal included the improper passing of a rectification order in the name of an erstwhile company, the dismissal of the appeal due to delay without proper hearing, and the non-grant of MAT credit. The Tribunal found that the CIT(Appeals) had erred in dismissing the appeal summarily on the grounds of delay without addressing the merits of the case. The Tribunal noted the procedural lapses and the statutory duty of the CIT(Appeals) to adjudicate the appeal on its merits, regardless of the delay in filing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717026 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 30-06-2025
• Other Referred Cases: Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, CIT Vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HIMANSHU JOSHI
• Assessee Lawyers: SIDDESH CHAUGULE
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Rectification of order

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ मुंबई मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, “E” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.4314/MUM/2025 Ǔनधा[रण वष[ / Assessment Year :2012-13 Eclerx Services Limited Unit No.401, 4th Office Level, Building No.11, Serene Properties Pvt. Ltd. SEZ Mind, Thane, Belapur Road, Airoli, Navi Mumbai, Mumbai-400 708 PAN : AAACE7932L ........अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax, Circle-2(1)(1), Mumbai ……Ĥ×यथȸ / Respondent Assessee by : Shri Siddesh Chaugule, CA Revenue by : Shri Himanshu Joshi, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 18.08.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 20.08.2025 Printed from counselvise.com 2 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 आदेश / ORDER PER ARUN KHODPIA, AM: The present appeal filed by the assessee is directed against the order passed by the Ld. CIT(Appeals)/NFAC, Delhi dated 15.04.2025 for the assessment year 2012-13 as per the following grounds of appeal: “1. Ground No. I-Rectification order passed in name of the erstwhile company is bad in law 1.1. On facts and circumstances of the case and in law, the Assistant Commissioner of Income-tax -Circle 5(1), Chandigarh (‘the learned AO’) erred in passing the rectification order without having legal jurisdiction over the Appellant. 1.2 On the facts and circumstances of the case and in law. the learned AO erred in passing the rectification order in the name of the erstwhile company i.e. Agilyst Consulting Private Limited ('Agilyse) though it was informed to the learned AO that Agilyst had been merged with eClers Services limited pursuant to the order of the Bombay High Court. 2. Ground No. 2-Condonation of delay dismissed without Ovine an opportunity of being heard 2.1. On facts and circumstances of the case and in lass the Hon'ble CIT(A) erred in not condoning the delay s filing of the appeal by the Appellant and dismissing As appeal filed on the grounds that the reasons given by the Appellant As delay in filing of the appeal could not be considered as a sufficient cause. 2.2. On the facts and circumstances of the case and in law the Hon'ble CIT(A) erred in dismissing the appeal without granting it an opportunity of being heard or to justify the bonafide reasons leading to the delay in filing of the appeal. 3. Ground No.3— Non-grant of MAT credit 3.1. Without prejudice to the ohm, and on the facts and circumstances of the case and in law, the Hon.ble CIT(A) erred in upholding the rectification order passed by the learned AO, disallowing the MAT credit of INR 62,76,431. Printed from counselvise.com 3 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 32. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in not adjudicating the matter on merits and allowing MAT credit. The Appellant craves leave to add to, or alter, by deletion, substitution, modification or otherwise or withdraw all or , of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of the appeal.” 2. At the very outset, the Ld. Counsel for the assessee submitted that the Ld. CIT(Appeals)/NFAC has dismissed the appeal in limine on delay itself without giving proper opportunity of hearing to the assessee. In support of his aforesaid contention, the Ld. Counsel has referred to para 2.6 to 2.9 of the Ld. CIT(Appeals)/NFAC order. It was submitted by the Ld. Counsel since the delay in filing of the appeal before the First appellate authority was on account of merger of the assessee company (earlier Agilyst Consulting P Ltd) with eClerx Service Ltd in pursuance of the order of Hon’ble High Court dated 28.08.2016, thereafter the merged entity filed the merger intimation with request to change the jurisdiction for pending assessment. Thereafter assessee obtained opinion to challenge the demand raised vide Assessment order dated 23.11.2016. For such reasons the delay was occasioned in filing the appeal. It is observed that the delay in filing of appeal was for 35 days only, which cannot be treated as extra ordinary delay, also the reasons for delay found to be unintentional and without any malafide conduct on the part of assessee, we thus following the principle of law laid by Hon’ble Apex Court in the case of Vidya Printed from counselvise.com 4 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31.01.2025,that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal, direct the Ld CIT(A) to condone the delay of 35 days involved in filing of appeal before him. 3. Ld Counsel furthersubmitted that one final opportunity may be provided to the assessee so that the assessee can represent its case on merits. 4. The Ld. Sr. DR has fairly conceded that the matter may be adjudicated denovo on merits before the first appellate authority providing one final opportunity to the assessee. 5. We have carefully considered the contents in the documents/material available on record, submissions of both the parties. Accordingly we observe that in the entire spectrum of the present matter,following the principle of natural justice, we deem it fit and proper to provide one final opportunity to the assessee to represent its case on merits before the Ld. CIT(Appeals)/NFAC. Printed from counselvise.com 5 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 6. On a perusal of the order of the Ld.CIT(Appeals)/NFAC, it is observed that the Ld.CIT(Appeals)/NFAC dismissed the appeal of the assessee in limine on account of delay in filing of appeal itself, without dealing with the merits of the case. In our considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of delay itself. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal on account of delay itself. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. PremkumarArjundasLuthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under: \"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. Printed from counselvise.com 6 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 7. Respectfully following the aforesaid order, we set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to his file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC, failing which an appropriate order would be passed in accordance with the mandate of law. Printed from counselvise.com 7 Eclerx Services Limited Vs. DCIT, Circle-2(1)(1), Mumbai ITA No. 4314/MUM/2025 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th August, 2025. Sd/- Sd/- AMIT SHUKLA ARUN KHODPIA (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) मुंबई/Mumbai; Ǒदनांक / Dated : 20th August, 2025. SB, Sr.PS (on Tour) आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. आयकरआयुÈत/The CIT, Mumbai 4. Ĥधानआयकर आयुÈत/ Pr.CIT, Mumbai 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,मुंबईबɅच, मुंबई/DR, ITAT, Mumbai Benches, Mumbai. 6.गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, मुंबई/ ITAT, Mumbai. Printed from counselvise.com "