GARUDA CONSTRUCTION AND ENGINEERING LIMITED,MUMBAI, MAHARASHTRA V. DCIT, AAYKAR BHAVAN

ITA 3253/MUM/2025

AI Insights

The case involves Garuda Construction And Engineering Limited appealing against an order from the NFAC, Delhi, for the assessment year 2018-19. The appeal was initially delayed due to the unavailability of the designated signatory to sign the appeal form, which was attributed to unavoidable circumstances. The Tribunal found sufficient cause for the delay and condoned it. The main issues in the appeal included the addition of Delhi VAT under section 43B(a) of the Income Tax Act, 1961, and disallowances related to purchases and labor charges due to non-submission of confirmations from suppliers and vendors, which the appellant argued was due to the COVID-19 lockdown. The Tribunal noted that the order from NFAC was passed ex-parte as the notices were not received by the assessee due to a change in the email address of their consultant. Consequently, the Tribunal directed the case to be remitted back to the CIT(A) for a decision on merits after hearing the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706829 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Appeal Filed On: 07-05-2025
• Other Referred Cases: Collector Land Acquisition Vs. Mst. Katiji & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA
• Assessee Lawyers: ANIRUDH DAVE
• Keywords: Opportunity of being heard; Reasonable cause; Principle of natural justice
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI GIRISH AGRAWAL (ACCOUNTANT MEMBER) I.T.A. No. 3253/Mum/2025 Assessment Year: 2018-19 Garuda Construction And Engineering Limited Shop No.13 Nidhivan Chsl Plot No.166, Upper Govind Nagar, Malad East S.O, Mumbai -400097 PAN:AADCG9556D Vs. DCIT Circle-4(2)(1) Mumbai Aayakr Bhavan, Maharshi Karve Road, New Marinelines, Churchgate Mumbai-400020 (Appellant) (Respondent) Appellant by Shri Anirudh Dave Respondent by Shri Arun Kanti Datta, CIT D.R. Date of Hearing 01.07.2025 Date of Pronouncement 08.07.2025 ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 14/02/2025 passed by NFAC, Delhi for assessment year 2018-19 on following grounds of appeal : “1.0 That on the facts and in the circumstances of the case, the impugned order u/s 143(3) passed by the A.O. is grossly 2 ITA No.3253/Mum/2025; A.Y. 2018-19 Garuda Construction And Engineering Limited erroneous, unjustified and bad in law and violates the principles of natural justice and is therefore liable to be quashed. 2.0 That on facts and in the circumstances of the case, the A.O. grossly erred in adding the sum of Delhi VAT amounting to 23,14,103/- u/s 43B(a) of the Income Tax Act, 1961 due to non- payment of the same on or before the due date of furnishing the return of income of the previous year u/s 139(1), without giving the assessee an opportunity of being heard. 3.0 That on facts and in the circumstances of the case, the A.O. grossly erred in disallowing '10% of Purchases' amounting to 8,75,29,987/- ignoring the fact that the appellant Company was not able to produce confirmation from suppliers owing to the Covid- 19 related lock down being in place across the nation. Further, the AO was not able to provide the names of the suppliers from the appellant Company had made purchases, but they had not filed their returns even after repeated requesting for the same. 4.0 That on facts and in the circumstances of the case, the A.O. grossly erred in disallowing '10% of labour and work contract charges' amounting to 1,55,80,064/- ignoring the fact that the appellant Company was not able to produce confirmation from vendors owing to the Covid-19 related lock down being in place across the nation. Further, the AO was not able to provide the names of the vendors from the appellant Company had made purchases, but they had not filed their returns even after repeated requesting for the same. 5.0 That the appellant craves leave, to add, to amend, to modify, to rescind, supplement or alter any other grounds stated here-in- above, either before or at the time of hearing of this appeal.” 2. At the outset the Ld.DR submitted that, present appeal is filed with a delay of 7 days before this Tribunal. 2.1 The Ld.AR submitted that, the impugned order was received by the assessee on the Income Tax Portal as well as on the registered email ID of the assessee's account manager. As per the standard practice followed by the assessee, the said order was promptly forwarded to the Authorised Representative, who was routinely entrusted with handling the assessee's income tax 3 ITA No.3253/Mum/2025; A.Y. 2018-19 Garuda Construction And Engineering Limited matters. The draft appeal in Form No. 36 was duly prepared, and the applicable appeal fees were paid on 30-05-2025. However, the designated signatory to Form 36 was out of town as on that date. Due to the unavailability, the appeal could not be signed and filed within the stipulated time. 2.2 The Ld.AR emphasised that the delay was caused inadvertently due to unavoidable circumstances and therefore cannot be attributable to any malafide intention on behalf of the assessee. 2.3 On the contrary, the Ld. DR though could not controvert the submissions of the Ld.AR, relied on the orders passed by the authorities below. We have perused the submissions advanced by both sides in light of records placed before us. 3. In our view, the assessee made out the reasonable cause for the delay that led to filing the present appeals before this Tribunal belatedly. Nothing to establish any contrary intention is brought on record by the revenue before this Tribunal. In our opinion there is sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions. 3.1 We place reliance on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:- “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to 4 ITA No.3253/Mum/2025; A.Y. 2018-19 Garuda Construction And Engineering Limited parties by disposing of matters on de merits\". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that : 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” 3.2 Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, we find it fit to condone the delay caused in filing the present appeals as it is not attributable to the assessee. Accordingly the delay in filing the present appeal before this Tribunal stands condoned. 4. On the merits of the issue the Ld.AR submitted that, the order passed by the NFAC, Delhi is an ex-parte order. 4.1 He submitted that, during the course of filing of appeal against the assessment order in Form 35 email ID mentioned was [e-mail]. The Ld.AR submitted that, this mail id 5 ITA No.3253/Mum/2025; A.Y. 2018-19 Garuda Construction And Engineering Limited belonged to the consultants who left the assessee and was no longer employed at the time of when appellate proceedings started. As a result, the notices issued by the Ld.CIT(A) were not received by the assessee that led to passing of ex-parte order. The Ld.AR thus prayed that assessee may be granted with an opportunity of being heard and that the assessee has now updated the email Id on the e-filing portal which is correct and active. 4.2 On the contrary, the Ld.DR relied on the orders passed by the authorities below. We have perused the submissions advance by both sides in the light of record placed before us. 5. From the arguments of the Ld.AR, there does not arise in malafide intention on behalf of the assessee in not representing its case before the Ld.CIT(A)/NFAC there is nothing contrary to what has been submitted by the Ld.AR has been brought on record by the revenue. We therefore do not find any reason not to remit this issue back to Ld.CIT(A) for adjudicating the issue on merits. The assessee is directed to furnish all relevant documents/evidences in support of its claim and the Ld.CIT(A) is directed to pass a reasoned order on merits having regards to such documents/evidences furnished by the assessee. Needless to say that proper opportunity of being heard must be granted to the assessee. 5.1 The assessee has at the outset furnished a letter dated 01/07/2025 mentioning following email address which is as per the updated e-filing portal : 6 ITA No.3253/Mum/2025; A.Y. 2018-19 Garuda Construction And Engineering Limited • [e-mail] • [e-mail] 5.2 The Ld.CIT(A)/NFAC is directed to issue notice of hearing to the assessee on one of the above email address updated on the e- filing portal. Accordingly the grounds raised by the assessee stands partly allowed for statistical purposes. In the result the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 08/07/2025 Sd/- Sd/- (GIRISH AGRAWAL) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 08/07/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai "