GEET REALITY,VADODARA V. THE DY.CIT, CIRCLE-1(1)(1), VADODARA

ITA 570/AHD/2025

AI Insights

The case involves Geet Reality, the appellant, contesting an order from the Deputy Commissioner of Income Tax, Vadodara, which was upheld by the CIT(A), NFAC, Delhi. The primary issue was the addition of Rs. 36,29,972 to the assessee's income, treated as undisclosed rent receipts. The CIT(A) dismissed the appeal ex-parte due to non-compliance with procedural requirements, despite the appellant's claims of operational disruptions due to the COVID-19 pandemic. The Income Tax Appellate Tribunal (ITAT) found merit in the appellant's arguments regarding the impact of the pandemic on compliance and restored the matter to the Assessing Officer for a fresh examination, emphasizing the need for substantial justice over procedural technicalities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786826 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 17-03-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji, N. Balakrishnan v. M. Krishnamurthy, Vedabai v. Shantaram Baburao Patil, New India Insurance Co. Ltd. v. Shanti Misra
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RAMESHWAR P MEENA
• Assessee Lawyers: HEMANT SUTHAR
• Keywords: Condonation of delay; Opportunity of being heard; FORM 26AS

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.570/Ahd/2025 (Assessment Year: 2017-18) Geet Reality, Ramesh Patel Estate, Nr. Saraswati Complex, Patidar Crossing, Manjalpur, Vadodara-390011 Vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Vadodara (Previously ACIT, Circle- 1(2)(1), Vadodara) [PAN No.AALFG9496P] (Appellant) .. (Respondent) Appellant by : Shri Hemant Suthar, AR Respondent by: Shri Rameshwar P Meena, Sr. DR Date of Hearing 17.11.2025 Date of Pronouncement 19.11.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 24.03.2023 passed for A.Y. 2017-18. 2. The Assessee has taken the following grounds of appeal:- “1. The Ld. CIT(Appeals), National Faceless Appeal Centre (NFAC) has erred in law and in facts in dismissing the appeal ex-parte without affording reasonable opportunity of being heard. The appeal of the appellant may kindly be restored to the file of the Ld. CIT (Appeals), NFAC, and may please be directed to afford reasonable opportunity of being heard. 2. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. AO in making an addition of Rs. 36,29,972/-, treating the advance rent received as undisclosed rent receipts. The impugned addition of Rs. 36,29,972/- being bad in law and in facts is prayed to be deleted. 3. Your appellant craves liberty to add, alter, amend substitute or withdraw any of the ground(s) of appeal hereinabove contained.” Printed from counselvise.com ITA No. 570/Ahd/2025 Geet Reality vs. DCIT Asst.Year –2017-18 - 2– Application for condonation of delay of 656 days in filing of the present appeal: 3. The brief facts of the case are that the present appeal has been filed with a delay of 656 days in filing the appeal before us. The assessee has also filed an application for condonation of delay explaining the reasons for not being able to file the appeal within the prescribed period. In the application, the assessee has submitted that the impugned order passed by the Ld. CIT(A), NFAC dated 24.03.2023 was not within the knowledge of the assessee as the appeal before the CIT(A) was filed in 2020 and no communication regarding the passing of the order came to its notice. It was only when the assessee approached its Chartered Accountants, M/s. Mukund & Rohit, for verification of the status of the appeal on the Income-tax Portal that it came to know that the order had already been passed. The assessee has further explained that due to the COVID-19 pandemic and subsequent disruptions in day-to-day functioning, it was unable to comply with notices issued during the relevant period and had sought adjournments wherever possible. It is also submitted that the last notice dated 16.03.2023 fixing the hearing on 23.03.2023 inadvertently escaped the assessee’s attention. Upon coming to know about the appellate order, the assessee immediately proceeded to file the appeal though belatedly. In support of condonation, reliance has been placed upon several judicial precedents including Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) (SC) where the Hon’ble Supreme Court has held that the expression “sufficient cause” must receive a liberal interpretation to advance substantial justice. Reliance is also placed on N. Balakrishnan v. M. Krishnamurthy (7 SCC 123), Vedabai v. Printed from counselvise.com ITA No. 570/Ahd/2025 Geet Reality vs. DCIT Asst.Year –2017-18 - 3– Shantaram Baburao Patil (253 ITR 798) (SC) and New India Insurance Co. Ltd. v. Shanti Misra (AIR 1976 SC 237) where it has been held that technicalities should not come in the way of adjudication of matters on merits and that the courts must adopt a pragmatic and justice-oriented approach while dealing with delay. Having considered the explanation tendered by the assessee and respectfully following the above decisions, we are of the view that the delay is supported by bona fide reasons and deserves to be condoned in the interest of justice, more so when refusal to condone the delay would result in denial of an opportunity to the assessee for adjudication on merits. Accordingly, the delay of 656 days in filing the appeal is hereby condoned. On Merits: 4. The brief facts of the case are that the assessee is engaged in the business of construction and renting of a mall and had filed its return of income declaring a loss of Rs. 2,91,93,574/-. During the assessment, the Assessing Officer noted from Form 26AS that M/s. PVR Ltd. had paid rent of Rs. 99,11,734/- to the assessee, whereas the assessee had shown rent receipts of only Rs. 62,81,762/- in its books. On being asked to explain the difference, the assessee submitted that a sum of Rs. 40,83,720/- represented advance rent received for three months up to March 2017. The Assessing Officer held that the advance rent was taxable in the year of receipt and made an addition of Rs. 36,29,972/-, assessing the loss at Rs. 2,55,63,602/- and also initiated penalty proceedings under section 270A. Printed from counselvise.com ITA No. 570/Ahd/2025 Geet Reality vs. DCIT Asst.Year –2017-18 - 4– 5. Against this assessment, the assessee filed an appeal before the Ld. CIT(A). During the appellate proceedings, the Ld. CIT(A) issued notices on various dates including 30.12.2020, 18.11.2021, 09.12.2021, 24.12.2021, 02.02.2022, 01.03.2022 and 16.03.2023. The assessee sought adjournments on three occasions but did not file any written submissions or documentary evidence. Observing that there was no effective compliance, the Ld. CIT(A) dismissed the appeal ex-parte and confirmed the addition made by the Assessing Officer, holding that law assists those who are vigilant and that the assessee had failed to pursue the appeal diligently. 6. The assessee is in appeal before us against the order passed by the CIT(A) dismissing the appeal of the assessee. 7. Coming to the merits, in the assessment order the Assessing Officer observed the Assessing Officer noted that as per Form 26AS, M/s. PVR Ltd. had paid rent of Rs. 99,11,734/- whereas the assessee had recorded rent of only Rs. 62,81,762/-. On being asked to reconcile the difference, the assessee submitted that a sum of Rs. 40,83,720/- represented advance rent received for the remaining months up to March 2017. The Assessing Officer held that the advance rent was taxable during the year itself and accordingly made an addition of Rs. 36,29,972/-to the income the assessee. The assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A), however, dismissed the appeal ex-parte on the ground that despite issuance of several notices on 30.12.2020, 18.11.2021, 09.12.2021, 24.12.2021, 02.02.2022, 01.03.2022 and 16.03.2023, no effective compliance was made except for seeking adjournments on three occasions. The Ld. CIT(A) Printed from counselvise.com ITA No. 570/Ahd/2025 Geet Reality vs. DCIT Asst.Year –2017-18 - 5– observed that the assessee had failed to file any written submissions or documentary evidence and therefore the order of the Assessing Officer deserved to be upheld. The Ld. CIT(A) further relied upon the principle that law assists only those who are vigilant and held that since the assessee did not pursue the appeal diligently, the addition made by the Assessing Officer was confirmed. 8. The assessee is now in further appeal before us against the order passed by the Ld. CIT(A). We have heard the submissions and perused the record. It is seen that the appeal before the Ld. CIT(A) has been dismissed purely for non-compliance without examining the merits of the grounds raised by the assessee. The explanation of the assessee that the pandemic period and operational difficulties had resulted in sporadic non-compliance cannot be brushed aside. At the same time, the assessee cannot escape responsibility for not attending to the various notices issued by the CIT(A) and for failing to cooperate during the assessment as well as appellate proceedings. However, considering the factual matrix of the case and in order to advance substantial justice, we are of the view that the matter requires to be examined afresh by the Assessing Officer by giving the assessee one more final opportunity to present its case. 9. Accordingly, in the interests of justice, the entire matter is restored to the file of the Assessing Officer for de-novo consideration after granting adequate opportunity to the assessee to present all relevant evidence and explanations regarding the rental income and reconciliation thereof. At the same time, considering the continuous non-compliance by the assessee before the lower Printed from counselvise.com ITA No. 570/Ahd/2025 Geet Reality vs. DCIT Asst.Year –2017-18 - 6– authorities, we deem it appropriate to impose a nominal cost. Therefore, while setting aside the matter to the file of the Assessing Officer, the assessee is directed to pay cost of Rs. 5,000/- to the credit of the Government, which shall be deposited before the commencement of the fresh proceedings and evidence of such payment shall be produced before the Assessing Officer. 10. In the result, the appeal is allowed for statistical purposes with directions as above. This Order pronounced in Open Court on 19/11/2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 19/11/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.11.2025 2. Date on which the typed draft is placed before the Dictating Member 18.11.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .11.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 19.11.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 19.11.2025 7. Date on which the file goes to the Bench Clerk 19.11.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "