INDIAN MAGIC EYE PRIVATE LIMITED,PUNE V. ITO, PUNE

ITA 1578/PUN/2024

AI Insights

The case involves Indian Magic Eye Private Limited, which appealed against the orders of the CIT(A)/NFAC concerning an assessment order under section 143(3) and a penalty order under section 270A of the Income Tax Act for the assessment year 2018-19. The assessee had initially filed a return declaring an income of Rs.68,57,222, which was later revised to Rs.73,21,919. The Assessing Officer made significant additions to the income, resulting in a total assessed income of Rs.7,82,78,106, citing non-compliance with notices during the COVID-19 pandemic. The CIT(A) dismissed the appeal due to a delay of 561 days in filing, which the assessee attributed to the pandemic and the Supreme Court's exclusion of limitation periods up to May 30, 2022. The Tribunal found merit in the assessee's arguments, particularly regarding the non-consideration of documents submitted during the assessment and the impact of the pandemic on compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41447 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Assessee Lawyers: NIKHIL ARUN PATANKAR
• Keywords: Condonation of delay; Additional evidence; Revised return; Corroborative evidences
• Section: 143(3); 142(1); 143(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.1578 & 1579/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Indian Magic Eye Private Limited, Flat No.4, Prabhi Apartments, 768/1, Deccan Gymkhana, Opp PYC Basketball Court, Erandwane, Pune- 411004. PAN : AAACI7388C Vs. ITO, National e- Assessment Centre, Delhi. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 05.06.2024 passed by Ld. CIT(A)/NFAC involving the issue of assessment order u/s 143(3) and issue of penalty u/s 270(A) respectively of the IT Act for the assessment year 2018-19. Assessee by : Shri Nikhil Arun Patankar Revenue by : Shri Chandra Vijay Date of hearing : 22.01.2025 Date of pronouncement : 29.01.2025 ITA Nos.1578 & 1579/PUN/2024 2 ITA No.1579/PUN/2024 : 2. Facts of the case, in brief, are that the assessee is a private limited company and is engaged in the multi media industries, providing services in the field of design, audio visual, web and interactive technology, entertainment and communication. The assessee has filed its original return of income on 31.10.2018 declaring income of Rs.68,57,222/-. Subsequently, the assessee furnished revised return of income on 23.03.2019 declaring revised income of Rs.73,21,919/-. Notices u/s 143(2) and 142(1) respectively were issued requiring the assessee to furnish various details. In response, the assessee furnished reply along with supporting documents on two occasions. The Assessing Officer again issued another notice on 01.03.2021 to furnish/upload remaining information/documents and thereafter issued notice u/s 142(1) on 05.04.2021. In response to the above notice, the assessee submitted that due to Covid Pandemic Lockdown all the establishments are closed and, therefore he is unable to furnish reply & accordingly requested for further time to submit the desired documents. The Assessing Officer rejected the above request of adjournment and proceeded to complete the assessment u/s 143(3) ITA Nos.1578 & 1579/PUN/2024 3 r.w.s. 144B of the IT Act by determining total income at Rs.7,82,78,106/- as against the income returned by the assessee at Rs.73,21,919/-. The above assessed income includes various additions amounting in all to Rs.7,09,56,186/-. 3. In first appeal, Ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing as under :- “Considering the non-compliant behavior of the appellant assessee during assessment proceedings, a delay of 561 days in filing this appeal that too without any reason enough or supporting evidence or even an affidavit to justify its case for such a delay, the appellant’s request for condonation of delay being turn down by this Appellant authority and the additional documents being rejected. This Appellate authority rejects the appeal of the appellant assessee and resultantly the addition’s made by the Assessing Officer amounting to Rs.7,09,56,186/- in its order are hereby UPHELD. The grounds are not allowed.” 4. It is this order against which the assessee is in appeal before this Tribunal. 5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before us that the reason of dismissing the appeal by Ld. CIT(A)/NFAC was non-condonation of delay of 561 days. In this regard, it was submitted that Hon’ble Supreme Court in an order passed in suo moto application has excluded the period of ITA Nos.1578 & 1579/PUN/2024 4 limitation upto 30.05.2022 and after excluding the above period the delay remains only 157 days. It was further submitted that the documents which were produced before the Assessing Officer were also produced before Ld. CIT(A)/NFAC but Ld. CIT(A)/NFAC committed grave error in treating those documents as additional evidences. Ld. AR further submitted that the assessment order was passed on 22.04.2021 and that was the Covid Pandemic period. It was further submitted that due to Covid Pandemic, the last two notices issued by the Assessing Officer could not be complied by the assessee. Although a request for adjournment was made before the Assessing Officer which was not considered by him and the assessment orders were passed which resulted in unnecessarily additions and huge demands. Ld. AR also drew our attention to the modified/additional grounds of appeal and requested to set-aside the orders passed by Ld. CIT(A)/NFAC as well as by the Assessing Officer. 6. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. ITA Nos.1578 & 1579/PUN/2024 5 7. We have heard Ld. Counsels from both the sides and perused the material available on record. We find that Ld. CIT(A)/NFAC has not condoned the delay of 561 days in filing the appeal before him. It is an admitted fact that the Hon’ble Apex Court has already excluded the period upto 30.05.2022 for the purpose of calculation of limitation. However, even after excluding the period upto 30.05.2022 there remains delay of 157 days in filing the appeal before Ld. CIT(A)/NFAC. We also find that Ld. CIT(A)/NFAC in his order has mentioned that the assessee has not filed any application under Rule 46A(3) of the IT Rules for admission of additional evidences submitted before him during the course of appellate proceedings and accordingly the evidences/documents filed before him were not considered by Ld. CIT(A)/NFAC. In this regard, we find that it was the contention of Ld. AR that all these documents were filed before the Assessing Officer during the course of assessment proceedings and therefore these documents do not constitute an additional evidence and Ld. CIT(A)/NFAC should have had considered the same for the purpose of deciding the appeal. We further find that the whole of the assessment proceedings before the Assessing Officer was continued during the ITA Nos.1578 & 1579/PUN/2024 6 Covid Pandemic. Admittedly, not less than 10 notices were issued to the assessee for making compliance before the Assessing Officer and the assessee could not make compliance only against 3 notices. It was the contention of Ld. Counsel of the assessee that most of the compliance desired by the Assessing Officer was made and only last notice which was required to be complied on 09.04.2021 could not be complied due to the Covid Pandemic Lockdown and even adjournment request was also send to the Assessing Officer but the same was not considered by the Assessing Officer. Considering the totality of the facts of the case, & also in the interest of justice, without going into the merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to condone the delay & decide the appeal afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard & to produce any further documents evidences explanations in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per ITA Nos.1578 & 1579/PUN/2024 7 law. Since we have not gone into the merits of the case and only remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh after condoning the delay, other grounds raised before us are not adjudicated. 8. In the result, the appeal filed by the assessee in ITA No.1579/PUN/2024 is allowed for statistical purposes. ITA No.1578/PUN/2024 : 9. As we have already set-aside quantum appeal order and remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh, therefore, we are of the considered opinion that the appeal against the penalty order u/s 270A of the IT Act also needs to be decided afresh being consequential in nature. Accordingly, the order passed by Ld. CIT(A)/NFAC is set-aside and the matter is remanded back to his file with a direction to condone the delay, if any, and decide the penalty appeal afresh after providing reasonable opportunity of hearing to the assessee. Thus, the grounds raised by the assessee are partly allowed. 10. In the result, the appeal filed by the assessee in ITA No.1578/PUN/2024 is partly allowed. ITA Nos.1578 & 1579/PUN/2024 8 11. To sum up, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 29th day of January, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 29th January, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "