M/s. Heritage Realities, Vadodara V. The ITO, Ward-1(2)(4), Vadodara

ITA 250/AHD/2021

AI Insights

M/s. Heritage Realities filed multiple appeals against the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Officer concerning the assessment year 2010-11. The appeals primarily challenged the additions made under Sections 40(a)(ia) and 68 of the Income Tax Act, as well as the initiation of penalty proceedings under Section 271(1)(c). The tribunal noted procedural complexities due to the withdrawal of an initial appeal by the assessee under a mistaken belief following a notice under Sections 147/148, leading to multiple rounds of litigation. The ITAT found merit in the assessee's reasons for the delay in filing the appeals and decided to restore the matter to the CIT(A) for a fresh examination on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125683 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 27-08-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 68; 271(1)(c); 10; 2; 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . No s. 2 47 to 25 0 / Ah d/2 0 2 1 ( A s s e s s me nt Y ea r s : 2 0 10 -1 1) M/ s. H e r ita ge R ea l i tie s , 20 3 , Go ld C r a f t, J e ta l pu r R o a d , Va do d ar a - 3 9 00 05 V s .In c o me Ta x Of f ic e r , War d- 1( 2 ) ( 4 )/ Wa r d - 2( 4) , Ba r od a [P AN N o.A A F F H0 37 4 P] (Appellant) .. (Respondent) Appellant by : Ms. Urvashi Sodhan, A.R. Respondent by: Shri Ashok Kumar Suthar, Sr. D.R. D a t e of H ea r i ng 28.08.2023 D a t e of P r o no u n ce me nt 05.09.2023 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: All the four appeals have been filed by the assessee against the orders passed by the Ld. Commissioner of Income Tax (Appeals)-II and 4 (in short “Ld. CIT(A)”), Vadodara and Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre, (in short “NFAC”), Delhi vide different orders dated 24.06.2014, 17.03.2016, 25.08.2021 and 16.09.2021 passed for the same Assessment Year i.e. A.Y. 2010-11. 2. The assessee has taken the following grounds of appeal:- ITA No. 247/Ahd/2021 “1. The Learned CIT (A) has erred in law and on facts of the appellant’s case in dismissing the appeal filed by the appellant on the erroneous ground that the appeal is withdrawn by the appellant. ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 2 - 2. The Learned CIT (A) has further erred in law and on facts in not recalling the appeal subsequently when submitted that the appeal was wrongly withdrawn. 3. The Learned CIT (A) has erred in law and on facts of the appellant’s case in confirming the action of Learned A.O. in making addition of 43,05,000/- being unsecured loan received on the erroneous ground that the said loan is unexplained. 4. Both the lower authorities have erred in law and on facts of the appellant’s case in not appreciating that the subject unsecured loan is fully explained. 5. The initiation of penalty proceedings U/s 271(1)(c) of the Act is not justified. 6. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before hearing of the appeal.” ITA No. 248/Ahd/2021 “1. The Learned CIT (A) has erred in law and on facts of the appellant’s case in rejecting the appellant’s Grounds of Appeal challenging addition of Unsecured Loan on the ground that appeal against the original order passed u/s 143(3) was withdrawn and issue cannot be taken up now in appeal against the reassessment order. ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 3 - 2. The Learned CIT (A) has erred in law and on facts of the appellant’s case in confirming the action of Learned A.O. in making addition of 43,05,000/- being unsecured loan received on the erroneous ground that the said loan is unexplained. 3. Both the lower authorities have erred in law and on facts of the appellant’s case in not appreciating the fact that the subject unsecured loan is fully explained. 4. The initiation of penalty proceedings U/s 271(1)(c) of the Act is not justified. 5. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before hearing of the appeal.” ITA No. 249/Ahd/2021 “1. The Learned CIT(A) has erred in law and on facts of the appellant’s case in dismissing the appeal of the appellant on the ground that once appeal is disposed of it cannot be revived by filing fresh appeal before the same forum subsequently. 2. The Learned CIT (A) has erred in law and on facts of the appellant’s case in confirming the action of Learned A.O. in making addition of 43,05,000/- being unsecured loan received on the erroneous ground that the said loan is unexplained. ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 4 - 3. Both the lower authorities have erred in law and on facts of the appellant’s case in not appreciating the fact that the subject unsecured loan is fully explained. 4. The initiation of penalty proceedings U/s 271(1)(c) of the Act is not justified. 5. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before hearing of the appeal.” ITA No. 250/Ahd/2021 “1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts of the appellant’s case in confirming the action of the Ld. A.O. in levying penalty U/s. 271(1)(c) of the Act of 12,31,365/-. 2. Both the lower authorities have erred in law and on facts & circumstances of the appellant’s case in not appreciating the fact that no penalty U/s. 271(1)(c) of the Act can be levied. 4. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before hearing of the appeal.” 3. These are four appeals filed by the assessee for A.Y. 2010-11 before us. Three appeals have been filed by the assessee against the quantum additions made by the Ld. CIT(A) for A.Y. 2010-11 and one ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 5 - appeal has been filed against the penalty confirmed by Ld. CIT(A) under Section 271(1)(c) of the Act. Further, there is a delay of 2549 days in Appeal No. 247/Ahd/2021, and a delay of 1945 days in Appeal No. 248/Ahd/2021 and the assessee has filed application for condonation of delay on 29.09.2021 to condone the delay alongwith an Affidavit furnishing the reasons for the aforesaid delay in filing of the present appeals. 4. In order to understand why multiple appeals have been filed by the assessee in respect of same assessment year, we shall briefly discuss the factual matrix of the case. Original assessment order under Section 143(3) for A.Y. 2010-11was passed by the Ld. Assessing Officer on 25.03.2013 in which three additions were made (i) disallowance of Rs. 1.60 lakhs under Section 40(a)(ia) of the Act, (ii) addition of Rs. 84,108/- disallowing certain expenses and (iii) addition of Rs. 43,05,000/- under Section 68 of the Act. The aforesaid order were challenged before Ld. CIT(A), but while the matter was pending before CIT(A), the assessee received a notice under Section 147/148 of the Act from the concerned Assessing Officer for the same assessment year i.e. A.Y. 2010-11 in which certain additions were proposed to be made on the basis of audit objections. In view of the receipt of the aforesaid notice, the assessee withdrew the appeal filed before CIT(A) under the erroneous belief that now a fresh / denovo assessment would be made, against which the assessee would file a fresh appeal before CIT(A). Accordingly, the assessee filed a request for withdrawal of the original appeal filed before Ld. CIT(A) and Ld. CIT(A) dismissed the appeal of the assessee vide ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 6 - order dated 24.06.2014 dismissing the appeal of the assessee as “withdrawn”. In second round of the assessment proceedings under Section 147/148 of the Act for the same assessment year i.e. A.Y. 2010- 11, the Assessing Officer made separate addition under Section 40(a)(ia) of the Act amounting to Rs. 12.62 lakhs. The assessee again filed appeal before Ld. CIT(A) against the order passed under Section 147/148 of the Act in which relief was sought both with respect to additions made in the original assessment order dated 25.03.2013 as well as addition made in the subsequent order passed under Section 147/148 of the Act dated 28.01.2015. However, Ld. CIT(A) allowed the appeal of the assessee challenging the addition of Rs. 12.62 lakhs made in the order passed under Section 147/148 of the Act dated 28.01.2015, however, with respect to the additions made vide the original order passed by Ld. Assessing Officer dated 25.03.2013, Ld. CIT(A) dismissed the assessee’s appeal on the ground that these grounds cannot be raised by the assessee in appeal because the impugned additions were not the subject matter of re-assessment order under Section 147 of the Act against which the assessee has filed the appeal. The Ld. CIT(A) held that these issues were the subject matter of original assessment order and the assessee had earlier withdrawn the appeal filed against the original assessment order and the Ld. CIT(A) had dismissed the appeal of the assessee as “withdrawn” vide order dated 24.06.2014. Thereafter, the assessee again filed a fresh appeal against the original assessment order passed by the Assessing Officer dated 25.03.2013 before Ld. CIT(A) (which as pointed out by us, had been dismissed by the Ld. CIT(A) as withdrawn vide order ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 7 - dated 24.06.2014) alongwith an application of condonation of delay of 1237 days in filing the appeal. However, Ld. CIT(A) dismissed the appeal of the assessee by observing that the only way of reviving the case is that the assessee has to go in appeal against the earlier order of Ld. CIT(A) dated 24.06.2014, wherein the assessee was allowed to withdraw the appeal and accordingly, the appeal of the assessee was dismissed. Accordingly, the third appeal filed by the assessee was dismissed by Ld. CIT(A) with the aforesaid observations vide order dated 25.08.2021. 5. Thereafter, the assessee has filed three appeals before us for the same assessment year i.e. 2010-11, primarily with the view to adjudicate on the issue of addition of Rs. 53,05,000/- made in the original assessment order dated 25.03.2013, which could not be heard by Ld. CIT(A) on merits since the assessee had withdrawn the appeal against the aforesaid additions made in the original assessment order under the mistaken / erroneous belief that on receipt of the 147 notice, the assessee would be permitted to / required to file a fresh appeal both with respect to the additions made in the original assessment and also the additions made in the fresh assessment order to be passed under Section 147/148 of the Act. The fourth appeal filed by the assessee before us is against the order passed by Ld. CIT(A) confirming the levy of penalty under Section 271(1)(c) of the Act (in ITA No. 250/Ahd/2021). It is observed that it is for the aforesaid reasons that there has been delay in filing of Appeal Nos. 247/Ahd/2021 and 248/Ahd/2021. ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 8 - 6. Before going into the merits of the case we shall first discuss the application for condonation of delay filed by the assessee in respect of two appeals i.e. ITA Nos. 247/Ahd/2021 and 248/Ahd/2021. From the facts placed on record before us and the arguments taken before us, we observe that the assessee has vigilantly filed appeal against the additions made by the Ld. Assessing Officer before Ld. CIT(A) so as to have been appeal heard on merits. It was only on receipt of 147 notice that the Assessing Officer withdrew its original appeal under the mistaken belief that a fresh appeal was required to be filed against the re-assessment order passed under Section 147/148 of the Act. Therefore, from the facts placed on record before us, we are of the considered view that assessee has a genuine reason for the delay in filing of the present appeals. Accordingly, looking into the instant fact in the interest of justice, the delay of 2562 days in Appeal No. 247/Ahd/2021 and 1898 days with respect to 248/Ahd/2021 is hereby condoned. 7. On merits, it is observed that the additions made by the Assessing Officer vide order dated 25.03.2013 were never adjudicated upon by Ld. CIT(A), since the Ld. CIT(A) had dismissed the appeal of the assessee as “withdrawn” on the request of the assessee, vide order dated 24.06.2014. Therefore, since the Ld. CIT(A) has not deliberated on the issues against which the original appeal was filed by the assessee, in the interest of justice, the matter is being restored to the file of Ld. CIT(A) for denovo consideration in ITA No. 247/Ahd/2021. Accordingly, the Ld. CIT(A) is directed to decide upon the merits of the case in accordance with law, after giving due opportunity of hearing to the assessee. ITA Nos. 247to250/Ahd/2021 M/s. Heritage Realities vs. ITO Asst. Year –2010-11 - 9 - 8. Further, since the additions made have been restored to the file of the Ld. CIT(A), therefore, the appeal with respect to order passed by Ld. CIT(A) confirming the penalty under Section 271(1)(c) of the Act is also restored to the file of the Ld. CIT(A) for denovo consideration. Further, since the original appeal has been restored to the file of Ld. CIT(A) for denovo consideration, the appeals of the assessee in ITA Nos. 248/Ahd/2021 and 249/Ahd/2021 are beings dismissed as infructuous. 9. In the combined result, the appeals filed by the assessee are partly allowed for statistical purposes. This Order pronounced in Open Court on 05/09/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/09/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/ Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 29.08.2023 2. Date on which the typed draft is placed before the Dictating Member 29.08.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 29.08.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .08.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 05.09.2023 7. Date on which the file goes to the Bench Clerk 05.09.2023 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 Despatch of the Order..........................................