Vizebh Compositech Pvt. Ltd., Vadodara V. Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara

ITA 292/AHD/2022

AI Insights

The case involves Vizebh Compositech Pvt. Ltd., which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which had dismissed their appeal on the grounds of non-appearance and non-compliance with procedural notices. The primary issue in the original assessment was the addition of Rs. 9,84,68,000 under Section 68 of the Income Tax Act, which was treated as unexplained credit. The assessee argued that they had provided sufficient details to explain the source of the share application money. The ITAT found that the assessee had a reasonable cause for not appearing before the CIT(A) and for the delay in filing the appeal, primarily due to financial crises and the travel of one of its directors abroad.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125644 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 25-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Assessment record; Condonation of delay
• Section: 68; 234B; 250

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 . N o . 2 9 2/ A h d /2 0 2 2 ( A s se ss m e nt Y e a r : 20 17- 1 8 ) Viz eb h C o m p o s it e c h P vt . Lt d. B l ock N o . 6 2 , 63 , K ur a li G a n p at pu r a R o ad , N es t to N ar m ada C an al , Ku r al i, V ad od a r a - 3 9 1 24 0 V s. D C IT C ir cl e - 2( 1) ( 1) , V a d o da r a [ P AN N o. A A EC V 6 16 5 C ] (Appellant) .. (Respondent) Appellant by : Ms. Amrin Pathan, A.R. Respondent by: Shri Sudhendu Das, CIT D.R. D a t e of H ea r i ng 24.04.2023 D a t e of P r o no u n ce me nt 25.04.2023 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. CIT(Appeals), National Faceless Appeal Centre(in short “NFAC”), Delhi in Order No. ITBA/NFAC/S/250/2021-22/1041538532(1) vide order dated 25.03.2022 passed for Assessment Year 2017-18. 2. The assessee has taken the following grounds of appeals:- “Violation of Principle of Natural Justice: 1) The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi ["CIT(A)"] erred in fact and in law in passing an exparte order. 2) The learned CIT(A) erred in fact and in law in dismissing the appeal without providing proper opportunity of being heard. ITA No. 292/Ahd/2022 Vizebh Compositech Pvt. Ltd. vs. DCIT Asst.Year –2017-18 - 2 - 3) The learned CIT(A) erred in fact and in law in passing the order against the principle of natural justice. Without prejudice to the above: Addition u/s 68: 4) The learned CIT(A) erred in fact and in law in confirming the addition made by Deputy Commissioner of Income lax, Circle 2(1)(1), Vadodara ("the AO") of Rs. 9,84,68,000 u/s. 68 of the Act despite the fact that the Appellant had filed all the details explaining the source of share application money. 5) The learned CIT(A) erred in fact and in-law in confirming the addition made by AO of Rs. 9,84,68,000 u/s. 68 of the Act without finding any defect or discrepancy in the source of share application money received by the Appellant. 6) The learned CIT(A) erred in fact and in law in confirming the addition made by the AO despite the fact that the Appellant had proved identity, genuineness and creditworthiness of the share application money received during the year and thereby discharged the primary onus cast upon it u/s 68 of the Act. 7) The learned CIT(A) erred in fact and in law in confirming the addition made by the AO without appreciating the fact that the Appellant has explained the nature and source of source of share application money. ITA No. 292/Ahd/2022 Vizebh Compositech Pvt. Ltd. vs. DCIT Asst.Year –2017-18 - 3 - 8) The learned C1T(A) erred in fact and in law in confirming the addition made by AO of Rs. 9,84,68,000 u/s 68 on the basis of assumptions and suspicions. 9) The learned CIT(A) erred in fact and in law in confirming the addition made by AO of Rs. 9,84,68,000 u/s 68 by making irrelevant observations. Other Grounds: 10) The learned CIT(A) erred in fact and in law in confirming the action of the AO in charging interest u/s 234B of the Act. 11) The learned CIT(A) erred in fact and in law in confirming the action of the AO in charging interest u/s 234D of the Act. 12) The learned CIT(A) erred in fact and in law in confirming the action of learned AO in initiating penalty proceedings u/s 271AAC of the Act. 13) Your Appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal.” 3. The brief facts of the case are that in the assessment proceedings, the Assessing Officer made addition of Rs. 9,84,68,000/- under Section 68 of the Act to the returned income of the assessee. The assessee filed appeal before the Ld. CIT(A), who dismissed the appeal of the assessee on account of non-appearance, with the following observations: ITA No. 292/Ahd/2022 Vizebh Compositech Pvt. Ltd. vs. DCIT Asst.Year –2017-18 - 4 - “3. Notice u/s 250 of the I.T Act was issued to the appellant on 21.01.2022 asking the appellant to file details in support of the grounds of appeal on or before 07.02.2022. However, the appellant did not reply to the notice issued. Accordingly, a 2 nd Notice u/s 250 of the I.T. Act was issued on to the appellant on 05.03.2022 asking the appellant to file details in support of the grounds of appeal on or before 21.03.2022. In this notice the appellant was duly informed that this is the final opportunity granted. However, appellant again did not reply to the 2 nd notice too. In absence of details in support of GOA filed, appeal cannot be decided. The non-compliance to the 2 notices issued shows that the appellant is not interested in pursuing its appeal. The order of AO is upheld and the appeal stands DISMISSED.” 4. The assessee is in appeal before us against the aforesaid order passed by the Ld. CIT(A) dismissing the appeal of the assessee. Before going into the merits of the case we observe that the appeal of the assessee is time barred by 63 days. The assessee filed before us application for condonation of delay alongwith affidavit with request to condone the aforesaid delay in filing of the present appeal. The Counsel for the assessee submitted before us that the applicant is a Private Limited Company engaged in the business of installation and erection of manufacturing plants. During the year under consideration, the assessee had received share application money which was treated as unexplained credit under Section 68 of the Act. The Counsel for the assessee submitted that the delay in filing of appeal is owing to the fact that the assessee company was facing severe financial crisis and in order to arrange for the funds, one of the Directors and authorized person Mr. ITA No. 292/Ahd/2022 Vizebh Compositech Pvt. Ltd. vs. DCIT Asst.Year –2017-18 - 5 - Amrish Govindbhai Patel was travelling outside India during the period 26.09.2021 to 06.03.2022. In support of thereof the Counsel for the assessee also submitted copy of passport of the authorized person. Further, the Counsel for the assessee submitted that assessee had taken loan from Bank of Baroda which was having outstanding balance of 15 crores approximately as on 01.01.2019. The Bank of Baroda, in order to recover the outstanding loan amount, took possession of the mortgaged property of the assessee company which was given as security against the borrowings made by the assessee company. Subsequently, the Bank of Baroda also arranged for e-auction for the sale of the aforesaid property on 19.04.2022 and 12.05.2022. Therefore, it was submitted by the Counsel that in view of the aforesaid financial difficulties, the assessee company alongwith Directors and other persons closely associated with the assessee were going through a bad financial phase during the period when Ld. CIT(A) issued notice fixing the hearing, as well as at the time when the order was passed ex-parte by Ld. CIT(A). It was for the aforesaid reasons that the assessee could not cause appearance before the Ld. CIT(A) during the course of appellate proceedings and also the assessee could not file the appeal against the order passed by Ld. CIT(A) within time. 5. We have heard the contention of the Counsel for the assessee and perused the assessment records. On going through the facts of the case, we are of the considered view that the assessee has been able to establish reasonably good cause for not being able to cause appearance before the Ld. CIT(A) during the course of appellate proceedings and also for the delay in filing of the present appeal. Therefore, looking into facts of the instant case ITA No. 292/Ahd/2022 Vizebh Compositech Pvt. Ltd. vs. DCIT Asst.Year –2017-18 - 6 - we are hereby condoning the delay in filing of the present appeal. The Ld. D.R. has also not objected to assessee’s request for condonation of delay in filing of this appeal. 6. Further, we observe that in this case, looking into the circumstances which resulted in non-appearance on part of the assessee to cause appearance before the Ld. CIT(A) to present its case on merit, in the interests of justice, the matter is being restored to the file of Ld. CIT(A) to hear the case on merits after giving due opportunity of hearing to the assessee. Accordingly, the matter is being set-aside to the file of the Ld. CIT(A) with the aforesaid directions. 7. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 25/04/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 25/04/2023 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