JAP AGRO FOODS PVT. LTD,VADODARA V. THE DY.CIT, CIRCLE-1(1)(2) PREVIOUSLY ACIT, CIRCLE-1(1)(2), VADODARA

ITA 1609/AHD/2025

AI Insights

The case involves Jap Agro Foods Pvt. Ltd., which appealed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the imposition of a penalty under Section 271(1)(c) of the Income Tax Act, 1961. The penalty was initially levied by the Assessing Officer following additions made to the assessee's income for the assessment year 2011-12. The ITAT had previously reduced these additions but confirmed certain disallowances, which were the basis for the penalty. The main contention in the current appeal was the applicability of the penalty following a subsequent rectification that reduced the taxable income due to unconsidered carry forward business losses. The Tribunal dismissed the appeal, finding no error in the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780628 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 25-08-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji & Others [(1987) 167 ITR 471 (SC)], N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: VIPUL KHANDHAR
• Keywords: Condonation of delay; Reasonable cause; Rectification of order; Carry forward of business losses
• Section: 154; 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.1609/Ahd/2025 (Assessment Year: 2011-12) Jap Agro Foods Pvt. Ltd., Block No. 295, At & Post Ranu Ranu, Vadodara-391445 Vs. Deputy Commissioner of Income Tax, Circle-1(1)(2), Vadodara (Previously ACIT, Circle- 1(1)(2), Vadodara) [PAN No.AABCJ3974G] (Appellant) .. (Respondent) Appellant by : Shri Vipul Khandhar, AR Respondent by: Shri B. P. Srivastava, Sr. DR Date of Hearing 07.10.2025 Date of Pronouncement 08.10.2025 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 13.10.2023 passed for A.Y. 2011-12. Application for Condonation of Delay: 2. At the outset, we observe that there is a delay of 603 days in filing of appeal by the assessee before the Tribunal. The assessee has filed an application supported by an affidavit explaining the reasons for the delay. We have carefully perused the contents of the affidavit and the submissions made thereon. It is seen that the order of the learned Printed from counselvise.com ITA No. 1609/Ahd/2025 Jap Agro Foods Pvt. Ltd. vs. DCIT Asst.Year –2011-12 - 2– Commissioner (Appeals), NFAC, Delhi, was passed on 13.10.2023, and the period for filing appeal before the Tribunal expired on 13.12.2023. The assessee, however, filed the present appeal belatedly, explaining that the delay was occasioned on account of ongoing proceedings before the Assessing Officer relating to rectification and giving effect to the appellate orders. 3. It is noted that after the disposal of the assessee’s quantum appeal by the Hon’ble ITAT, Ahmedabad, the Assessing Officer had passed an order giving effect under section 250 on 07.12.2023, which contained certain mistakes. Subsequently, the DCIT passed a rectified order under section 154 read with section 254 on 24.02.2025 to correctly give effect to the Tribunal’s order in the quantum appeal. The assessee has further placed on record that it had filed an application for rectification of the order giving effect to the CIT(A) order on 27.02.2025, and till the date of filing of the present appeal, no order has been passed on that application. The assessee has contended that under a bona fide belief that the rectification order giving proper effect would be issued shortly, the appeal could not be filed within the prescribed time, and that the delay was neither deliberate nor due to negligence but was caused by circumstances beyond its control. 4. On a perusal of the record, we find that the explanation furnished by the assessee is reasonable and supported by an affidavit duly placed on record. The sequence of events clearly indicates that the delay arose due to genuine procedural confusion and pending rectification proceedings before the Department. The Hon’ble Supreme Court in the case Printed from counselvise.com ITA No. 1609/Ahd/2025 Jap Agro Foods Pvt. Ltd. vs. DCIT Asst.Year –2011-12 - 3– of Collector, Land Acquisition v. Mst. Katiji & Others [(1987) 167 ITR 471 (SC)] has held that a liberal approach should be adopted while considering condonation of delay so as to advance substantial justice. The Hon’ble Court emphasized that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Similarly, in N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123], it was held that length of delay is not material, so long as the explanation is bona fide and not tainted with mala fides or dilatory intent. 5. In the present case, we are satisfied that the assessee was prevented by sufficient and reasonable cause from filing the appeal within the prescribed period. The delay of 603 days has been explained satisfactorily in light of the affidavit and the surrounding facts, and no mala fide intention or negligence can be attributed to the assessee. Accordingly, in the interests of substantial justice, we condone the delay of 603 days in filing of the appeal and admit the appeal for adjudication on merits. On Merits: 6. The assessee has raised the following grounds of appeal: “1. The learned CIT(A), NFAC, Delhi erred in law and on facts in passing the order u/s 250 of IT Act, 1961 which is required to be quashed. 2. The learned CIT(A), NFAC, Delhi erred in imposing penalty u/s. 271(1)(c) of the IT Act, 1961.” 7. The brief facts of the case are that the Assessing Officer vide order dated 26.03.2014 made additions to the returned income of the assessee Printed from counselvise.com ITA No. 1609/Ahd/2025 Jap Agro Foods Pvt. Ltd. vs. DCIT Asst.Year –2011-12 - 4– and computed the income at Rs. 3,94,76,330/-. Further, the Assessing Officer also initiated penalty under Section 271(1)(c) of the Act for concealment of income and vide order dated 24.03.2017 levied penalty @ 300% of the tax sought to be evaded. Meanwhile, the assessee filed appeal before ITAT against quantum additions made by the Assessing Officer and vide order dated 03.03.2020 the ITAT gave substantial relief to the assessee and restricted the total additions to Rs. 1,92,56,204/-. The tax thereof was computed at a figure of Rs. 63,96,430/-. Further, vide order dated 13.10.2023, Ld. CIT(A) restricted the penalty @ 100% on the aforesaid amount of tax (Rs. 63,96,430/-) sought to be evaded by the assessee. 8. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 9. Before us, the Counsel for the assessee has not disputed or made any arguments with regards to levy of penalty under Section 271(1)(c) of the Act with respect to the quantum additions of Rs. 1,92,56,204/- confirmed by ITAT. The Counsel for the assessee has not disputed levy of penalty on the aforesaid additions / disallowances confirmed by ITAT, consequent to which Ld. CIT(A) restricted the penalty to 100% of the tax sought to be evaded by the assessee with regards to those additions. The only and limited issue raised by the assessee before us was that subsequently, the Assessing Officer vide order dated 24.12.2025 had reduced the total income of the assessee to Rs. 1,43,86,094/- (in response to rectification application filed by the assessee) as against the income/additions of Rs. Printed from counselvise.com ITA No. 1609/Ahd/2025 Jap Agro Foods Pvt. Ltd. vs. DCIT Asst.Year –2011-12 - 5– 1,92,56,204/- confirmed by ITAT. Accordingly, the prayer of the Counsel for the assessee is that the levy of penalty under Section 271(1)(c) of the Act should be restricted to the income of Rs. 1,43,86,094/- and not on the income figure of Rs. 1,92,56,204/- as computed by the ITAT (notably against which no further appeal has been filed by the assessee disputing the additions confirmed by ITAT). On perusal of the rectification order passed by the Ld. DCIT, Vadodara vide order dated 24.02.2025, it is seen that evidently the total income of the assessee was reduced on account on non-grant of carry forward of business losses from earlier years, which were omitted to be considered by the Assessing Officer, while passing the assessment order. Further, nothing has been pointed out before us that there was any error in the quantum of disallowances confirmed by ITAT amounting to Rs. 1,92,56,204/-. There is no allegation / averment on part of the Counsel for the assessee that there was any error in computing the disallowance / additions confirmed by ITAT while passing it’s order dated 03.03.2020 and accordingly, there is no dispute insofar as of the quantum of additions which have been confirmed by ITAT. Therefore, clearly the 154 order passed by the DCIT has not in any manner to reduced the taxable income on account of any computational error in the disallowances confirmed by ITAT with regards to quantum additions. As stated earlier, the assessee has not disputed the quantum additions confirmed by ITAT. Further, the assessee has also not disputed levy of penalty @ 100% with regards to these quantum additions confirmed by ITAT vide order dated 03.03.2020. Therefore, in view of the above facts, the Counsel for the assessee has not pointed out to any deficiencies / error in the order of Ld. Printed from counselvise.com ITA No. 1609/Ahd/2025 Jap Agro Foods Pvt. Ltd. vs. DCIT Asst.Year –2011-12 - 6– CIT(A) against which appeal has been initiated by the assessee. Further, as stated earlier even in the 154 order referred to above, the taxable income has not been reduced on account of any computational error with regards to the additions confirmed by ITAT. Accordingly, there is no mistake in the order of Ld. CIT(A) so as to call for any interference. Additionally, we also note that since under 154 order passed by the DCIT, the taxable income has been reduced on account of grant of carry forward of passing losses from earlier years which were inadvertently omitted by the DCIT, this would not in any manner whatsoever affect the levy of penalty with regards to the quantum additions confirmed by ITAT which have not been disputed by the Counsel for the assessee as well. Accordingly, since there is no infirmity in the order of Ld. CIT(A), so as to call for any interference, the appeal of the assessee stands dismissed. 10. In the result, the appeal of the assessee is dismissed. This Order pronounced in Open Court on 08/10/2025 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 08/10/2025 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 Printed from counselvise.com "