KESHAV POWER LIMITED,NEW DELHI V. DCIT, CENTRAL CIRCLE- 13(1), NEW DELHI

ITA 5482/DEL/2025

AI Insights

The case involves Keshav Power Limited, which filed an appeal against the orders of the Learned Commissioner of Income Tax (Appeals) and the Learned Assessing Officer concerning the assessment year 2018-19. The primary issues revolved around the rejection of the revised return of income following a Composite Scheme of Amalgamation and Demerger approved by the NCLT, which was later set aside by the NCLAT. The Tribunal found that the delay in filing the appeal was due to an incorrect email address and not due to any malafide intention. The Tribunal also considered the Supreme Court's directions on the extension of limitation periods due to the COVID-19 pandemic, leading to the setting aside of the impugned orders and a remand for fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846891 (ITAT-NEW DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Delhi
• Assessment Year: 2018-2019
• Appeal Filed On: 03-09-2025
• Other Referred Cases: In Re: Cognizance for Extension of Limitation, Suo Motu W.P. (C) No. 3 of 2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ROHIT TIWARI
• Keywords: Condonation of delay; Set aside; Revised return; Reasonable cause; Period of limitation; Competent authority; Time period of passing order; Scheme of amalgamation
• Section: 143(3); 142(1); 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.5482/Del/2025 (ASSESSMENT YEAR 2018-19) Keshav Power Limited, 7F-7H 7th Floor, Hansalaya Building, 15, Barakhamba Road, Connaught Place, New Delhi-110001 PAN-AACCK5351M Vs. Dy. CIT, Circle-13(1), New Delhi. (Appellant) (Respondent) Assessee by Shri Rohit Tiwari, Adv., Ms. Shivani Adv. and Ms. Tanya, Adv. Department by Ms. Harpreet Singh Hansra, Sr. DR Date of Hearing 22.01.2026 Date of Pronouncement 25.03.2026 O R D E R PER VIMAL KUMAR, JM: The application for condonation of delay of 187 days in filing appeal and appeal filed by the Assessee are against order dated 24.12.2024 of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’] arising out of assessment order dated 02.06.2021 passed by Ld. Assessing Officer/ National Faceless Appeal Centre, Delhi [hereinafter referred to as Ld. AO u/s 143(3) of the Act for Asst. Year 2018-19. Printed from counselvise.com 2 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT 2. Ld. Authorized Representative for appellant assessee submitted that there is delay of 187 days in filing appeal due to non-receipt of impugned order because of incorrect/discontinued email-id. The explanation for delay of 187 days in filing appeal due to incorrect/discontinued email-id resulting in non-receipt of impugned order does not smack of malafide, as appellant/assessee has not gained anything by not filing appeal within period of limitation. Therefore, delay of 187 days in filing appeal is condoned. 3. Brief facts of the case are that assessee company filed return of income on 10.10.2018 declaring total income as Rs.3,78,60,300/-. Subsequently, assessee filed revised return of income on 22.02.2019 declaring total income of Rs.69,97,390/-. The case was selected for complete scrutiny for following reasons: (i) Amalgamation or Demerger (ii) Reduction of income in Revised Return & claim of refund. (iii) Refund claim (iv) Ind-AS Compliance and Adjustment. 4. Notice u/s 143(2) was issued on 22.09.2019 to the assessee. Notice u/s 142(1) along with questionnaire were issued to assessee on 13.03.2020 and 08.12.2020 and a letter dated 29.01.2021. The assessee furnished response on 23.12.2020 and 05.02.2021 and submitted details documents electronically through ITBA. On completion of proceedings, Ld. AO vide order dated 02.06.2021 made additions of Rs.85,80,693/-, Rs.4,27,89,709/- and Rs.1,26,09,141/-. Against order dated 02.06.2021 of Ld. AO, the assessee filed appeal before the Ld. CIT(A) which was dismissed vide order dated 24.12.2024. Printed from counselvise.com 3 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT 5. Being aggrieved, appellant assessee preferred present appeal on following grounds: “1. On Condonation of Delay / Dismissal in Limine 1.1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in dismissing the appeal filed on November 17, 2021 against the assessment order dated June 2, 2021 as time-barred by 138 days without condoning the delay, even though the limitation period stood extended by the binding directions of the Hon'ble Supreme Court in In Re: Cognizance for Extension of Limitation, Suo Motu W.P. (C) No. 3 of 2020, whereby the period from 15.03.2020 to 28.02.2022 was expressly excluded for computation of limitation in judicial and quasi-judicial proceedings. 1.2. That the Ld. CIT(A) erred in passing the impugned order dismissing the appeal on the ground of limitation, in complete disregard of the binding decision of the Hon'ble Supreme Court, which is bad in law and liable to be quashed. 1.3. That the Ld. CIT(A) failed to appreciate that the Appellant had not received effective service of the notices to file response/impugned order as the same were sent to an incorrect email address which was neither registered on the Income Tax Portal nor furnished in Form 35, and as such there was reasonable cause for alleged non- compliance of notices in the course of appellate proceedings. 2. Non-consideration of revised and restated financial statements for determining the total income of the Appellant 2.1 That the Ld. Assessing Officer/ [\"Ld. AO\"] erred in making assessment and determining the total assessed income at Rs. 9,37,59,154 in the assessment order dated June 2, 2021 based upon the unaudited financials data available with original return of income as against the audited financial statements made in compliance with the order of the National Company Law Tribunal/ National Company Law Appellate Tribunal and Hon'ble Supreme Court in respect of Composite Scheme of Amalgamation and Arrangement filed under the provisions of the Companies Act. 2.2 That the Ld. AO/Ld. CIT(A) ought to be directed to make fresh assessment based upon the Audited Financial Statements prepared and being revised and restated for the year under consideration pursuant to the order of National Company Law Tribunal dated April 12, 2018 read with NCLAT order dated November 29, 2019 and September 17, 2021 and Hon'ble Supreme Court order dated September 7,2022. 3. Addition of long-term capital gain- Rs. 4,27,89,709 3.1. That the Ld. AO erred in making addition of long-term capital gain of Rs.4,27,89,709 on pure surmises and conjectures without appreciating that the aforesaid amount of long term capital gain was not chargeable to tax as the same was eligible for set off against brought forward long-term capital losses in view of section 74 of the Act. Printed from counselvise.com 4 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT 4. Addition of income from other source - Rs. 1,26,09,141 4.1. That the Ld. AO erred in making an addition of income from other source of Rs.1,26,09,141 on pure surmises and conjectures without appreciating that the above amount has already been considered while computing the income from business amounting to Rs. 85,80,639, thus the addition is prima facie incorrect as it leads to a double addition. 5. Denial of deduction under section 80G of the Act 5.1. That the Ld. AO erred in denying the deduction of Rs. 500,000 claimed under section 80G of the Act, merely on conjectures and surmises, by holding that the Appellant failed to substantiate the eligibility of the donee organisation under section 80G of the Act. 5.2. That the Ld. AO failed to appreciate that the said organisation being duly approved/registered under section 80G by the Competent Authority, thus the action of the Ld. AO is arbitrary and unsustainable in law, and the denial of deduction under section 80G of the Act so made is liable to be deleted. 6. Denial of set off long-term capital loss as well as non-determination of carried forward long-term capital loss 6.1 That the Ld. AO erred in denying the set off of long term capital loss with the income of long-term capital gain as determined in the impugned assessment order in complete disregard to the provisions of section 74 of the Act as well as failed to determine the amount of carried forward of long-term capital loss for the subsequent years. 7. That the Appellant craves leave to add to, alter, amend, modify or withdraw any of the above grounds of appeal at the time of hearing.” 6. Ld. Authorized Representative for appellant assessee submitted that for the AY 2018-19, Keshav Power Limited (Company) filed its Return of Income on 10.10.2018 declaring a total income of INR 3,78,60,300/- based on the unaudited financial data available at that time. 6.1. Pursuant to the sanction of the Composite Scheme of Amalgamation and Demerger by the Hon'ble NCLT, Chennai Bench, vide order dated 12.04.2018, with the appointed date being 01.04.2016, the Appellant filed a revised return of income on 22.02.2019 declaring a reduced income of Rs. 69,97,390/-. The revised return Printed from counselvise.com 5 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT was filed strictly in conformity with the scheme as approved by the Hon'ble NCLT, which considered the impact of the demerger which involved transfer of assets, liabilities, income, and expenditure of the demerged undertaking to the resulting company, namely Rama Investment Co. Private Ltd. 6.2. The case of the Appellant was selected for scrutiny and notice under section 143(2) of the Act was duly issued. The order of the Hon'ble NCLT approving the Composite Scheme was challenged by minority shareholder before the Hon'ble National Company Law Appellate Tribunal (\"NCLAT\"). The Hon'ble NCLAT, vide its order dated 29.11.2019 set aside the Composite Scheme of Amalgamation and Demerger. The effect of the said order was that the Composite Scheme stood rejected, subject to further legal remedies. 6.3. On the basis of the aforesaid order of the Hon'ble NCLAT dated 29.11.2019, the Ld. Assessing Officer (\"AO\") passed the assessment order dated 02.06.2021 under section 143(3) read with section 1448 of the Act. While framing the assessment, the Ld. AO rejected the revised return of income filed pursuant to the NCLT approved scheme and proceeded to assess the incomebased on the figures disclosed in the original return filed on 10.10. 2018 which was admittedly based on unaudited accounts. The Ld. AO further made various additions and disallowances. The Ld. AO rejected the contention of the Appellant that an application seeking modification and clarification of the NCLAT order dated 29.11.2019 had been filed and was pending adjudication before the Hon'ble NCLAT. 6.4. Subsequent to the passing of the impugned assessment order, the Hon'ble NCLAT passed a further order dated 17.09.2021, rejecting the application seeking modification/clarification of the Judgment and Order dated 29.11. 2019 passed by Printed from counselvise.com 6 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT NCLAT. The matter was thereafter carried in appeal before the Hon'ble Supreme Court, which was disposed of vide order dated 07.09.2022. 6.5 The cumulative effect of the aforesaid proceedings was that the proposed demerger of the undertaking by the Appellant could not be given effect to. Consequently, the Appellant, carried out a restatement of its audited financial statements for the year under consideration so as to give effect to the final judicial directions. The restatement exercise was completed on 16.03. 2023 and the impact of the litigation mentioned above was highlighted in notes to accounts. Thereafter the Company sent the amended tax return for the year under consideration by speed post on 31.03.2023 to the Assessing Officer. 7. Ld. Departmental Representative submitted that the application of condonation of delay in filing appeal and appeal were dismissed by Ld. CIT(A). 8. From examination on record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide order dated 24.12.2024 dismissed application for condonation of delay of 138 days in filing appeal and appeal in limine. Ld. AO while passing order dated 02.06.2021 failed to consider revised return and made assessment, on basis of original return which was unaudited without additions/disallowance. 8.1 Application for condonation of delay of 138 days in filing appeal and appeal due to Covid were filed on 17.11.2021 before Ld. CIT(A). As per Supreme Court directions in Cognizance for Extension of Limitation, Suo Motu W.P. (C) No.3 of 2020, the period from 15.03.2020 to 28.02.2022 for limitation purposes and providing fresh 90 days period from 01.03.2022. Printed from counselvise.com 7 ITA No.5482/Del/2025 Keshav Power Limited vs. DCIT 8.2 In view of above material facts and direction of Hon’ble Supreme Court, in interest of justice, impugned orders dated 24.12.2024 of Ld. CIT(A) and 02.06.2021 of Ld. AO are set aside and the matter is restored to the file of Ld. AO for fresh decision in accordance with law after affording fair opportunity of hearing to the assessee. 9. In the result, the application of condonation of delay for filing appeal of 187 days is allowed and appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the Open Court on 25.03.2026. Sd/- Sd/- (S. RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25.03.2026 *PK, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "