KUNAL BUILDERS AND DEVELOPERS PRIVATE LIMITED,BHOPAL V. ASSESSMENT UNIT ITD DELHI, DELHI

ITA 631/IND/2024

AI Insights

Kunal Builders and Developers Pvt. Ltd. appealed against the order of the Commissioner of Income-Tax (Appeals) - NFAC, Delhi, which itself arose from an assessment order passed by the AO under sections 147 read with sections 144 and 144B of the Income-tax Act, 1961 for the Assessment Year 2013-14. The primary contention was the delay in filing the first appeal, which was initially condoned by the CIT(A) but later rejected in the same order. The assessee explained the delay was due to the sudden death of their tax consultant, who managed their online filing portal. The ITAT found the assessee's reasoning for the delay cogent and sufficient, leading to the condonation of the delay. Additionally, the ITAT noted discrepancies in the AO's initiation of proceedings under section 147 and the subsequent addition of Rs. 1,00,00,000 to the assessee's income, which the assessee denied receiving. Both parties agreed to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470273 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEESTRAIGHTAWAYCARRIEDUSTOTHEIMPUGNEDORDEROF; FORREVENUEFIRSTLYAGREEDTHAT; FORASSESSEEEXPLAINEDSOMEMOREFACTS.HE; FORREVENUEISALSOSATISFIEDWITHTHEREASONINGSOEXPLAINED; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIS.S.DESHPANDE
• Keywords: Condonation of delay
• Section: 147; 144; 43

Judgement Text

"Page 1 of 6 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.631/Ind/2024 Assessment Year:2013-14 Kunal Builders and Developers Private Limited 269-270 Zone-II, M.P. Nagar Bhopal बनाम/ Vs. Assessment Unit ITD Delhi (Assessee/Appellant) (Revenue/Respondent) PAN: AAACK6543R Assessee by Shri S.S. Deshpande, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 12.03.2025 Date of Pronouncement 18.03.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first-appeal dated 25.07.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 23.05.2023 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 147 r.w.s. 144 & 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2013-14, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36). Kunal Builders and Developers Pvt. Ltd. ITA No. 631/Ind/2024 - AY 2013-14 Page 2 of 6 2. Ld. AR for assessee straightaway carried us to the impugned order of first-appeal passed by CIT(A) to show that there was a delay of 193 days in filling first-appeal. But then, Ld. AR submitted, the assessee filed a detailed reply giving explanation as to the reason behind occurrence of delay which the CIT(A) has duly re-produced on Page No. 2-3 of impugned order. Thereafter, the CIT(A) has himself concluded “Considering the reply of the Appellant, the delay in filing of appeal is condoned.” However, subsequently in Para 5-6 / Page 26-31 of impugned order, the CIT(A) has made a contrary conclusion stating “I believe in the present case, cause of substantial justice would not be served by condoning inordinate delay of 193 days for which no cogent reason has been given. Therefore, appeal stand dismissed in limine in view of provision of section 249(3) of Income-tax Act 1961 read with Faceless Appeal Scheme, 2021 Paragraph 5(1)(ii)(a).” Ld. AR submitted that the CIT(A) is apparently wrong in rejecting condonation of delay in later part of impugned order when he has already condoned the delay in earlier part of his order. Not only that, Ld. AR submitted, the assessee’s explanation to CIT(A) regarding cause of delay was cogent which was such that the assessment-order was passed by AO on 23.05.2023 and the work related to online filing portal of assessee-company was being looked after by one Mr. Niraj Tiwari, Tax Consultant, who died all of sudden on 23.06.2023 at the age of 43 years [death certificate was also filed to CIT(A)] and therefore the assessee-company was not aware of the assessment-order having been passed by AO. It is subsequently on 13.12.2023 that the auditors of assessee-company informed the assessee about assessment-order having Kunal Builders and Developers Pvt. Ltd. ITA No. 631/Ind/2024 - AY 2013-14 Page 3 of 6 been passed and immediately thereafter the assessee arranged to file first- appeal to CIT(A) on 02.01.2024 without further delay. Ld. AR submitted that the reasoning given by assessee to CIT(A) is very much correct, cogent and sufficient for condonation of delay. 3. Having explained delay aspect, Ld. AR went ahead to explain the issue involved in present matter. He drew us to assessment-order to show that the AO subjected assessee to the proceeding of section 147 by issuing notice dated 12.07.2022 by alleging that the assessee had received accommodation of Rs. 1,00,00,000/- through an intermediary named M/s NCI Research and Financial Service Ltd. but this allegation made by AO is factually incorrect. To establish this, Ld. AR referred Point No. 3 of assessee’s reply-letter dated 09.11.2021 submitted to AO, placed at Pages 29-31 of Paper-Book, wherein the assessee filed copies of bank statements to AO and categorically denied having received any amount of Rs. 1,00,00,000/-. Thus, Ld. AR submitted that the AO has made out a wrong case of initiating proceeding u/s 147 as well as making addition of Rs. 1,00,00,000/- in assessment-order when there was no receipt of Rs. 1,00,00,000/- by assessee. 4. Replying to above in open court, Ld. DR for revenue firstly agreed that the assessee seems to have explained the reason of delay of 193 days in filing of first-appeal to CIT(A). But so far as the addition of Rs. 1,00,00,000/- made by AO is concerned, Ld. DR submitted that the AO has noted in Para 2 of assessment-order that the assessee has not made compliance to any of the notices issued by him. He submitted that the reply-letter dated Kunal Builders and Developers Pvt. Ltd. ITA No. 631/Ind/2024 - AY 2013-14 Page 4 of 6 09.11.2021 being relied by Ld. AR was not submitted in these proceedings before AO; that letter might have been submitted in different proceeding. 5. In rejoinder, Ld. AR for assessee explained some more facts. He submitted that the AO undertook proceedings u/s 147 against assessee twice through two separate notices. In the course of first proceeding, the assessee filed aforesaid reply-letter dated 09.11.2021 to AO. Thereafter, the AO set up a newer proceeding u/s 147 though an independent notice dated 12.07.2022. Since the assessee had already filed all details/documents to AO vide earlier reply-letter dated 09.11.2021, the assessee did not feel necessity of responding to the notices issued in newer proceeding set up by AO. 6. After above deliberations, Ld. Representatives of both sides reached to a consensus that the delay of 193 days in filing first-appeal before CIT(A) can be condoned and simultaneously this case can be remanded back to the file of AO with a direction to assessee to make representation before AO without seeking unnecessary adjournments. 7. We have considered submissions of both sides and perused the orders of lower authorities. The first issue is the delay in filing of first-appeal before CIT(A). We find that the CIT(A) has, in earlier part of impugned order, condoned the delay but in the later part of very same order, rejected condonation. Be that as it may, the assessee has given a cogent reasoning before CIT(A) qua the delayed filing. In foregoing discussions, we have already narrated the reasoning given by assessee to CIT(A) and as noted by Kunal Builders and Developers Pvt. Ltd. ITA No. 631/Ind/2024 - AY 2013-14 Page 5 of 6 us, the Ld. DR for revenue is also satisfied with the reasoning so explained by assessee. Faced with this situation, we condone the delay occurred on the part of assessee in filing first appeal to CIT(A). 8. Now, coming to the merit of the case made out by AO by way of initiating proceeding u/s 147 and making an addition of Rs. 1,00,00,000/- therein, we find that the assessee has not made compliance to any of the notices issued by AO. Although the assessee filed a reply-letter dated 09.11.2021 to AO denying the transaction of Rs. 1,00,00,000/- but that reply-letter was not filed in present proceedings conducted by AO. Therefore, both sides have consented for remand of this case to the file of AO. We accept the consensus reached by parties and accordingly remand this matter to the file of AO for adjudication afresh. Needless to mention that the AO shall give necessary opportunities to assessee and pass an appropriate order without being influenced by his earlier order. The assessee is also directed to make adequate representation before AO without seeking unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly. 9. Resultantly, this appeal is allowed for statistical purpose. Order pronounced in open court on 18/03/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Kunal Builders and Developers Pvt. Ltd. ITA No. 631/Ind/2024 - AY 2013-14 Page 6 of 6 Indore िदनांक/Dated : 18/03/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "