NEERA VIRMANI,INDORE V. CIT (APPEALS), DCIT, PCIT, DELHI

ITA 685/IND/2024

AI Insights

The case involves Neera Virmani, the proprietor of Virmani Enterprises, who appealed against the order of the CIT(A) which sustained the adjustments made by the DCIT regarding non-deduction of TDS on godown rent and freight, among other issues. The primary contention was that the assessee was not given adequate opportunity to present his case, as notices were not properly served. The Tribunal noted the procedural lapses and the lack of a reasoned decision on the merits of the case by the CIT(A), leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668935 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH PORWAL
• Assessee Lawyers: SANKET MEHTA; OFFICE OF LD. A
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; TDS; Non compliance
• Section: 143(3); 271(1)(c); 40(a)(ia)

Judgement Text

" Page 1 of 10 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER ITA. NO.685/Ind/2024 Assessment Year 2015-16 Neera Virmani, Prop. Virmani Enterprises, B-2, Chandra Nagar, A.B. Road, Indore (PAN: ABWPV5663M) बनाम/ Vs. NFAC, Delhi (Assessee/Appellant) (Revenue/Respondent) Assessee by Shri Sanket Mehta, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 23.06.2025 Date of Pronouncement 25.06.2025 आदेश / O R D E R Per Paresh M Joshi, J.M.: This is an appeal filed by the assessee u/s 253 of the Income Tax Act 1961 (hereinafter referred to as the “Act” for sake of brevity) before this Tribunal. The assessee is aggrieved by the order bearing Number: ITBA/NFAC/S/250/2023-24/ 1054378281(1) dated 14.07.2023 passed by the Ld. CIT(A) u/s Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 2 of 10 250 of the Act which is hereinafter referred to as the “impugned order”. The relevant assessment year is 2015-16 and the corresponding previous year period is from 01.04.2014 to 31.03.2015. 2. FACTUAL MATRIX 2.1 That as and by way of an assessment order made u/s 143(3) r.w.s. 263 & 144B of the Act, the assesee’s total income exigible to tax was computed and assessed at Rs.72,13,455/-. There was Addition of Rs.18,56,855/- to the original returned income of Rs.52,56,600/-. That the aforesaid assessment order bears No. ITBA/AST/S/143(3)/2021-22/1042318816(1) dated 31.03.2022 and same is dated 31.03.2022 which is hereinafter referred to as the “impugned assessment order”. 2.2 That the assessee being aggrieved by the “impugned assessment order” prefers first appeal u/s 246A of the Act before Ld. CIT(A) who by the “impugned order” has dismissed the appeal of the assessee on the grounds and reasons stated therein. The core ground being assessee has not pursued the appeal despite several opportunities. Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 3 of 10 2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:- “1. On the facts and circumstances of the case and applicable law Ld. CIT(A) erred in sustaining the adjustment of Rs. 18.56.855 made by Ld. DCIT. PCIT vide their assessment made u/s 143(3) r.w.s. 263 of the Act which is unjust, untenable in law. contrary to the facts and law and bad in law. 2 On the facts and circumstances of the case and applicable law, Ld. CIT(A) erred in sustaining the adjustment of Rs. 18,56,855 made by Ld. DCIT, PCIT on account of Non-Deduction of TDS u/s 40(a)(ia) on Godown Rent and Freight amounting to Rs. 61,89,516. 3. On the facts and circumstances of the case and applicable law Ld. CIT(A) erred in following the principal of \"Audi Alteram Parterm\". It is against the principal of natural justice by not providing opportunity of being heard to the Assessee and passing the Ex-parte order. 4. On the facts and circumstances of the case and applicable law. Ld. CIT(A) erred in sustaining the adjustment of Rs. 4,96,428 made by Ld. DCIT, CPC without considering the fact that the disallowance of expenditure of Rent in lieu of the provision of section 40(a)(ia) was not applicable. 5. On the facts and circumstances of the case and applicable law. L.d. CIT(A) erred in sustaining the adjustment of Rs. 13.60,427 made by Ld DCTT. CPC without considering the fact that the disallowance of expenditure of Freight in lieu of the provision of section 40(a)(ia) was not applicable. 6. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal”. Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 4 of 10 3. Record of Hearing 3.1 The registry has pointed out delay of 359 days in preferring the instant appeal before this Tribunal by the assessee. We notice that “impugned order” is dated 14.07.2023 and that appeal is filed on 29.08.2024. The assessee has placed on record application for condonation of delay dated 29.08.2024 wherein it is stated that the “impugned order” is ex-parte order. All notice(s) issued during the 1st appellate proceedings were received on e- mail id which he does not check on regular and/or daily basis. Even the earlier counsel engaged by him did not bring this fact to his notice. It was this sole reason as a result of which he could not file any response to the 1st appellate proceedings. It is further averred therein that assessee came to know about the 1st appellate order only when he received a show cause notice for penalty u/s 271(1)(c) of the Act dated 14.06.2024 the day when he checked his e-mail id after a long time. When he came to know of the 1st appellate order; the counsel was changed and with the help of new counsel from portal the 1st appellate order was downloaded and thereafter he filed the instant appeal. The whole process took time about filing of the instant appeal. The Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 5 of 10 delay was not deliberate and intentional. It was bonafide. The Ld. AR during hearing repeated and reiterated the contents of this application which is supported by an affidavit dated 29.08.2024. Per contra Ld. DR has left it to this Tribunal’s wisdom to take an appropriate call on delay aspect according to law. After carefully perusing the aforesaid condonation of delay application which is supported by an affidavit on record and after considering the submission of Ld. DR, we are of the considered view that the delay of 359 days is sufficiently explained and we accordingly condone the delay. Appeal is admitted and taken up for hearing. 3.2 The hearing in the matter took place before this Tribunal on 23.06.2025 when the Ld. AR for and on behalf of the assessee appeared before us and interalia brought to our notice that both the orders of the lower authorities i.e. Ld. A.O’s “impugned assessment order” and that of Ld. CIT(A)’s “impugned order” has not determined and computed the real income of the assessee exigible to tax in a meritorious manner and/or on merits. Both the orders of the lower authorities i.e. of the Ld. A.O & of Ld. CIT(A) are ex-parte in nature in a sense that the Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 6 of 10 assessee has remained non compliant as he does not see “Income Tax Portal” on and off and so also his e-mails. In so far as “impugned order” is concerned while it is true that two opportunities were afforded to the assessee by office of Ld. CIT(A) vide notice(s) dated 15.06.2023 & 30.06.2023 for 22.06.2023 & 17.07.2023 respectively but no such notice(s) came to assessee in hard copy at the address provided in Form No.35 column 17 and even if it came on e-mails the same was not seen by him as he does not see his e-mails regularly. It is also sought to be contended that his personal e-mail Id is separate and so also his business e-mail id. Per contra Ld. DR appearing for revenue has contended that it would be just fair and convenient that the matter be relegated back to the file of CIT(A) afresh on denovo basis. 4. Observations,findings & conclusions. 4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us. 4.2 We have carefully perused the records of the case. Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 7 of 10 4.3 We observe on bare simple perusal of “impugned order” that the Ld. CIT(A) has recorded that since the assessee has not pursued the appeal despite opportunities he is deciding the appeal basis material on record. The Ld. CIT(A) has held as follows:- “7. Held:- During the course of appeal proceedings, no reply has been filed by the appellant. I have perused the order of the Assessing Officer and considered the facts of the case. The appellant has not pursued the appeal despite being granted several opportunities as elaborated above No details, documents or submission have been provided by the appellant substantiating its grounds of appeal. The mere facts mentioned in Form No. 35 cannot be considered in the absence of any supporting documentary evidence and submissions. The AO has passed a reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. All the grounds of appeal are therefore dismissed”. We are of the considered opinion that no hard copy of hearing notice(s) (supra) ever came to assessee. Further notice(s) were served on e-mail id [e-mail] which was not seen by the assessee on daily basis. Further in column No.17 of Form 35 which deals with address to which notices may be sent to the appellant speaks of address B-2, Chandra Nagar, Indore GPO, Indore, MP-452001 on which no notice(s) in hard copy was served. The non compliance on part of assessee for want of proper notice at the postal address provided by the Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 8 of 10 assessee in column 17 too appears to be a bonafide and genuine one. We therefore hold that the “impugned order” is passed in violation of the principles of natural justice in as much as no proper notice ever was served on the assessee on the postal address provided by him in Form No.35. Further in so far service on e-mail Id is concerned the assessee did not see his e-mails regularly on day to day basis. We notice that only two opportunities were provided to assessee and time interval between two notices (supra) are short. We therefore set aside the “impugned order” and remand the case back to CIT(A) to pass a fresh order which should be a speaking and reasoned one dealing with merits of the case. Needless to state that by virtue of Section 250(6) of the Act it is incumbent upon the Ld. CIT(A) to pass a reasoned order on merits. The Ld. CIT(A) in the “impugned order” has not passed the order on merits and has simply upheld the “impugned assessment order” under challenge before him for sake of upholding the same owing to non prosecution of appeal by the assessee which is not a correct position in law. We therefore set aside the “impugned order” as and by way of remand on denovo basis. Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 9 of 10 5. Order 5.1 In the premises drawn up by us we set aside the “impugned order” as and by way of remand with a direction to CIT(A) to pass a reasoned order on merits after giving full and complete opportunities to the assessee. Further we direct assessee to cooperate with department and not to seek adjournment on flimsy grounds. Assessee is simultaneously directed to be vigilant in seeing his e-mail id regularly preferably on daily basis so that such lapses does not happen again and again. Assessee to provide his e-mail id to revenue too for service. 5.2 Appeal of the assessee is allowed for statistical purpose. Order pronounced in open court on 25.06.2025. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक / Dated : 25/06/2025 Dev/Sr. PS Neera Virmani ITA. No.685/Ind/2024 – A.Y. 2015-16 Page 10 of 10 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "