NETINK TECHNOLOGIES PRIVATE LIMITED,BHOPAL V. DCIT/ACIT 3(1), BHOPAL

ITA 155/IND/2025

AI Insights

The case involves Netink Technologies Private Limited, which appealed against the order of the Ld. CIT(A) dismissing their first appeal due to a significant delay in filing. The original assessment added Rs. 26,99,00,000 to the assessee's income as unexplained cash credits under Section 68 of the Income Tax Act, 1961, which the assessee contested. The Tribunal noted procedural lapses in the handling of notices and the impact of the COVID-19 pandemic on the assessee's ability to respond timely. The Tribunal found merit in the assessee's arguments regarding the procedural irregularities and the impact of the pandemic, leading to the decision to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775525 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 04-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH PORWAL
• Assessee Lawyers: GAGAN TIWARI
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Unexplained cash credit; Principle of natural justice
• Section: 144; 68

Judgement Text

" Page 1 of 9 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, 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.155/Ind/2025 (Assessment Year : 2018-19) Netink Technologies Private Limited, Plot No.6, Behind Congress Bhawan, Shivaji Nagar, Bhopal (PAN:AAECN4127C) बनाम/ Vs. DCIT/ACIT 3(1), Bhopal (Assessee/Appellant) (Revenue/Respondent) Assessee by Shri Gagan Tiwari, AR Revenue by Shri Ashish Porwal, DR Date of Hearing 02.09.2025 Date of Pronouncement 11.09.2025 आदेश / O R D E R Per Paresh M Joshi, J.M: This is an appeal filed by the assessee Under Section 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/250/2024- 25/1070957892(1) dated 06.12.2024 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2018-19 Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 2 of 9 and the corresponding previous year period is from 01.04.2017 to 31.03.2018. 2. FACTUAL MATRIX 2.1 That as and by way of an assessment order the total income of the assessee exigible to tax was computed and assessed at Rs.27,05,70,250/-. The income shown as per the Return of Income was at Rs.6,70,250/-. That during the relevant Assessment Year 2018-19, corresponding to the Financial Year 2017-18 and THE earlier Financial Year 2016-17, the issued, subscribed and fully paid up share capital of the assessee company was only Rs.1,00,000/-. However it was observed from the records that the assessee company during the relevant year has issued, subscribed and fully paid up share capital amounting to Rs.27,00,00,000/-. In brief in the Assessment Year 2017-18 the share capital amount was of Rs.1,00,000/- whereas in the relevant Assessment Year it jumped to Rs.27,00,00,000/-. The assessee company is engaged in the religious organisations under code-19006. That during the course of assessment proceedings no effective reply came from the assessee company despite opportunities given including a Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 3 of 9 show cause notice which was served on 21.04.2021 and proposing addition of Rs.26,99,00,000/-. The total income was computed by making the addition of Rs.26,99,00,000/-. The assessed income was at Rs.27,05,70,250/-. That the aforesaid assessment was made u/s 144 r.w.s. 144B of the Act. It bears No.ITBA/AST/S/ 144/ 2021-22/1032754236(1) and that the same is dated 03.05.2021, which is hereinafter referred to as the “impugned assessment order”. 2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on the grounds and reasons stated therein. The core ground and reason for the dismissal of the 1st appeal was as under:- “5.1.5 In the instant case, there is a delay of 577 Days. The appellant has requested to accept the appeal and allow them to submit details and document to justify that demand raised by the A.O. is not correct. However, no application for condonation of delay has been submitted by the appellant. During the appellate proceedings, vide 2 notices u/s 250 of the Act dated 04.10.2024 & 23.10.2024, the appellant was specifically asked to furnish the reasons for such abnormal delay in filing the appeal along with supporting document/evidence in support of the reasons of such delay. However, the appellant has failed to provide any reason for such delay in filing the appeal. Further, it is noted that even during the assessment proceedings, the appellant had not responded to the various notices issued by the AO. It shows laxity, on the part of the appellant, which was the Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 4 of 9 reason for delay in filing appeal. It appears that the appellant had nothing to say regarding such abnormal delay in filing of appeal or even had any sufficient reasons for such delay. Under the given facts & circumstances, such delay of 577 days without any evidence in support could not be condoned. 5.1.6 Further, the language used in section 249(3) is sufficient cause\" and not \"reasonable cause\". 'Sufficient cause' is much more stringent that the term 'reasonable cause' and even if a cause is reasonable, it has to be ascertained whether it was a sufficient cause or not. 5.2 On the basis of the circumstances of the case, it is held that the appellant did not have \"sufficient cause\" for delay in filing appeal. The appeal filed by the appellant is held to be invalid and non-maintainable being out of time. For statistical purposes, the appeal is treated as DISMISSED in limine. 6. In the result, the appellant's appeal is DISMISSED”. 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 the Form No.36 against the “impugned order” which are as under:- “1. That on the facts and in the circumstances of the case the order 1 of the learned lower authorities are vitiated on several grounds hence the same may kindly be quashed. 2. That the order of the learned lower authorities passed are unlawful and illegal. 3. That the various findings of the learned lower authorities are opposed to the facts hence the same may kindly be quashed. 4. That the learned National Faceless Appeal Center, Delhi 4 (NFAC) erred and was not justified in not allowing proper and meaningful opportunity of being heard. 5. That on the facts and circumstances of the case the learned assessing officer erred and not justified in making an addition and the learned National Faceless Appeal Center, Delhi (NFAC), Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 5 of 9 in confirming the addition of Rs. 26,99,00,000/- on account of unexplained cash credits U/s 68 of The Act with the applicability of the provision of section 115BBE of The Act, without even going into the merits of the case. 6. That the above grounds are independent to each other.” 3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 02.09.2025 when the Ld. AR for and on behalf of the assessee appeared before us and stated that the orders of the lower authorities below i.e. of the Ld. A.O as well as of the Ld. CIT(A) are not meritorious in nature. It was also sought to be contended that both the orders of the lower authorities are in the breach of the principles of natural justice. Before the Ld. A.O no reasonable opportunity was afforded to the assessee and before the Ld. CIT(A) the first appeal was dismissed on grounds of delay (supra). The Ld. AR then contended that the addition in the “impugned assessment order” has been made on account of “share capital addition”. It was also pleaded that the “impugned assessment order” pertains to Covid-19 period. The assessment proceedings commenced at the beginning of the first phase of Covid-19 and came to be concluded by the second phase of Covid-19. It was urged that though notice u/s 143(2) of Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 6 of 9 the Act is dated 28.09.2019 but the notice of hearing was given last on 27.07.2020 when Covid-19 was at its peak. In brief the Ld. AR has stated that Covid-19 contributed to the ex-parte nature of the “impugned assessment order”. With regard to the “impugned order” the Ld. AR contended that while the notice(s) during the assessment proceedings were served on CA, however only the “impugned assessment order” was served on the assessee company. The CA e-mail id was srsassociates@gmail .com. In the Form No.35 before Ld. CIT(A) the e-mail id of the assessee company was [e-mail] and that correct postal address of company was also given in Column No.17 of the Form No.35. It was also stated that the Ld. CIT(A) had sent notice(s) u/s 250 of the Act at e-mail id [e-mail] page 25 of the paper book filed. This person Ajay Neema once had worked for the assessee company as an Accountant and that presently the assessee company has no links with him. Shri Ajay Nema was engaged for the limited purpose only for filing etc. The Ld. AR pleaded that the delay before the Ld. CIT(A) be condoned basis interlocutory application made before this Tribunal dated 01.09.2025, paper book pages 2 to 5. On merits of the Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 7 of 9 case the Ld. AR contended that the consideration for share capital which was increased had not flown into assessee company in cash form. In fact shares came to be allotted against the land purchased. Per contra Ld. DR appearing for the revenue contended that nothing with regard to the delay was filed by the assessee company before the Ld. CIT(A). The issue of delay was in fact before the Ld. CIT(A) in first appeal itself. The Ld. DR stated that on both the issues of delay and merit it would be better that the matter be relegated back to the file of the Ld. CIT(A) 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 as presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the “impugned order” basis law and by following the due process. 4.3 We basis records of the case and after hearing and upon examining the rival contentions canvassed before us by both the Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 8 of 9 parties are of the considered view that both the “impugned assessment Order” and so also the “impugned order” are not meritorious in nature. The assessee company has not filed any condonation of delay application before the Ld. CIT(A) [Section 249(3) of the Act]. The assessee company now desires this Tribunal to condone the delay which had occurred before the Ld. CIT(A) as and by way of an interlocutory application basis paper book 1 to 5 filed before this Tribunal. In the given set of facts presented before this Tribunal keeping in mind that there should be correct determination of total income exigible to tax basis merits of the case by following the due process of law, we deem it fit that the “impugned order” should be set aside and matter be remanded back to the file of Ld. CIT(A) who should first consider the delay aspect before him and if the Ld. CIT(A) is satisfied that the delay so occurred in first appeal is condonable then he should pass an appropriate order first on the delay aspect and thereafter if he deems it fit and proper that the delay is indeed condonable one then he is at full and complete liberty to decide the case on merits. We further direct the assessee company to file a condonation of delay application if any if they Printed from counselvise.com Netink Technologies Private Limited ITA No.155/Ind/2025 - A.Y. 2018-19 Page 9 of 9 so desire before the Ld. CIT(A) for appropriate orders on delay in filing the first appeal. 4.4 In the premises set out herein above the “impugned order” is set aside as and by way of remand back to the file of Ld. CIT(A) with directions as aforesaid. 5. Order 5.1 In the result the “impugned order” is set aside as and by way of remand back to the file of the Ld. CIT(A) on denovo basis with the directions as aforesaid. 5.2 Appeal of the assessed is allowed for statistical purpose. Order pronounced in open court on 11.09.2025. Sd/- Sd/- (B.M. BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक / Dated : 11.09.2025 Dev/Sr. PS 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 Printed from counselvise.com "