SHIVA TRADING,DELHI V. ITO,WARD-36(4), DELHI

ITA 4291/DEL/2024

AI Insights

Shiva Trading appealed against the order of the NFAC, which had confirmed an addition of Rs.2,00,89,766 to the assessee's income on account of bank deposits for the Assessment Year 2017-18. The appeal was initially delayed due to internal disputes among the partners of Shiva Trading, which affected the firm's ability to respond to tax notices and participate in the assessment proceedings. The ITAT found that the NFAC had passed the order without adequate opportunity for the assessee to be heard, violating principles of natural justice. Additionally, the CIT(A) had dismissed the appeal without considering additional evidence submitted under Rule 46A of the Income Tax Rules.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315574 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: PARITOSH JAIN
• Keywords: Condonation of delay; Opportunity of being heard; Additional evidence; Principle of natural justice
• Section: 139

Judgement Text

"1 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 4291/Del/2024 (A.Y. 2017-18) Shiva Trading Flat No. 652, 2nd Floor, Creative Heights, Sector- 29, Rohini, New Delhi PAN: ACQFS1603K Vs. ITO Ward-36(4) New Delhi Appellant Respondent Assessee by Advocate Paritosh Jain Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 08/05/2025 Date of Pronouncement 14/05/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (Ld. CIT(A) for short) dated 29/01/2024 for the Assessment Year 2017-18. 2. The grounds of appeal are as under:- “1. On the facts and circumstances of the case, order passed by National Faceless Appeal Centre (NFAC) is bad both in the eye of law and on facts. 2.(i) On the facts and circumstances of the case, NFAC has erred, both of facts and in law, in passing the order without giving assessee an appropriate and adequate opportunity of being heard in violation of the principle of natural justice. (ii) That the reason for non appearance before the NFAC was beyond the control of the assessee. 2 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO 3. On the facts and circumstances of the case, NFAC has erred both on facts and in law in passing the order without admitting the additional evidences furnished by the assessee under Rule 46A of the Income Tax Rules. 4. On the facts and circumstances of the case, NFAC has erred, both of facts and in law, in confirming the addition of an amount of Rs.2,00,89,766/-, made by the Assessing Officer on account of bank deposits. 5. The applicant craves leave to add, amend or alter any of the grounds of appeal.” 3. There is a delay of 173 days in filing the present Appeal. The Assessee filed an application for condonation of delay contending that the order impugned has been passed filed by the NFAC without giving opportunity of being heard to the Assessee and the Assessee came to know regarding passing of the order impugned only in the month of July, whenthe new Accountant logged-in the Portal for filing the Income Tax Return of the Assessee. Immediately, after coming to know regarding passing of the order the Assessee filed the present Appeal, therefore, submitted that the delay in filling the Appeal was not intended. Thus, sought for condoning the delay in filing the present Appeal. In support of the application for condonation of delay, an affidavit sworn by RamakantaRaut who is the partner of the Assesseealso filed. 4. Heard both the parties and perused the affidavit filed in support of the application for condonation of delay. For the reason stated in the application for condonation of delay and the affidavit filed by the 3 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO partner of the Assessee, we are of the opinion that there was sufficient cause for the Assessee to file the present appeal belatedly, accordingly, the delay of 173 days in filing the present appeal is hereby condoned. 5. The Ld. Counsel for the Assessee submitted that the order impugned has been passed by the NFAC without giving opportunity of being heard to the Assessee and the order impugned has been passed in violation of principals of natural justice. The Ld. Counsel further submitted that the NFAC has also not considered the additional evidences furnished by the Assessee under Rule 46A of the Income Tax Rules, thereby erroneously dismissed the Appeal. Thus, the Assessee's Representative sought for allowing the Appeal. 6. We have heard both the parties and perused the material available on record. As could be seen from the record, both the assessment order as well as order of the Ld. CIT(A) were passed ex- parte. There was a delay of 1000 days on filing the appeal before the Ld. CIT(A). It was the case of the Assessee that the books of accounts of the Assessee firm were duly tax audited u/s 44AB of the Act, however, upon conclusion of the assessment year, a dispute arose between the partners, as a result of which one partner Ms. SonakshiGargwhose residential premises were shown as principal 4 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO place of business of firm and who was not at speaking terms with other partner Sh. RamakantaRaut. Though the books of account of the Assessee firm were tax audited, due to the hostile situation between the partners, though there was no profit in the Firm rather there was a loss, ITR for the year under consideration could not be furnished by the Assessee within the time prescribed u/s 139 of the Act. Further, all the notices issued by the A.O.claimed to be not be served on appellant Firm and appellant was not aware of either assessment proceedings and passing of the assessment order. It can be seen from the order of the Ld. CIT(A), since the Assessee has not participated in the assessment proceedings, the Assessee filed an application under Rule 46A of Income tax Rules by producing additional evidence. However, the Ld. CIT(A) has not admitted the additional evidence and dismissed the appeal on the ground that the Assessee has not furnished any cash book and observing on ‘gross negligence’ on behalf of the Assessee, before the A.O. dismissed the said application. In our considered view, considering the fact that there was a dispute between the partners which ultimately resulted in passing the ex-parte assessment order and also there was delay in filing the appeal before the Ld. CIT(A) for the reasons mentioned above, the Ld. CIT(A) should have condoned the delay of 1000 days and decided the appeal on merits after admitting the additional evidence produced by the Assessee. Thus, the delay of 1000 days 5 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO infiling the appeal before the Ld. CIT(A) is hereby condoned and the Ld. CIT(A) is directed to admit the additional evidence and decide the issue involved in the appeal on its merits after providing an opportunity of being heard to the Assessee. 7. In the result, the Appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 14th May , 2025 Sd/- Sd/- (M. BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 14.05.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 6 ITA No. 4291/Del/2024 Shiva Trading Vs. ITO "