SHIWALYA SPINNING AND WEAVING MILLS PRIVATE LIMITED,LUDHIANA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, LUDHIANA

ITA 1208/CHANDI/2024

AI Insights

The case involves Shiwalya Spinning and Weaving Mills Private Limited, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2017-18. The primary contention was the disallowance of expenses amounting to Rs. 31,43,015 under the head 'Machinery Repair and Maintenance Spares'. The CIT(A) had dismissed the appeal due to non-prosecution as the assessee failed to respond to multiple notices. The Tribunal, however, decided to remand the case back to the CIT(A) for a decision on merits, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783995 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 14-12-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Condonation of delay; Principle of natural justice
• Section: 143(3)

Judgement Text

" आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘B’, CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 1208/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Shiwalya Spinning and Weaving Mills Private Limited, Sherpur Bye Pass, Ludhiana 141009 बनाम Vs. The Asstt. CIT, Circle-1, Ludhiana èथायी लेखा सं./PAN NO. AALCS6397J अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Physical Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Aditya Kumar, CA राजèव कȧ ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई कȧ तारȣख/Date of Hearing : 13-08-2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 11-11-2025 आदेश/Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the assessee against the order dated 25.01.2024 of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi for A.Y. 2017-18. Printed from counselvise.com 2 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana 2. Grounds of appeal are as under: 1. That order passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi is against law and facts on the file in as much as he was not justified to uphold the disallowances made at Rs. 31,43,015/-out of the total expenses claimed under the head Machinery Repair and Maintenance Spares consumed on adhoc basis. 2. That Learned CIT(A) was further not justified to arbitrarily pass the appellate order ex-parte. 3. The Registry has pointed out a delay of 258 days in filing of the appeal for which an application along with Affidavit for condonation of delay has been filed by the Counsel of the Assessee, which reads as under:- Printed from counselvise.com 3 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana Printed from counselvise.com 4 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana Printed from counselvise.com 5 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana 4. On the issue of condonation of delay, the ld. DR argued that the matter may be decided on merit. 5. We have considered the issue brought on record in the form of an Affidavit by the ld. Counsel for the Assessee and we think it fit to condone the delay. 6. The ld. Counsel for the Assessee argued the case on merits. Per contra, ld. DR relied on the order of the lower authorities. 7. We find that the Ld. CIT(A) has dismissed the appeal for non-prosecution. From the record is seen that last notice u/s 250 was issued by giving last opportunity to the appellant to represent the case by furnishing details, documents, written submissions in support of the grounds of appeal. The text of the last opportunity provided to the Assessee by the Ld. CIT(A) is reproduced as under: \"Notices u/s 250 of the Income Tax Act have been issued on 16.03.2020, 13.01.2021, 07.11.2022, 16.08.2023, 04.09.2023, 17.10.2023, and Printed from counselvise.com 6 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana 02.11.2023, but out above mentioned 07 notices none of them has been complied with. It shows that the appellant is deliberately ignoring the notices as it has nothing to say in support of the present appeal. However, in the interest of natural justice you are being provided last opportunity to represent your case before this appellate authority on the date as mentioned in this notice. Please note that if you fail to respond this notice, it may be presumed that you have nothing to say in support of your appeal and accordingly the appeal may be decided based on material on record.\" 8. The CIT(A) has further mentioned in his order that the appellant has ignored even the last opportunity provided to substantiate the appeal under reference. During the assessment proceedings, the appellant did not respond properly to the notices and questionnaires issued by Id. AO. Ultimately, Id. AO was compelled to pass the order u/s 143(3) of the Income Tax Act, 1961 on the basis of information available on record. It showed that the appellant assessee was not interested in representing its case and it has nothing to say on the merit of the case. Therefore, the appeal of the appellant was dismissed without Printed from counselvise.com 7 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana any discussion on the merits of the case and as such, the appeal of the appellant was not allowed by the Ld. CIT(A). 9. We have considered the assessment order passed by the Assessing Officer and the appellate order passed by the Ld. CIT(A). From the record, it is clear that the Assessee did not comply any notices issued by the ld. CIT(A) and, therefore, the CIT(A) has dismissed the appeal for non- prosecution. Though, the Assessee filed written submissions before the AO but that was also at the fag end of the year. The Assessing Officer had issued many notices as discussed by the Ld. CIT(A) in his order but they were hardly complied with by the Assessee even before the Assessing Officer. In our opinion, the Ld. CIT(A) should have given his findings on merit on the basis of material available on record but that he has not done. Therefore, in the fitness of things and for the purpose of providing natural justice to the Assessee, we are inclined to remand this matter to the file of the CIT(A) for adjudication afresh. Printed from counselvise.com 8 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana 10. Accordingly, the case is remanded back to the file of the Ld. CIT(A) for adjudication afresh on merit, by considering the submissions of the Assessee and the relevant material available on record on affording due and adequate opportunity of hearing to the Assessee in accordance with law, Needless to say, that the CIT(A) shall afford due, reasonable and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the proceedings before the CIT(A). All pleas available under the law shall remain so available to the assessee. 13. In the result, Assessee’s appeal is allowed for Statistical Purposes. Order pronounced on 11.11.2025 Sd/- Sd/- ( RAJPAL YADAV ) ( KRINWANT SAHAY) Vice President Accountant Member “आर.क े.” Printed from counselvise.com 9 1208-c-2024- Shiwalaya Spinning and Weaving Mills Private Limited, Ludhiana आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "