SHREE SHAGUN FINANCIAL SERVICE ,MUMBAI V. DCIT CIRCLE 19(3), MUMBAI

ITA 6975/MUM/2024

AI Insights

The case involves Shree Shagun Financial Services, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2014-15. The primary contention was the addition of Rs. 71,48,49,999 as unexplained cash credits under Section 68 of the Income-tax Act, 1961, due to high-value transactions in the assessee's bank account, which were not explained. The CIT(A) had dismissed the initial appeal due to a significant delay in filing, attributed to internal disputes and regulatory issues faced by the assessee. The Tribunal found the reasons for the delay sufficient and remanded the case back to the CIT(A) for a decision on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126346 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITHA KAUSHIK
• Keywords: Set aside; Reasonable cause; Unexplained cash credit; Principle of natural justice; Grounds of appeal; Dismissed; National Faceless Appeal; Partners; AMP; Statistical purposes; Transactions; No income; Delay in filing of appeal; Limine; In Limine; Explanation; Services
• Section: 147; 148; 250; 68

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.6975/MUM/2024 (निर्धारण वर्ा / Assessment Year :2014-15) Shree Shagun Financial Services 196/A Tara House, 1st Floor, Flat No. 16 Cavel Cross Lane, Mumbai Kalbadevi 40002 v/s. बिधम DCIT Circle -19(3), Mumbai National Faceless Asst. Centre, E-Ramp, Jawaharlal Nehru Stadium New Delhi 110023 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: ABTFS0352F Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी निर्ााररती की ओर से /Assessee by: None रधजस्व की ओर से /Revenue by: Ms. Kavitha Kaushik (SR DR) सुिवधई की िधरीख / Date of Hearing 09.04.2025 घोर्णध की िधरीख/Date of Pronouncement 21 .04.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 10/04/2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2014-15. 2. The assessee has raised the following grounds of appeal: “1. On the fact and circumstances of the case, the opening of the case itself is against the Law. as there is no Income Escaped above Rs 5000000.00 P a g e | 2 ITA No. 6975/MUM/2024 A.Y. 2014-15. Shree Shagun Financial Services The case cannot be opened beyond 4 years after the expiry of the relevant Assessment Year. 2. On the fact and circumstances of the case, The order passed by Learned AO is based on surmises and bad in law and against the principles of Natural Justice. Based on the facts and circumstances of the case and further as per the explanation provided, the learned AO grossly erred in adding Rs. 71484999.00. 3. On the Facts and in the circumstances of the case Ld. Assessing Officer has erred in making the addition of Rs 71484999.00 which was received from its partners as unexplained cash credits U/s 68. Hence the order Ld officer has completely erred in adding the amount in the hand of the Firm. 4. The learned AO ought to have appreciated the fact that before adding a huge amount shall call for information from banks too and put some onus on bank statements where its clearly visible that funds were received from the Partners. 5. The order passed by the learned office is against the natural principle. 6. The appellant craves leave to add, amend or modify any or all the above-referred rounds of appeal before or at any time of the hearing.” 3. Brief facts of the case are that the assessee had not filed its return of income for the year under consideration. Based on information regarding high- value transactions of funds in the bank account of the assessee, a notice u/s 148 was issued by the Ld. AO. As the assessee could not explain the nature and source of the impugned transactions, Ld. AO treated the entire amount of Rs. 7,14,84,999/- as unexplained cash credits u/s. 68 of the Act vide order u/s 147 r.w.s 144B of the Act dated 10/04/2023. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Since, the appeal was delayed by almost one year and Ld. CIT(A) was not satisfied with the reasons given by the assessee, he dismissed the appeal in limine vide order dated 06/08/2024. P a g e | 3 ITA No. 6975/MUM/2024 A.Y. 2014-15. Shree Shagun Financial Services Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal. 4. At the outset, it is seen that the appeal is delayed as the same has been filed on 31/12/2024 i.e. beyond the prescribed time limit of 60 days from the date of impugned order i.e. 06/08/2004. The assessee has submitted that it had incurred huge losses during the relevant period and SEBI had also conducted enquiries against it. Due to dispute among the partners, they had to go for arbitration and the issue has been settled only recently. Under these circumstances, there has been a delay in filing of appeal before the Tribunal as well as before the CIT(A). 5. In view of the explanation given by the assessee we hold that there was a reasonable cause for delay in filing of the appeal before us and the same is hereby condoned. 6. Before us, the Ld. AR has reiterated that since there was an ongoing dispute between the partners and a ban was imposed by SEBI on its activities hence, proper representation could not be made before the lower authorities. He has, therefore, requested that the matter may be remanded back for fresh consideration. Ld. DR has not opposed the said proposition of the Ld. AR. P a g e | 4 ITA No. 6975/MUM/2024 A.Y. 2014-15. Shree Shagun Financial Services 6. After careful consideration of the facts and circumstances, we are of the view that there was a reasonable cause for the delay in filing of appeal before the Ld. CIT(A) as well and therefore he should have considered the same and decided the appeal on merits instead of dismissing it in limine. We therefore, set aside the order of Ld.CIT(A). He is directed to pass a fresh order on merits after giving due opportunity to the assessee. 7. The appeal is accordingly allowed for statistical purposes. Order pronounced in the open court on 21.04.2025. Sd/- Sd/- BEENA PILLAI RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 21.04.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, P a g e | 5 ITA No. 6975/MUM/2024 A.Y. 2014-15. Shree Shagun Financial Services सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. "