STAR DRUGS & RESEARCH LABS PVT. LTD.,HOSUR V. DCIT, CIRCLE-1(1), SALEM

ITA 3177/CHNY/2024

AI Insights

The case involves appeals by M/s. Star Drugs & Research Labs Private Limited against orders from the Commissioner of Income Tax (Appeals) - NFAC, which were dismissed for non-prosecution. The primary issue was the computation of capital gains on slump sales for the assessment year 2013-14. The assessee faced delays in filing appeals due to internal miscommunication and the illness of a director, which the Tribunal found to be genuine reasons for the delay. The Tribunal noted the assessee's non-compliance with previous notices but decided to provide another opportunity for the assessee to present its case, emphasizing the need for justice and fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36435 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: RICHA BAKIWALA; P.HEMASUNDARA RAO; ADVOCATES
• Keywords: Condonation of delay; Capital Gains
• Section: 250

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘बी’ Ûयायपीठ, चेÛन IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी एस.आर.रघुनाथा, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.: 3176 & 3177/CHNY/2024 िनधाᭅरण वषᭅ/Assessment Year: 2013-14 M/s. Star Drugs & Research Labs Private Limited, 2nd floor, 16C/16D/16E/16F, Star Shoping Complex, Old Krishnagiri Road, Hosur-635 109. PAN: AAECS-3826-P Vs. Deputy Commissioner of Income Tax, Circle-1(1) Salem. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Ms.Richa Bakiwala & Mr.P.Hemasundara Rao, Advocates ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Mr.A.Sasikumar,CIT सुनवाई कᳱ तारीख/Date of Hearing : 19.02.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 20.02.2025 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: These appeals at the instance of the assessee are directed against two separate orders of CIT(A) - NFAC both dated 09.01.2024, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2013- 14. - 2 - ITA No.3176 & 3177//CHNY/2024 2. There is a delay of 256 days in filing these appeals. The assessee has filed a petition for condonation of delay along with affidavit of the Director stating therein the reasons for belated filing of these appeals. The reason stated for belated filing of these appeals is that assessee had engaged new tax consultant and there was no proper communication between the present and old consultants and due to lack of co-ordination and oversight, necessary compliance could not be made within the prescribed time limit. It was further submitted in the affidavit that Deponent’s brother, who was also a Director in the assessee company was suffering from severe illness during the course of appellate proceedings, and he unfortunately expired in September, 2024 after prolonged illness. 3. After perusing reasons stated in the affidavit, we are of the view that there is genuine and sufficient reasons shown for belated filing of these appeals and no latches could be attributed to the assessee. Therefore, we condone the delay in filing these appeals and proceed to dispose off the appeals on merits. 4. At the very outset, we notice that both the assessment as well as first appellate orders have been dismissed in limine, for non- prosecuting the cases. The CIT(A) in the impugned orders have - 3 - ITA No.3176 & 3177//CHNY/2024 stated that in spite of several opportunities have been given to the assessee, the assessee failed to furnish submissions / documentary evidences in support of its case. 5. The Ld.AR submitted that assessee’s undertaking was sold as a going concern and issue in question on merits is with regard to computation of capital gains on slump sales. It was stated that the assessee’s business had been completely stopped and there was no staff available, which led to non-compliance of the hearing notices issued from the Office of the AO and the CIT(A). It is therefore, prayed in the interest of justice and equity, the assessee may be provided with one more opportunity to represent its cases before the AO. 6. The Ld.DR, on the other hand, submitted that if the matter is remanded back to the AO, the assessee may be ordered to pay cost, since before the assessment proceedings as well as before the CIT(A), there was non-compliance by the assessee to several notices issued. 7. We have heard the rival submissions and perused material on record. The assessee had not complied with various notices issued from the Office of the AO. Consequently, assessments in the instant cases and order imposing penalty u/s.271(1)(c) of the Act was ex- - 4 - ITA No.3176 & 3177//CHNY/2024 parte, qua, the assessee. Before the First Appellate Authority, the appeal raised was dismissed in limine, for non-prosecuting the case. The assessee’s reasoning for non-appearance before the AO and CIT(A) is that after the slump sale, assessee company was not carry on any business and there was no staff on the rolls of the company, which led to non-compliance to various hearing notices issued from the office of AO and CIT(A). We strongly deprecate the nonchalant attitude of the assessee in not responding to various notices issued from the Office of the AO and CIT(A). However, in the interest of justice and equity, we are of the view that assessee should be provided with one more opportunity to represent its case, subject to the condition that the assessee shall pay cost of Rs.25,000/- (Rupees twenty five thousand only) in each of the appeals, to Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. The amount of Rs.25,000/- for each appeal shall be paid within a month’s time from the date of receipt of this order and assessee shall produce the receipt for the said payment before the AO. The AO, on production of aforesaid payment of cost by the assessee, shall afford reasonable opportunity of hearing to the assessee and shall decide the matter in accordance with law. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The assessee is directed to co-operate with the - 5 - ITA No.3176 & 3177//CHNY/2024 Revenue and shall not seek unnecessary adjournment. It is ordered accordingly. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 20th February, 2025. Sd/- Sd/- (एस.आर. रघुनाथा) (S.R. RAGHUNATHA) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चेÛनई/Chennai, Ǒदनांक/Dated, the 20th February, 2025 DS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Chennai/ Salem 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. "