SUDAMA FRAGRANCES,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI

ITA 2057/DEL/2025

AI Insights

The case involves Sudama Fragrances, which appealed against the order of the Commissioner of Income-tax (Appeals) regarding the disallowance of a deduction claimed under section 80IC(2)(a)(ii) of the Income Tax Act, 1961. The assessee filed their return on 24.10.2018, which was initially accepted, but later the deduction was disallowed in the tax computation sheet. The assessee filed a rectification application and simultaneously appealed to the CIT(A). The CIT(A) dismissed the appeal without considering the pending rectification application, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669594 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARPAT SINGH
• Assessee Lawyers: ROHIT JAIN
• Keywords: Set aside
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2057/Del/2025 Assessment Year: 2018-19 Sudama Fragrances, 6/3, East Patel Nagar, New Delhi – 110 008. PAN: ABNFS1639K Vs DCIT, Circle 49(1), Delhi (Appellant) (Respondent) Assessee by : Shri Rohit Jain Shri Tejaswi Jain & Ms Aditi Sharma, Advocates Revenue by : Shri Narpat Singh, Sr. DR Date of Hearing : 25.06.2025 Date of Pronouncement : 25.06.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 08.11.2023 of the Ld. Commissioner of Income-tax (Appeals), NFAC. 2. At the outset, the ld. AR has submitted that there was a delay of 423 days in filing the appeal. It was submitted that the delay was due to the fact that the assessee was contesting by way of a rectification application which led to a chain of events leading to the delay in filing the appeal. On hearing the ld. AR at length, we are satisfied that due to availing alternative remedy there is ITA No.2057/Del/2025 2 sufficient reason explaining the cause for the delay. The same is condoned and the appeal is admitted for hearing. 3. On hearing both the sides, we find that the assessee’s return was filed on 24.10.2018 claiming deduction u/s 80IC(2)(a)(ii) of the Income Tax Act 1961 and the return of income was processed u/s 143(1) of the Act accepting the returned income by order dated 25.08.2019. On 28.09.2019, notice u/s 143(2) of the Act was issued and on 31.01.2021 assessment order u/s 143(3) of the Act was issued accepting the returned income. The ld. AR has submitted that the system generated tax computation sheet showed the deduction as claimed was disallowed for which rectification application was filed on 16.02.2021. At the same time, the assessee preferred an appeal before the CIT(A) on 20.02.2021. Notice was issued in the said appeal by NFAC on 20.09.2021. In the mean time, on 11.01.2023 the refund was adjusted against the alleged demand. On 25.10.2023 NFAC issued notice for compliance and the assessee had sought adjournment on the basis that rectification application is pending, but, on 08.11.2023 the impugned order was passed dismissing the regular appeal filed by the assessee. Further, the assessee continued to seek the relief under rectification application by alternate remedies and on 17.01.2025 the rectification application was dismissed on the ground that the assessee’s regular appeal had been dismissed by the CIT(A). Thus assessee has approached the Tribunal against the impugned order dismissing the regular appeal. ITA No.2057/Del/2025 3 4. After going through the impugned order of the Ld. CIT(A) and the facts as brought before us, we are of the considered view that the claim of the assessee required to be ascertained afresh by the AO himself. In the impugned order the NFAC has although issued notices, but, has failed to take into cognizance of the fact that the rectification application was pending and, for that reason, the assessee was seeking adjournment. However, declining the adjournment, the impugned order has been passed by which even the merits of the facts as asserted have not been taken into consideration. 5. Thus, we are inclined to set aside the order of the ld.CIT(A) and impugned assessment order itself. The issues are restored to the files of the ld.AO to give adequate opportunity of hearing to the assessee and proceed to adjudicate on the impugned disallowance afresh. The appeal is allowed, for statizstical purposes only. Order pronounced in the open court on 25.06.2025. Sd/- Sd/- (MANISH AGARWAL) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25th June, 2025. dk ITA No.2057/Del/2025 4 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "