VISHAL INFRAGLOBAL PVT. LTD.,MEHSANA V. THE DY.CIT, GANDHINAGAR CIRCLE, GANDHINAGAR

ITA 2081/AHD/2024

AI Insights

Vishal Infraglobal Pvt. Ltd. filed two appeals against the orders of the Commissioner of Income Tax (Appeals), which had dismissed their earlier appeals on the grounds of limitation. The first appeal challenged the ex-parte assessment order which had determined the total income at Rs.3,47,21,400, and the second appeal contested the penalty of Rs.56,38,318 imposed under section 270A of the Income Tax Act. The Tribunal found that the assessee had reasonable cause for the delay in filing the appeals and that the issues of quantum and penalty required reconsideration. Consequently, the Tribunal set aside the CIT(A)'s orders and restored the matters to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39163 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. P. SINGH; RIGNESH DAS
• Assessee Lawyers: S.N. DIVATIA
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Reassessment proceedings; Principle of natural justice
• Section: 147; 148; 250

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “सी“, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD सु\u0017ी सुिच\u0019ा का \u001aले, \u0012ा ियक सद एवं \u0017ी मकरंद वसंत महा देवकर, लेखा सद क े सम\"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA Nos.2080/Ahd/2024 & 2081/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : 2018-19 Vishal Infraglobal Pvt.Ltd. Plot No.42, 2nd Floor Apple Avenue B/h. Dharti Flats Gayatri Temple, Highway Mehsana – 384 002 बनाम/ v/s. The DCIT Gandhinagar Circle Gandhinagar \u0014थायी लेखा सं./PAN: AAECV 2187 J अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri S.N. Divatia, AR Revenue by : Shri A.P. Singh, CIT-DR & Shri Rignesh Das, Sr.DR सुनवाई की तारीख/Date of Hearing : 27 /03/2025 घोषणा की तारीख /Date of Pronouncement: 01 /04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: Both these appeals filed by the assessee against separate orders passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”) by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] for the Assessment Year (AY) 2018-19. The first appeal – i.e. ITA No.2080/Ahd/2024 challenges the ex-parte order dated 08.10.2024 passed by the Ld. CIT(A) dismissing the assessee’s appeal against the assessment order dated ITA Nos.2080 & 2081/Ahd/2024 Vishal Infraglobal Pvt.Ltd. vs. DCIT Asst. Year : 2018-19 2 24.03.2023 passed under section 147 r.w.s. 144 of the Act passed by the Assessing Officer [hereinafter referred to as “AO”] The second appeal – i.e. ITA No.2081/Ahd/2024 challenges the order of the CIT(A) dated 08.10.2024 passed under section 250 of the Act upholding the penalty levied under section 270A of the Act by the AO vide his order dated 21.09.2023. Facts of the Case: 2. The assessee is a closely held company engaged in the business of execution of Government contracts. It maintains regular books of accounts. However, the assessee did not file its return of income for the year under consideration. Based on information gathered from the Insight Portal indicating large financial transactions including cash withdrawals and time deposits aggregating to Rs.16.15 crores, notice under section 148 of the Act was issued on 30.03.2022. Since no return was filed in response, the Assessing Officer completed the assessment under section 144 r.w.s. 147 of the Act on 24.03.2023, determining the total income at Rs.3,47,21,400/- and initiated penalty proceedings under section 270A of the Act. 3. The assessee filed appeals against both the assessment and penalty orders before the Ld. CIT(A). However, both appeals were dismissed in limine on the ground of limitation. In the quantum appeal, the delay in filing was 329 days, and in the penalty appeal, the delay was 148 days. The CIT(A) held that no sufficient cause was shown by the assessee for condoning the delay and, hence, did not admit the appeals. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal(s) before s raising following grounds of appeal: ITA Nos.2080 & 2081/Ahd/2024 Vishal Infraglobal Pvt.Ltd. vs. DCIT Asst. Year : 2018-19 3 ITA No. 2080/Ahd/2024 1.1 The order passed u/s.250 on 08.10.2024 for AY 2018-19 by NFAC(CIT(A) Delhi (for short \"CIT(A)\") dismissing the appeal filed by the appellant on the ground of limitation holding that there was no sufficient cause for delay in filing the appeal before NFAC and thereby confirming the aggregate additions of Rs.3,47,21,400/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in dismissing the appeal on the ground of limitation holding that there was no sufficient cause for delay in filing the appeal before NFAC and thereby confirming the aggregate additions of Rs.3,47,21,400/- 1.3 The Ld. CIT(A) has grievously erred in law and or on facts in confirming ex- parte assessment u/s 144 as well as failed to appreciate that there was sufficient cause for alleged non-compliance to the notices of hearing issued so that the assessment is liable to be struck down. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the aggregate additions of Rs.3,47,21,400/- made by AO 2.2 That in the facts and circumstances of the case as well as in law, the Ld. AO has grievously erred in confirming the aggregate additions of Rs.3,47,21,400/- made by AO. 3.1 Without prejudice to above and in the alternative the impugned additions made by AO is highly excessive and calls for substantial reduction and relief on the ground of telescoping additions. 3.2 It is therefore prayed that the delay in filing the appeal before CIT(A) should be condoned and the impugned assessment should be restored back to AO or in the alternative, the aggregate additions of Rs.3,47,21,400/- made by AO should be deleted/reduced. ITA No. 2081/Ahd/2024 1.1 The order passed u/s.250 on 08.10.2024 for AY 2018-19 by NFAC(CIT(A) Delhi (for short \"CIT(A)\") dismissing the appeal filed by the appellant on the ground of limitation holding that there was no sufficient cause for delay in filing the appeal before NFAC and thereby upholding the penalty of Rs.56,38,318/- imposed u/s 270A is wholly illegal, unlawful and against the principles of natural justice. ITA Nos.2080 & 2081/Ahd/2024 Vishal Infraglobal Pvt.Ltd. vs. DCIT Asst. Year : 2018-19 4 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in dismissing the appeal on the ground of limitation holding that there was no sufficient cause for delay in filing the appeal before NFAC. The appellant had claimed the service of the impugned order of penalty on 06.03.2024 in which case there is no delay, but the CIT(A) has treated the date of mail on 22.09.2023 as the date of service. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the penalty of Rs.56,38,318/- imposed u/s 270A in respect of the aggregate additions of Rs.3,47,21,400/- made by AO. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. AO has grievously erred in confirming the penalty of Rs.56,38,318/-imposed u/s 270A in respect of the aggregate additions of Rs.3,47,21,400/- made by AO. 3.1 Without prejudice to above and in the alternative the impugned penalty imposed by AO is highly excessive and calls for substantial reduction and relief on the ground of telescoping additions. It is therefore prayed that the delay in filing the appeal before CIT(A) should be condoned and the impugned penalty of Rs.56,38,318/-should be deleted/reduced. 5. The Ld.Authorized Representative (AR) of the assessee submitted that the statement of facts filed before the Ld. CIT(A) clearly and sufficiently set out the reasons for the delay in filing the appeal, which, despite being genuine and duly explained, were not appreciated by the Ld.CIT(A), resulting in summary dismissal of the appeal on the ground of limitation. The AR further submitted that since the assessment as well as the penalty proceedings were concluded ex-parte, without affording effective opportunity of hearing to the assessee, the matter may be restored to the file of the AO for fresh adjudication in accordance with law. 6. The Ld.Departmental Representative (DR), on instructions, did not raise any serious objection to the proposal for restoring the matter to the file of the AO. ITA Nos.2080 & 2081/Ahd/2024 Vishal Infraglobal Pvt.Ltd. vs. DCIT Asst. Year : 2018-19 5 7. On careful consideration of the material on record, and more particularly, the explanation offered in the Statement of Facts filed before the CIT(A) itself, which sets out the reasons for the delay, we are satisfied that the assessee was prevented by reasonable cause from filing the appeals within the prescribed time. In our view, the reasons advanced for the delay are bona fide and supported by the surrounding facts and circumstances. 7.1. Further, considering the quantum of additions involved (Rs. 3.47 crore) and penalty levied (Rs.56.38 lakh) and having regard to the principle that litigants should not be shut out without a hearing where a plausible explanation exists, we are of the considered view that it would be in the interest of justice to condone the delay in both appeals. Since the penalty under section 270A of the Act is consequential in nature, dependent upon the outcome of the quantum assessment, we are of the view that both the quantum and penalty issues require reconsideration. 7.2. We accordingly condone the delay in filing both appeals and set aside the impugned orders of the CIT(A), in both quantum and penalty matters. The issues are restored to the file of the AO to be adjudicated afresh in accordance with law, after affording adequate opportunity of being heard to the assessee. Needless to add, the Assessing Officer shall re-examine the issue of penalty in light of the final outcome of the reassessment proceedings. 7.3. The assessee is directed to co-operate fully in the set-aside proceedings and furnish all relevant details and explanations as may be called for by the Assessing Officer, without seeking unnecessary adjournments. ITA Nos.2080 & 2081/Ahd/2024 Vishal Infraglobal Pvt.Ltd. vs. DCIT Asst. Year : 2018-19 6 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the Open Court on 1st April, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 01/04/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)-(NFAC), Delhi 5. िवभागीय #ितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 27.3.2025 2. Date on which the typed draft is placed before the Dictating Member. : 27.3.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 1/4/25 7. Date on which the file goes to the Bench Clerk. : 1/4/25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "