WEST INDIA HOSPITALITY LTD.,AHMEDABAD V. THE DCIT, CENT. CIRCLE-2(3), AHMEDABAD

ITA 1682/AHD/2024

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West India Hospitality Ltd. filed an appeal against the order of the National Faceless Appeal Centre (NFAC), which had dismissed their earlier appeal as delayed. The original assessment by the AO disallowed interest payments on loans used for investment in shares, resulting in a revised loss figure for the assessee. The CIT(A) dismissed the appeal on technical grounds of delay, despite the assessee's request for adjournment and the Supreme Court's exclusion of the COVID-19 period from limitation calculations. The Tribunal found the CIT(A)'s dismissal unsustainable and restored the case for a decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24992 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: Cognizance for Extension of Limitation (2022) 441 ITR 722 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: K.C. THAKER
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1682/Ahd/2024 (Ǔनधा[रण वष[ / Assessment Year : 2018-19) West India Hospitality Ltd. 115/116, Plot No.71, Near Sola Over-bridge, Thaltej, Ahmedabad, Gujarat - 380054 बनाम/ Vs. DCIT Central Circle - 2(3), Ahmedabad èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AADCG5702F (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri K. C. Thaker, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri B. P. Srivastava, Sr. DR Date of Hearing 31/12/2024 Date of Pronouncement 06/01/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 26.07.2024 for the Assessment Year 2018-19. 2. The brief facts of the case are that the return of income was filed by the assessee showing loss of Rs.2,67,04,742/-. The case was selected for complete scrutiny under e-assessment scheme. In the course of assessment, the AO disallowed interest payment of Rs.44,94,436/- in respect of loans utilized for investment in shares and the assessment was completed under Section 143(3) ITA No. 1682/Ahd/2024 [West India Hospitality Ltd. vs. DCIT] A.Y. 2018-19 - 2 – of the Income Tax Act, 1961 (in short ‘the Act’) on 31.03.2021 at loss of Rs.2,22,10,306/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in second appeal before us. The following grounds have been taken by the assessee in this appeal: “1. The learned CIT-(A), NFAC, DELHI, has erred in law and on facts in holding the appeal filed as delayed and inadmissible, disregarding the directions of the Hon'ble Supreme Court in order dt.10-01-2022, and in dismissing the appeal on that ground. 2. The Id. CIT (A) has further erred in dismissing the appeal on 26-07-2024 even after noticing the fact that adjournment application was filed on 16- 07- 2024 requesting for time up to 31-07-2024, and without informing the appellant that the request for adjournment was not granted. 3. On the facts and in the circumstances of the case and in law the learned CIT (A) ought not to have treated the appeal as delayed and inadmissible, ought not to have dismissed it as such and ought to have decided the appeal on merits. 4. It is therefore prayed that the order of the CIT (A) - may be quashed and set aside and the appeal may be restored for adjudication on merits, and costs of appeal may be determined/awarded.” 5. Shri K. C. Thaker, the Ld. AR appearing for the assessee submitted that the Ld. CIT(A) had dismissed the appeal by holding that there was delay of more than 8 months in filing of the appeal, which was not condoned by him. He further submitted that in the course of appeal proceeding, the assessee had sought adjournment on the last date of hearing on 16.07.2024, but the appeal of the assessee was dismissed on this technical ground ITA No. 1682/Ahd/2024 [West India Hospitality Ltd. vs. DCIT] A.Y. 2018-19 - 3 – without considering the adjournment application and also without allowing any opportunity of being heard to the assessee. The Ld. AR further submitted that the order of the AO was received during Covid pandemic period and Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, reported in (2022) 441 ITR 722 (SC) had excluded the time period from 15.03.2020 to 28.02.2022 of the Covid-19 pandemic for all limitation purpose. Considering this binding direction of Hon’ble Supreme Court, there was no delay in filing of the present appeal before the Ld. CIT(A). Therefore, the Ld. CIT(A) should not have dismissed the appeal on mere technical without considering the merits of the case. The Ld. AR, therefore, requested that the matter may be set aside to the file of the Ld. CIT(A) for deciding the matter afresh on merits of the case. 6. Per contra, Shri B. P. Srivastava, Ld. Sr. DR had no objection if the matter was set aside to the file of the Ld. CIT(A). 7. We have considered the facts of the case and the submission of Ld. AR. Assessment order in this case was passed on 31.03.2021, which was during Covid pandemic period. The appeal before the Ld. CIT(A) was filed by the assessee on 17.12.2021. Hon’ble Apex Court in the decision of Cognizance for Extension of Limitation (supra) had directed the exclusion of time period from 15.03.2020 to 28.02.2022 of the Covid-19 pandemic for all limitation purpose. In view of this fact, the order of the Ld. CIT(A) in refusing to condone the impugned delay in filing of appeal, is not found sustainable in the eyes of law. The assessee’s present appeal is, therefore, restored back to ITA No. 1682/Ahd/2024 [West India Hospitality Ltd. vs. DCIT] A.Y. 2018-19 - 4 – the Ld. CIT(A)/NFAC for afresh appropriate adjudication. The assessee should be allowed a proper opportunity of being heard by the Ld. CIT(A). 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced on 06/01/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 06/01/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "