ZUARI INDUSTRIES LIMITED (FORMERLY KNOWN AS ZUARI GLOBAL LTD),ZUARINAGAR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI

ITA 71/PAN/2025

AI Insights

The case involves Zuari Industries Limited appealing against the order of the National Faceless Assessment Centre (NFAC), Delhi, which sustained a disallowance under Section 14A of the Income Tax Act and did not condone the delay in filing the appeal. The assessee had initially filed a return disclosing a certain income, which was later adjusted by the Assessing Officer (AO) after scrutiny, leading to a higher assessed income. The CIT(A) dismissed the appeal in limine due to a three-day delay, which the assessee attributed to the COVID-19 pandemic, claiming the period should be excluded for limitation purposes. The ITAT found merit in the assessee's arguments, particularly considering the exceptional circumstances of the pandemic, and decided to condone the delay and remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633312 (ITAT-PANAJI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CAPTAIN PRADEEP ARYA
• Assessee Lawyers: ANKIT GOYAL
• Keywords: Condonation of delay; Set aside; Reasonable cause; Corroborative evidences; Period of limitation; Principle of natural justice; Time period of passing order
• Section: 143(3); 14A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI G D PADMAHSHALI ACCOUNTANT MEMBER I T A. Nos.71/PAN/2025 (A.Y. 2018-19 ) Zuari Industries Limited, Jai kisaan Bhawan, Zuarinagar, Mormugo, Goa-403728. Vs National Faceless Assessment Centre, Delhi. PAN/GIR No. AAACZ0306P (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Assessee by Shri.Ankit Goyal.AR Revenue by Shri.Captain Pradeep Arya.DR सुनवाई कȧ तारȣख/Date of Hearing 10.06.2025 घोषणा कȧ तारȣख/Date of Pronouncement 11.06.2025 ORDER PER PAVAN KUMAR GADALE JM: The appeal is filed by the assesse against the order of National Faceless Appeal Centre (NFAC) Delhi /CIT(A) passed u/sec 143(3) and u/sec 250 of the Act. The assesse has raised the grounds of appeal challenging the order of the CIT(A) sustaining the disallowance u/sec14Aof the Act and not condoning the delay in filling the appeal. 2. The brief facts of the case are that, the assesse company is engaged in the business. The assesse has filed the return of income for A.Y.2018-19 on 29.11.2018 disclosing 2 ITA. No.71/PAN/2025 Zuari Industries Limited. a total income of Rs.5,86,00,220/- and the return of income was processed u/sec143(1) of the Act determining the total income of Rs.6,14,20,880/-.Subsequently the case was selected for complete scrutiny under CASS and the notice u/sec143(2) and u/sec142(1) of the Act along with questionnaire are issued. In compliance, the assesse has submitted the information and details through ITBA. The Assessing Officer (AO) on perusal of Audited financial statements and information find that the assesse has received the dividend income on shares of Rs.12,91,44,807/- and claimed exempted u/sec10(34) of the Act. Whereas the A.O. found that the assessee has made disallowance u/sec 14A of the Act of Rs.5,96,444/- and a show cause notice was issued and the assessee has filed the submissions on 23.02.2021 referred at para2.1 of the order. The A.O was not satisfied with the explanations and dealt on the provisions of section14A of the Act, Rule8D(2) of the IT Rules and computed disallowance u/sec14A r.w.r8D(2)(iii) of IT rules after setoff of disallowance of Rs.5,96,444/- which worked out to Rs. Rs.13,03,33,536/-and assessed the total income of Rs.19,17,54,420/- and passed the order u/sec 143(3) of the Act dated 26.04.2021. 3. Aggrieved by the order, the assesse has filed an appeal before the CIT(A) and there was a delay of 3 days in filling the appeal. Whereas the CIT(A) has not condoned the delay and dismissed the assessee appeal in limine. Aggrieved by 3 ITA. No.71/PAN/2025 Zuari Industries Limited. the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the CIT(A) has not considered the facts that the assessee has received the A.O order u/sec143(3) the Act dated 26.04.2021 and has filed the appeal before appellate authorities on 28.05.2021. The Ld.AR also submitted that in the Covid 2019 period, the period from15.03.2020 till 28.02.2022 shall be excluded for the purposes of limitation and hence delay of 3 day in filling the appeal is not a wanton Act. The Ld.AR emphasized that the assessee has good case on merits with supporting evidences which goes to roots of the case and play a vital role in the decision making and prayed for condonation of delay and opportunity before the lower authorities and the Ld.AR substantiated the submissions with the factual paper book. Contra, the Ld.DR relied on the CIT(A) order. 5. We heard the rival submissions and perused the material on record. Prima-facie, the CIT(A) has passed the order considering the fact that there is no proper compliance and the delay in filling the appeal was not explained with the reasonable cause. Whereas the assessee has raised grounds of appeal challenging the disallowance u/sec14A of the Act by the A.O and the Ld.AR demonstrated the intimation of admitting the appeal dated 29-06-2021 placed at page 5 of the paper book and subsequently the assessee has filed reply to notice/sec250 4 ITA. No.71/PAN/2025 Zuari Industries Limited. of the Act placed at page 6 to 65 and similarly the assesse also submitted the details on various dates placed in the paper book. We Considering the facts,provisions, find that the submissions of the Ld.AR are realistic and the limitation period is applicable in Covid2019 pandemic and the reasonable cause is explained. We find that no benefit is derived in causing delay in filing appeal before the CIT(A) and also the assessee is supported with sufficient cause and pragmatic approach should be considered for condonation of delay and accordingly the delay is condoned. Further we considering the principles of natural justice, shall provide with one more opportunity of hearing to the assessee to substantiate the case along with the evidences. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal and We allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 11.06.2025. Sd/- Sd/- (GD PADMAHSHALI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji Dated: 11/06/2025 5 ITA. No.71/PAN/2025 Zuari Industries Limited. Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji Date Initial 1. Draft dictated on PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member PS 4. Draft discussed/approved by Second Member. PS 5. Approved Draft comes to the Sr.PS/PS PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "