ITAT sets aside CIT(A) Order, Rules Genuine Delay Explanation Must Be Considered for High-Value Tax Disputes [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench “C”, has set aside the orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, which had dismissed appeals filed by Vishal Infraglobal Pvt. Ltd. on grounds of delay. The Tribunal held that where plausible and bona fide explanations for delay are provided, such appeals ought to be heard, especially when significant tax additions and penalties are involved.

Vishal Infraglobal Pvt. Ltd., a company engaged in executing government contracts, had not filed its return of income for Assessment Year 2018–19. Based on third-party financial data indicating transactions of over Rs.16.15 crore, the Assessing Officer reopened the assessment under Section 147 and completed it ex-parte under Section 144, determining a total income of Rs.3.47 crore. The AO also initiated penalty proceedings under Section 270A and subsequently levied a penalty of Rs.56.38 lakh.

The assessee appealed both the assessment and penalty orders. However, the CIT(A) rejected both appeals citing delay—329 days in the quantum appeal and 148 days in the penalty appeal—holding that no sufficient cause had been shown for condonation. The appeals were thus dismissed in limeline without considering the merits.

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Before the Tribunal, the assessee, represented by S.N. Divatia, submitted that the reasons for the delay were clearly explained in the statements of facts filed before the CIT(A), but were not appreciated. It was further argued that the ex-parte nature of the original assessment and penalty orders denied the assessee a fair opportunity and warranted a fresh adjudication. The Departmental Representatives, A.P. Singh and Rignesh Das, did not raise any serious objection to remanding the matter.

The Tribunal, after examining the record and considering the explanation offered, found the reasons for delay to be genuine and supported by surrounding circumstances. The Bench observed that given the quantum of addition and penalty involved, and the assessee’s bona fide attempt to explain the delay, it would be unjust to deny a hearing on technical grounds.

Accordingly, the Bench condoned the delay in both appeals and set aside the CIT(A)’s orders. The matters have been restored to the file of the Assessing Officer for fresh adjudication in accordance with law, with directions to provide the assessee an adequate opportunity to be heard and to reassess the penalty based on the outcome of the reassessment.

The order was pronounced by the Bench comprising Suchitra Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member).

To Read the full text of the Order CLICK HERE

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